IBM buys Sterling Commerce from AT&T for $1.4B

The deal will give Big Blue even more data-integration middleware

IBM is buying AT&T subsidiary Sterling Commerce, maker of business-to-business data integration software, for about US $1.4 billion in cash, the companies announced Monday.

The pending acquisition will bolster IBM's already burgeoning portfolio of data management software. Sterling Commerce's capabilities, combined with IBM's own middleware and analytics products, will help companies respond more nimbly to sudden business challenges," IBM said.

Sterling Commerce's platform helps companies exchange documents and other information, as well as tie together business processes. The company competes with the likes of GXS, Inovis and Axway.

IBM is buying market share as well as technology. Sterling Commerce counts about 18,000 customers in the financial services, retail, manufacturing and other industries, according to a statement.

The deal is expected to close in the second half of this year.

Roughly 2,500 Sterling Commerce employees will join IBM's WebSphere division after the deal's close, according to a statement.

The acquisition is IBM's 57th since 2003, and follows its recent move to purchase application integration vendor Cast Iron Systems.

The Sterling deal was "not a very well-kept secret" in industry circles, with rumors floating around for quite some time, according to Forrester Research analyst Ken Vollmer.

Sterling Commerce is "a solid number two" after GXS in the B2B service provider space, Vollmer said. There could be additional acquisition activity in the market during the next couple of months, he added.

IBM chose Sterling based on business results and customer satisfaction levels relative to rivals in the market, said Craig Hayman , general manager of WebSphere, during a conference call Monday. "The difference was not trivial."

Sterling is itself the product of some consolidation, having purchased supply chain application vendor Yantra in 2005 and Nistevo, maker of transportation management software, in 2006.

With the pending deal, IBM is making a fresh run at the B2B service space, having sold off related businessesto GXS in 2004.

Big Blue's move to buy Sterling Commerce reflects the fact that vendors need dedicated B2B capabilities when trying to serve large customers, Vollmer said.

The companies bring respective strengths to the table, Altimeter Group analyst Ray Wang said in a blog post.

"[Sterling] built a reputation connecting businesses with their trading community of suppliers, customers, banks and transportation providers. IBM built a strong platform for inter-enterprise integration and SOA governance," he wrote. "Should the acquisition succeed, customers will gain integration across business networks and improve decision making through richer integration."

IBM intends to bring together Sterling's technology with its own "in a way that supports what the Sterling customer set and the IBM customer set wants to do," Hayman said.

Join the Good Gear Guide newsletter!

Error: Please check your email address.

Tags mergers & acquisitionsIBMat&tSterling Commerce

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Chris Kanaracus

IDG News Service
Show Comments

Cool Tech

Lexar® Professional 1000x microSDHC™/microSDXC™ UHS-II cards

Learn more >

D-Link PowerLine AV2 2000 Gigabit Network Kit

Learn more >

D-Link TAIPAN AC3200 Ultra Wi-Fi Modem Router (DSL-4320L)

Learn more >

Xiro Drone Xplorer V -3 Axis Gimbal & 1080p Full HD 14MP Camera

Learn more >

Crucial® BX200 SATA 2.5” 7mm (with 9.5mm adapter) Internal Solid State Drive

Learn more >

ASUS ROG Swift PG279Q – Reign beyond virtual world

Learn more >

Gadgets & Things


Learn more >

Lexar® Professional 1000x microSDHC™/microSDXC™ UHS-II cards

Learn more >

Lexar Professional 2000x SDHC™/SDXC™ UHS-II cards

Learn more >

Family Friendly

ASUS VivoPC VM62 - Incredibly Powerful, Unbelievably Small

Learn more >

Lexar® Professional 1000x microSDHC™/microSDXC™ UHS-II cards

Learn more >

Lexar Professional 2000x SDHC™/SDXC™ UHS-II cards

Learn more >

Stocking Stuffer

Lexar Professional 2000x SDHC™/SDXC™ UHS-II cards

Learn more >

Lexar® Professional 1000x microSDHC™/microSDXC™ UHS-II cards

Learn more >

Christmas Gift Guide

Click for more ›

Most Popular Reviews

Best Deals on Good Gear Guide

Latest News Articles


GGG Evaluation Team

Kathy Cassidy


First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.

Anthony Grifoni


For work use, Microsoft Word and Excel programs pre-installed on the device are adequate for preparing short documents.

Steph Mundell


The Fujitsu LifeBook UH574 allowed for great mobility without being obnoxiously heavy or clunky. Its twelve hours of battery life did not disappoint.

Andrew Mitsi


The screen was particularly good. It is bright and visible from most angles, however heat is an issue, particularly around the Windows button on the front, and on the back where the battery housing is located.

Simon Harriott


My first impression after unboxing the Q702 is that it is a nice looking unit. Styling is somewhat minimalist but very effective. The tablet part, once detached, has a nice weight, and no buttons or switches are located in awkward or intrusive positions.


Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?