Subscribe to our free, weekly email newsletter!

IBM’s acquisition of Sterling Commerce is a done deal

By Jeff Berman, Group News Editor
August 30, 2010

The May announcement regarding IBM’s $1.4 billion acquisition of AT&T subsidiary Sterling Commerce, a provider of business-to-business integration and cross-channel solutions, has been made official, according to company officials.

With more than 18,000 customers and established more than 30 years ago, Sterling is engaged in more than 1 billion business interactions per year for clients in various industries, including retail, manufacturing, and distribution, among others.

Its software and related services focus on B2B integration, order management, logistics, and cross-channel selling and fulfillment services to help businesses connect, communicate and collaborate with their clients, partners, and suppliers to increase revenues, reduce costs, and streamline the way organizations do business, according to IBM.

IBM officials said that the combination of IBM and Sterling Commerce enables the integration of key business processes across channels and trading partners—from marketing and selling to order management and fulfillment. And they added that this deal will help customers integrate and automate business processes, which will provide improved demand generation, customer experience and fulfillment. Another benefit is that shippers will be able to manage these processes—and business partner networks—through public or private could computing environments, said IBM.

“We now offer a complete platform for multi-enterprise business transactions,” said Craig Hayman, general manager, IBM Industry Solutions, in a statement.  “In combination with IBM’s existing offerings, Sterling Commerce, Coremetrics and Unica are expanding IBM’s ability to help companies automate, manage and accelerate core business processes across marketing, selling, order management and fulfillment.”

In a letter to customers in May about the acquisition, Heyman noted that both clients and business partners will have access to extensive B2B integration and multi-channel selling, order management, and logistics capabilities, and IBM’s SOA and business process management solutions. This combination, he said, will enable the integration of key business processes through the entire commerce lifecycle and give clients the flexibility to manage their network of business partners through public or private cloud computing environments, which will translate into more efficient supply chains and superior customer service.

Sterling spokesman Joe Horine told LM that this deal stands to benefit both companies in several ways.

“IBM has an integration product line that complements ours well,” said Horine. “Our products will appear as part of their Websphere and e-commerce side, and we believe our order management suite will complement their products on that side. “There are a lot of synergies between the two product sets that we believe will be beneficial for our existing customers and new customers.”

While Sterling currently processes more than 1 billion business interactions per year, IBM maintains this amount will only grow due to the proliferation of electronic business transactions, including manufacturers sourcing raw materials electronically and retailers automating stock management and managing orders online, among others.

IBM added that Sterling strongly complements IBM’s middleware portfolio, and by acquiring Sterling and its large trading network, IBM is poised to deliver new cross-channel services to its clients. And Sterling’s technology, said IBM, will complement IBM’s software by adding its capabilities to IBM’s frameworks supporting several industries, including manufacturing and retail.

ARC Advisory Group analyst Adrian Gonzalez commented in his Logistics Viewpoint blog that IBM views this deal as a way of growing its Websphere business, which focuses on on-demand business, business integration, application, and transaction infrastructure.

“A subplot of this acquisition is IBM’s further expansion into supply chain software,” wrote Gonzalez. “IBM acquired ILOG back in 2008, a provider of supply chain network design and inventory and transportation optimization solutions. Now it will add Sterling Commerce’s portfolio of warehouse management, transportation management, and distributed order management solutions. This will put IBM in direct competition with key partners like SAP, Oracle, and some best-of-breed vendors. It will be interesting to see how IBM walks this tightrope, and how its current partners respond.”

About the Author

Jeff Berman headshot
Jeff Berman
Group News Editor

Jeff Berman is Group News Editor for Logistics Management, Modern Materials Handling, and Supply Chain Management Review. Jeff works and lives in Cape Elizabeth, Maine, where he covers all aspects of the supply chain, logistics, freight transportation, and materials handling sectors on a daily basis. .(JavaScript must be enabled to view this email address).

Subscribe to Logistics Management magazine

Subscribe today. It's FREE!
Get timely insider information that you can use to better manage your
entire logistics operation.
Start your FREE subscription today!

Recent Entries

Slowing global trade and a bloated orderbook of large vessel capacity mean that container shipping is set for another three years of overcapacity and financial pain, according to the latest Container Forecaster report published by global shipping consultancy Drewry.

The NRF is calling for 2015 holiday sales to see a 3.7 percent annual gain to $630.5 billion, which comfortably outpaces the ten-year average of 2.5 percent.

On the heels of announcing it plans to acquire freight transportation and logistics services provider Con-way Inc. for $3 billion, XPO Logistics may be considering selling off Con-way Truckload, the company’s truckload arm.

The International Air Cargo Association (TIACA) has called on world leaders meeting at the United Nations this week to work together to find solutions to the ongoing migrant crisis in Europe

More than 20 U.S. port authority officials and their key staff, representing seaports from all four U.S. coasts, will gather on October 8 to meet with Congressional leadership to discuss the upcoming surface transportation bill and the U.S. Army Corps of Engineers’ navigation budget.


Post a comment
Commenting is not available in this channel entry.

© Copyright 2015 Peerless Media LLC, a division of EH Publishing, Inc • 111 Speen Street, Ste 200, Framingham, MA 01701 USA