IBM Closes Sterling Commerce, Storwize Acquisitions

IBM has announced the closing of two acquisitions: Sterling Commerce and Storwize.

On Aug. 27, IBM announced the closing of its $1.4 billion acquisition of Sterling Commerce from AT&T. The addition of Sterling Commerce expands IBM's ability to help clients accelerate their interactions with customers, partners and suppliers through dynamic business networks using either on-premise or cloud delivery models.

According to an IBM spokesman, IBM is placing a big bet on the marketing industry. The acquisitions of Sterling Commerce, Coremetrics and Unica -- which is expected to close later this year -- represent a new market opportunity for IBM. These acquisitions gain IBM entry into the marketing industry to address the roles and needs of marketing professionals.

Sterling Commerce provides software for cross-channel commerce and integration of customer, partner and supplier networks across a wide range of industries.  The combination of IBM and Sterling Commerce enables the integration of key business processes across channels and among trading partners – from marketing and selling to order management and fulfillment.

"We now offer a complete platform for multienterprise business transactions," said Craig Hayman, general manager of 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.”

Moreover, with the acquisition of Sterling Commerce, IBM advances its ability to help clients integrate and automate business processes, resulting in improved demand generation, customer experience and fulfillment. Using the combined technologies of IBM and Sterling Commerce, clients have the flexibility to manage these processes – and their networks of business partners – through public or private cloud computing environments.

Since IBM announced its intent to acquire the company in May, Sterling Commerce has seen continued momentum with customers in both its business integration and commerce solutions businesses. Sterling Commerce recently announced that Hostess Brands has implemented its B2B integration solutions both on-premise and as a service to improve Hostess’ supply chain performance. In June, Cengage Learning went live with the latest version of Sterling Multi-Channel Selling to take advantage of new market segmentation and enhanced promotions functionality that enhance the customer experience of its award-winning website, CengageBrain.com.

“We view the IBM acquisition of Sterling Commerce as a positive move,” saidCharles Qian, manager of eCommerce systems at Cengage Learning, a global provider of teaching, learning and research solutions, in a statement. “Our recent implementation was seamless, and completed under a tight timeframe. I expect the excellent solutions we have received from Sterling Commerce will only be enhanced under IBM.”

In addition to enhancing IBM’s integration and commerce offerings, Sterling
Commerce software also complements IBM's industry-focused software including the company’s frameworks supporting the retail, manufacturing, communications, health care and banking industries.

More than 18,000 global customers rely on Sterling Commerce’s offerings, including large companies such as Boston Market, Honeywell, Monsanto and Pitney Bowes. Outside the United States, Sterling Commerce’s customer list includes leading manufacturers such as Toshiba and top retailers such as Auchan and John Lewis.

And according to the consulting firm McKinsey & Company, the number of marketing touch points has increased from three traditional methods such as print and television ads to more than 10, including store fronts, telemarketing, affinity partners, e-commerce, m-commerce to name a few.

According to Gartner, the worldwide market for business integration commerce software and services will be a $5.2 billion market opportunity by 2015 and is expect to grow double digits each year.

The role of marketing departments has evolved in most organizations from a back-office tactical communications role to an organization-wide strategic discipline.

Today's close of IBM's acquisition of Sterling Commerce compliments the
WebSphere Commerce product portfolio enabling marketers to harness the power of supplier and partner networks, and automate selling and order fulfillment across multiple channels for companies to guide their corporate strategies, customer engagements and contribute to the financial bottom line.

IBM officials said the company plans to spend $20 billion on acquisitions over the next five years. IBM projects that the software business will represent almost half of its profits by 2015. Meanwhile, on Aug. 30, IBM announced the close of its acquisition of Storwize. Storwize will become part of IBM Systems and Software Group. The Storwize technology helps organizations improve storage efficiency while lowering the cost of making primary data available for analytics and other applications.

Integrating Storwize's Random Access Compression Engine (RACE) with the IBM storage solutions portfolio will help IBM to make it more affordable for clients to analyze massive amounts of data to provide new insights and business outcomes. The RACE technology complements other storage efficiency offerings such as deduplication, IBM said. 

"IBM is focused on helping clients reduce the cost and complexity of managing the vast amounts of data that are consistently growing year over year," said Brian Truskowski, general manager of IBM System Storage and Networking, in a statement. "Using the RACE technology can help IBM clients compress their primary data while preventing storage sprawl and lowering power and cooling costs."