IBM sues former CIO

Big Blue files lawsuit to stop former executive from working at cloud computing rival AWS

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IBM sues former CIO IBM believes a non-compete agreement should prevent Smith's employment with any rival until May 2018.
By  Manda Banda Published  August 8, 2017

IBM has filed a lawsuit trying to stop its former CIO from starting a new job with Amazon Web Services (AWS).

In a complaint filed last week in a New York federal court, Big Blue argues that Jeff Smith knows highly sensitive information about the next-generation of cloud computing technologies that IBM is currently developing, and will share them with AWS if allowed to work for the cloud rival.

IBM believes a non-compete agreement should prevent Smith's employment with any rival until May. The case was first reported by Westfair Online, a New York business news publication.

Smith "resigned to compete against IBM" and had knowledge of "IBM's most closely guarded product development plans," the lawsuit stated.

Those plans allegedly involve new cloud offerings Big Blue intends to launch in the next year. They "will combine new hardware and software to provide Cloud Computing services to large enterprises that are faster, more secure and less expensive than before," the document stated.

Such technological innovations will enable IBM to reduce prices on cloud infrastructure, pressuring AWS, perceived as a cost leader, IBM claimed in seeking to enjoin Smith's employment.

"Smith possesses a wide range of highly confidential information on upcoming technological advances in IBM's cloud design that would be extremely valuable to IBM competitors such as AWS," an IBM spokesperson said.

Smith began working at IBM as chief information officer in 2014, having held a similar position for an Australian bank.

As a member of a selective leadership group responsible for transforming the company, he attended strategy sessions concerning all of IBM's businesses.

He was privy to inside information on product costs, design specifications, performance capabilities and release plans for IBM's next generation of technology in the intensively competitive cloud computing arena.

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