IBM to Beef Up B-to-B Networks with Sterling Commerce Acquisition

IBM and AT&T announced they have entered into a definitive agreement for IBM to acquire Sterling Commerce from AT&T for approximately $1.4 billion in cash. The acquisition of the Dublin, OH-based company will expand IBM's ability to help organizations create more intelligent and dynamic 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.

Today, more than 18,000 global customers use Sterling Commerce offerings, and the company enables more than one billion business interactions a year for clients in the financial services, retail, manufacturing, communications and distribution industries. Sterling Commerce's 2,500 employees will be integrated into the WebSphere organization within IBM's Software Group. "The addition of sterling to IBM will substantially advance our ability to help clients to create more agile business networks," Craig Hayman, general manager for IBM WebSphere Software, said at a briefing announcing the acquisition plans. "What it means is improve the way that they connect and communicate with their customers, with their partners, and with their suppliers. This is a rapidly growing area that's very attractive to companies because of the efficiencies and the productivity gains and the cost savings that they can achieve from automating and improving their relationships with their trading partners."

IBM says that through this acquisition, clients will be able to extend the capabilities of their existing systems using, for example, IBM's rules management, analytics and business process management software. The company has committed up to $20 billion over the next several years to acquire technology that increases business agility. "You may recall our iLOG acquisition, leader in rules management and supply chain optimization," Hayman explained. "We'll be even able to bring this together for even a better outcome for our customers. We also saw that we acquired Cognos for analytics. And you see that providing the analytics across the entire supply chain, and optimizing your supply chain networks and your trading partner networks using analytics capability behind it will be a substantial add for our customers."

Earlier in May, IBM acquired Cast Iron Systems, which enables faster integration of cloud environments to enterprise environments, Hayman continues. There was also "the acquisition of Lombardi to allow the line of business to describe a business process. And you can see how end to end, were now able to bring these capabilities to the sterling problem domain. These aggressive moves are the core of our 'smarter planet' strategy. To transform and improve virtually every aspect of business and society, from electrical grids, to transportation, telecommunications to the retail shopping experience."

IBM's products and services complement the business-to-business 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 give clients the flexibility to manage their networks of business partners through public or private cloud computing environments. "We'll now be able to offer clients the flexibility of managing their business partner networks either on premises, under a traditional enterprise model, or through a cloud computing delivery model," says Hayman. "We will plug the Sterling Commerce capabilities into these industries to be a part of our industry frameworks."

IBM and AT&T expect the transaction to close in the second half of 2010, subject to regulatory approvals and the satisfaction of other customary closing conditions.

For information about Sterling Commerce, go here. For information on IBM, go here.