IBM Sues Former CIO For Joining AWS

Well, well, well, what have we here! It is being reported that IBM has filed a lawsuit in a bid to stop a former executive from starting a new job with AWS.

Big Blue filed the complaint last week in a New York federal court.

According to the company, Jeff Smith is in knowledge of highly sensitive information about the next generation of cloud technologies that IBM is working on, and will share these trade secrets with Amazon Web Services, if allowed to work for the cloud rival.

These plans allegedly involve new cloud offerings that IBM — currently the fourth biggest name in public cloud — intends to launch next year.

As the claim states:

“Were he permitted to join the senior management of AWS on Aug. 7, would inevitably be involved in decision-making about how best to compete against IBM and would inevitably disclose or use IBM trade secrets.”

Smith had worked at IBM since 2014, and was among the top 65 executives at the technology titan when he left his job in May as chief information officer for transformation and operations. It has now been revealed that he departed to take up a vice president position at AWS.

Where he will be managing strategy and operations, and will be reporting into CEO Andy Jassy.

The lawsuit basically accuses him of violating a one-year noncompete agreement, demanding that he repay $1.7 million in stock bonuses.

“If not enjoined to wait a year before competing against IBM – as he expressly agreed he would – Smith will take with him to AWS all the highly confidential information he knows about the technological innovations IBM is developing specifically in the cloud computing business where AWS competes directly against IBM.”

These include details like internal costs, design specifications, performance capabilities, and release plans on the new cloud platform, which IBM believes, would be very valuable to AWS.

IBM has asked the court to ban Smith from working for Amazon Web Services until May 2, 2018, and a hearing is scheduled for August 21.

AWS is not new to all this, of course. The cloud giant recently won a restraining order to prevent a former executive from joining Smartsheet, only to drop the lawsuit a week later.