Articles

RSS

By Matt Pillar, Editor In Chief

The terms and timing of the deal are old news, for the solution providers involved the transaction is good news, and for retailers there really isn't any news — yet.

After all, the Sterling-IBM combination not only makes good sense, it sort of left me scratching my head again at the notion that Sterling had been an AT&T company in the first place. I've known Sterling for many years and have some friends there, and even recent references to "Sterling Commerce, an AT&T company" caught me off guard. I guess it never seemed a natural fit — at least from my perspective on each company's play in retail. How would a giant telecommunications and network-based computing services provider best leverage a retail software company focused on cross-channel order fulfillment? And, brand affiliation notwithstanding, what AT&T capabilities really lent to Sterling's retail offering? Admittedly, I don't have a full understanding of Sterling's solution set in financial services, manufacturing, and communications (seems there would be some AT&T/Sterling synergy in the communications space), but given the strong ties between IBM and AT&T, I don't suspect any value that Sterling extrapolated from AT&T resources will go away.

IBM and Sterling are — on the other hand — quite complementary. They both sell software — how's that for a start? IBM is not an applications provider, but this acquisition brings a suite of fulfillment applications to its incredibly massive horizontal user base. I think that means big things for Sterling, which is now poised to grow its user base (nothing to scoff at with 18,000+).

I called Jim Bengier, retail industry exec at Sterling, late last week to find out what he anticipates for the retail vertical post-acquisition. While he was quick to disclaim that there's no roadmap yet, he was happy to share his thoughts on IBM/Sterling synergies. "Target provides a good example — they run IBM Websphere on the front end and our order management on the back end. If you're looking for a front-to-back cross channel solution, IBM's acquisition of Sterling is great news for you," he says.

Bengier also points to Sterling's January release of its Mobile Store Associate applications as synergistic with IBM's in-store framework domination, and he says the IBM/Cognos Smarter Planet initiative plays right into Sterling's move toward smart applications.

Joe Horine, director of corporate communications for Sterling, was also on the call and quick to point out that via the acquisition, Sterling picks up a 5,000-strong army of software salespeople. "AT&T brought some interesting things to the table from the mobile perspective, but they sold telecom. IBM sells software, and that's a huge advantage," he says.

In the short term I don't expect much to change for Sterling Commerce retail customers, provided the new parent supports Sterling on the course it's charting. The company is poised at the intersection of cross-channel commerce — right there with the traffic light and the street cop — solving problems and making things happen. Bob Irwin, Bengier and John Stelzer are some of the savviest guys in this business. I think IBM would be wise to take a lesson from AT&T and let Sterling keep doing Sterling's thing.