updated 03:00 am EDT, Fri October 31, 2008
Apple hires IBM chip exec
An ex-IBM chip design expert is expected join Apple next month, but is facing a lawsuit from his former employer that could block his employment with the Cupertino-based company. According to the complaint, former IBM executive Mark Papermaster will join in Apple as a senior executive in what could be an attempt to make new inroads into the server market and/or bolster the company's Xserve line up. Papermaster, expected to work closely with Apple CEO Steve Jobs, is being sued by IBM to block his employment at Apple and prevent him from divulging trade secrets related to IBM's Power chips and server products.
For the last two years, the "blade server guru" been part of what the company calls IBM's elite I&VT (Integration and Values Team), which includes the 300 senior managers of the company. Blade servers not only allow companies to more densely pack processing power into a single computer, but also energy and space as well as offer flexibility in investments. In addition, Papermaster has authored several papers on chip development at IBM and has worked as Vice President of IBM's Blade Development Unit, which focuses on building highly efficient servers based on technologies other than Power. The complaint specifically calls out Papermaster's (confidential) knowledge of blade servers and related manufacturing, research, and innovation.
In addition, the complaint describes the exec as a "top expert in Power architecture and technology" and says that Papermaster is "one of IBM's top executives who is possession of significant and highly-confidential IBM trade secrets and know-how, as well as sensitive information regarding business strategy and long-term opportunities." IBM's Power architecture includes a series of microprocessors that are used as the main CPU in many of IBM's servers, minicomputers, workstations, and supercomputers.
While Apple reportedly refused to comment on the lawsuit or confirm the employment offer, IBM issued a statement saying that Papermaster's employment by Apple is "a violation of his agreement with IBM against working for a competitor should he leave IBM. We will vigorously pursue this case in court."
IBM believes that Papermaster's employment violates a 7-page non-compete he signed in which he agreed not to be employed by a competitor for at least 12 months. The complaint alleges that both Apple and IBM are competitors in enterprise server, consumer PC, and microprocessor markets and that Apple's recent acquisition of PA Semi, creates new competition between the companies. Apple CEO Steve Jobs said that its PA Semi acquisition was focused on the engineering talent pool and that the company would use those technologies to further differentiate its handheld devices (including the iPhone and iPod) -- a point also underscored in the complaint. (Papermaster's expertise could be used to bolster PA Semi's current initiative: a specialized ARM-based iPhone chip.)
The complaint further notes that IBM's own PowerPC chips, which were used in Macs until the Intel/x86 transition few years ago, are used in video game consoles and alleges that PA Semi manufactures chips that could be used in the same markets.