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By Cara Garretson
IBM said Monday that it plans to acquire e-commerce software and services provider Sterling Commerce from AT&T for about $1.4 billion in cash.
Sterling Commerce, an AT&T company based in Dublin, Ohio, describes itself as a software and services provider that focuses on helping its customers connect with clients, partners, and suppliers with business-to-business integration, order management, logistics, and cross-channel selling offerings. Sterling's products are available for on-premise deployment or in a software-as-a- model. The company was founded 30 years ago and has 18,000 clients worldwide.
IBM says it want to combine its service-oriented architecture (SOA) offerings with Sterling's products to improve customers' supply chains and partner networks and create seamless integration that extends beyond the enterprise to other entities.
Once the acquisition closes, IBM plans to integrate Sterling's offerings into IBM Software Group's AIM (Application Integration Middleware) division, according to a Q&A posted on the Sterling Web site. However, until the deal is finalized, the two companies will continue to operate as separate entities.
"Businesses today are operating in a highly competitive global environment in which lines between actions taking place within and outside an organization's four walls are blurring," said Craig Hayman, general manager of IBM's WebSphere. "This acquisition will give IBM new tools to help clients build dynamic business networks that connect partners, suppliers and clients and deliver a consistent customer experience across channels. In addition, the fact that much of this can be done in the cloud will make it compelling to large numbers of our customers."
In 2004, IBM divested its EDI VAN (Electronic Data Interchange Value-Added Network) services in a sale to Francisco Partners, which then was the major shareholder in Global eXchange Services. IBM says that since that divestment its clients' needs have changed, and because the company has made changes to its SOA and business-process management offerings, EDI VAN now fits better into the company's portfolio. IBM added that these services are just one reason it is acquiring Sterling, as it plans to also leverage the company's business-to-business integration and cross-channel offerings.
IBM promises to protect existing customer investments in both its own and Sterling's products and services. More detailed product and support plans for Sterling's products will be developed once the acquisition closes, says IBM. At that time, existing Sterling business partners will be able to leverage IBM's portfolio of offerings.
The acquisition is subject to regulatory clearance and other conditions, and is expected to close sometime in the second half of this year, at which point 2,500 Sterling Commerce employees will transfer to IBM's WebSphere group, according to IBM.
For its part, AT&T said that Sterling's offerings are a good match for IBM's products and services, perhaps better than for its own.
"Our focus is on developing and providing a world-class portfolio of networking-based solutions and services, including network- and cloud-based data storage and managed hosting, application and computing services," said Ray Wilkins, CEO of AT&T's diversified businesses unit. "And AT&T remains committed to its strategic alliance with IBM, our largest customer, to provide a unified set of telecommunications and computing services to multinational corporations across the globe."
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