IBM - traditionally known as ‘Big Blue’ - has sued a former employee for joining cloud rival Amazon Web Services (AWS). IBM is traditionally recognized as a software and hardware provider and has over recent years transitioned to a major cloud arena player. The company’s acquisition of Softlayer in 2012 enhanced its cloud capability, which includes ‘Big Data’ options. IBM suggests Jeff S. Smith, a former CIO of its cloud computing operation, has violated a “non-compete agreement” he was employed under.
IBM’s lawsuit suggests Mr. Smith breached the non-compete agreement by joining AWS (a competitor) without waiting a calendar year as stipulated in his contract. He is also accused of ‘misappropriation of trade secrets’. In the position of CIO since 2014, Mr. Smith previously worked at an Australian bank where, IBM suggests, he was exposed to information that could damage its cloud activity if a competitor had access to it.
Mr. Smith initially gave his notice to IBM in March of this year, telling the company of his intention to work for Amazon. While he did move his resignation to May, he ultimately told IBM he would begin working at AWS in August. Mr. Smith was ordered not to take his new position until legal proceedings have been completed. A court will consider whether he must wait until May 2, 2018 to take up his new position. The court will also consider if he has to return shares to the value of $1,714,800 received prior to resigning his position.
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