IBM Acquires Emptoris Supply Chain Procurement Cloud Service

IBM on Dec. 15 added another new element to its enterprise cloud service menu when it acquired supply chain procurement software provider Emptoris. Terms of the deal were not released.

Emptoris, based in Burlington, Mass., automates the increasingly complex buying, bidding and accounting process for enterprise procurement teams and does it with a global perspective. This includes variances in languages, currency and other cultural factors.

IBM has been on a buying binge lately in the cloud-service sector. Earlier this month, the IT giant annexed San Mateo, Calif.-based DemandTec, which helps retailers set optimal pricing for their products, and Ireland-based Curam Software, which enables welfare and unemployment agencies to manage the programs they administer.

Big Blue is augmenting its cloud services options in order to expand its Smarter Cities initiative to increase efficiencies in local and state government IT systems.

Twelve-year-old Emptoris has about 350 customers globally from industries that include retail, financial services and health care. It employs about 725 people globally.

‘Complex’ May Be Understatement

The term “complex” is probably an understatement when it comes to the administration of high-end enterprise procurement procedures.

“Companies might run as many as 10,000 to 20,000 auction or purchasing events, in which they put in all their RFQs [requests for quotes] and RFIs [requests for information] out onto the Web,” President and CEO Patrick Quirk told eWEEK. “They have their suppliers around the world answer those RFPs [requests for proposals] and provide pricing information.

“These can be very complicated; sometimes they may have 10,000 line items-including legal, contract, business terms, you name it. We supply optimizers to help determine the best suppliers to buy from, how to spread your risk, how to buy from multiple countries, then award those bids and track them digitally in contracts.”

Emptoris is a way to buy globally but act locally when procuring items, Quirk said. “For most companies, that’s 50 percent of their cost, for their supply base,” Quirk said. “So managing that supply base is extremely important.”

IBM said the acquisition is expected to close in Q1 2012.