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May 25, 2010

Late yesterday, IBM has announced that it will acquire middleware developer and application vendor Sterling Commerce for about $1.4 billion in cash.

Sterling Commerce is currently owned by AT&T.

The acquisition is designed to enhance IBM's ability to help enterprises create more intelligent and robust business networks by simplifying and automating the way they connect and communicate with customers, partners and suppliers both on-premise or through cloud computing delivery models.

AT&T says that about 18,200 customers use Sterling Commerce offerings on a worldwide basis. The company enables more than 1 billion business interactions a year for clients in the financial services, retail, manufacturing, communications and distribution industries.

IBM's products and IT services complement the B2B capabilities of Sterling Commerce and together enable the integration of key business processes through the entire cross-channel solution lifecycle -- from marketing and selling to order management and fulfillment.

These offerings also offer business clients the flexibility to manage their networks of business partners through public or private cloud computing environments.

According to Big Blue, the combined technologies and expertise of IBM and Sterling Commerce will make business and partner networks smarter and more efficient by enabling integration beyond the enterprise. The company believes that through this acquisition, clients will be able to extend the capabilities of their existing IT systems using, for example, IBM's rules management, analytics and business process management software.

And this can simply enable these organizations to respond faster to sudden business challenges as they happen.

Ray Wilkins, AT&T Diversified Businesses' CEO says "Sterling Commerce is a solid business that complements IBM's suite of products and services. 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."

He added "AT&T remains fully committed to its strategic alliance with IBM to provide a unified set of telecommunications and computing services to multinational corporations across the globe."

Consistent with its software strategy, IBM plans to continue to support Sterling Commerce clients and enhance its technology while still allowing these organizations to take full advantage of the broader IBM software portfolio.

Following the completion of this acquisition, about 2,500 Sterling Commerce employees will be integrated into the WebSphere organization within IBM's Software Group.

Sterling Commerce offerings strongly complement IBM's middleware portfolio. By acquiring Sterling Commerce technology and its large trading partner network, IBM anticipates it will be able to deliver powerful and new cross-channel solutions to its enterprise clients.

Additionally, Sterling Commerce technology will complement IBM's industry-focused software offerings, enabling the addition of capabilities to IBM's frameworks supporting the retail, manufacturing, communications, health care and banking industries.

"The global reach and additional capabilities IBM offers makes this acquisition great news for our customers and partners," said Bob Irwin, chief executive officer, Sterling Commerce. "The combination of IBM's products, services and skills with the Sterling Commerce B2B integration and cross-channel capabilities resulting from this acquisition is unparalleled."

IBM and AT&T expect the acquisition to close in mid-October, subject to the usual regulatory approvals and the satisfaction of other customary closing conditions.

Source: IBM.

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