Merger Ties B2B Integration Tools With Selling And Fulfillment

On May 24th, IBM surprised the market with its $1.4B, all-cash, definitive agreement to buy Dublin, Ohio based Sterling Commerce from AT&T.  Sterling Commerce was purchased by SBC Communications in 2000 for its strengths in B2B integration.  As an AT&T company in 2005, they acquired Yantra for its supply chain fulfillment and distributed order management solutions (DOM).  In 2006, the company acquired Nistevo for transportation management systems (TMS) and in 2007 bought out Comergent, a leader in selling and order management solutions.  Sterling Commerce currently employs 2500 people and has 18,000 customers around the world.  According to Sterling Commerce’s CEO, Bob Irwin and IBM Websphere’s General Manager, Craig Hayman, the acquisition occurs for a few reasons:

• Integration solutions for dynamic business networks. Sterling focuses on B2B integration and managed file transfer (MFT).  B2B integration solutions include offerings such as GenTran, Collaboration Network, Integrator, eInvoicing, Mobile Solutions, and B2B Managed Services.   MFT helps organizations move vast quantities of information quickly and securely across data networks.  Sterling delivers the services in both on-premise and on-demand.
  
  Point of View (POV): Sterling’s flagship product “the VAN”, brought external business and trading partners together.  They 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.  Should the acquisition succeed, customers will gain integration across business networks and improve decision making through richer integration.  Key Sterling Commerce integration customers include BNP Paribas,  Union Bank, Toshiba, Tenneco, Sony, Nordstrom, True Value and others.

• Selling and fulfillment solutions that extend the value chain.  Sterling Commerce owns the leading order selling and fulfillment suite in the market.  Solutions allow organizations to deliver configure, price, and quote complex products and services (CPQ), cross channel order fulfillment, inventory logistics, and transportation management.  Sterling often competed with WebSphere commerce solutions for customers.
  
  POV: Sterling originally made commerce application acquisitions with Comergent, Yantra, and Nistevo to extend the value of the integration network.  The result – an end to end order and fulfillment suite that solved the tough issue of delivering a “perfect order”.  Sterling Commerce’s order hubs often beat out traditional ERP solutions that tried to force fit end to end processes into their functional focused solutions.  Consequently, IBM WebSphere Commerce gains key components to improve its technologies.   More importantly, on-demand delivery will play a significant role going forward.  Key order hub customers include Best Buy, Walmart, Staples, Lowes,  Guthy Renker, LifeTouch, Cabellas, and others.

• Industry alignment that complements IBM’s vision.  IBM goes to market by verticals and vertical frameworks in all its divisions.  Sterling Commerce’s focus on financial services, retail, telecom, and manufacturing verticals complement IBM’s overall industry strategy and should play a key role in building value in each vertical.
  
  POV: Financial services will benefit from regulatory compliance, high volume integration, and secure file transfer.  Retail gains better customer experience, end to end order management, and cross-channel selling capabilities.   Telecom providers improve services and product bundling, complex order orchestration, and fulfillment accuracy.  Manufacturers obtain cross channel supply chain visibility, improved order management, and better partner on-boarding.

The Bottom Line – Customers Gain A Logical And Stable Home

IBM approached Sterling Commerce because of the rich customer base and its technology leadership in B2B Integration and Order Hubs.  Over time, Sterling Commerce customers will gain a much needed middleware platform with a strong set of SOA and BPM tools.  While AT&T did provide Sterling Commerce with tremendous autonomy,  synergies were limited to channel sales and hosting.  In fact, Sterling Commerce played a minor role in the overall AT&T strategy.  Ownership by IBM fits into a larger dynamic business network vision which requires integration and is bounded by capabilities to enable commerce.   IBM makes more sense as a home for Sterling Commerce and as a partner to AT&T.  As with all mergers and acquisitions, customers should stay vigilant about retaining key service and support staff, providing input into product direction, and maintaining favorable software licensing and contract terms.

Your POV.

Are you a Sterling Commerce customer?  Do you see the synergy with IBM?  If you are an IBM customer, have you ever heard of Sterling Commerce?  Do you see the value in this acquisition?  Would you like more information on what it means to be acquired by IBM?  You can post or send on to rwang0 at gmail dot com or r at softwaresinsider dot org and we’ll keep your anonymity.

Please let us know if you need help with your apps strategy efforts.  Here’s how we can help:

• Assessing apps strategies (e.g. single instance, two-tier ERP, upgrade, custom dev, packaged deployments”
• Designing a perfect order process and system
• Evaluating SaaS/Cloud integration strategies
• Assisting with legacy ERP migration
• Planning upgrades and migration
• Performing vendor selection
• Providing contract negotiations and software licensing support

Related resources and links

• 20090411 Software Insider – R “Ray” Wang “Order Management Hubs and Perfect Orders”

Disclosure

Although we work closely with many mega software vendors, we want you to trust us more.  IBM is currently a retainer client of Altimeter Group and not a client of Insider Associates, LLC.  Sterling Commerce is not a client of Altimeter Group nor Insider Associates, LLC.  For the full disclosure policy please refer here.

Copyright © 2010 R Wang and Insider Associates, LLC. All rights reserved

Ashesh Badani became Sr. Director, Middleware/JBoss at Red Hat in January 2010 escaping the clutches of Oracle.  Previous roles include a 3 year stint at Sun Micro Systems as a  Director for Product Management/Marketing & Middleware Solutions.  Other product roles include Director of Marketing at 3VR.

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Title: Vendor Event: Sterling Commerce Customer Connection
Location: Gaylord Texan Hotel & Convention Center, Grapevine, Texas
Link out: Click here
Start Date: 2010-04-12
End Date: 2010-04-14
Description:

Help your organization thrive
Sterling Commerce Customer Connection 2010, which will be held at the Gaylord Texan Hotel & Convention Center, Dallas, Texas, April 12 – 14, is your opportunity to learn about technology innovations and trends, network with peers, and catch up on best practices. Customer Connection will help your organization strengthen its Business Collaboration Network so that you can accelerate revenue and reduce costs.

Take advantage of every opportunity

* Gain more value from your current Sterling Commerce solutions through a training curriculum offered before and after the main event.
* Take advantage of the educational opportunities of more than 80 sessions led by industry analysts, customers, and representatives from Sterling Commerce Product Marketing, Engineering, and Customer Support.
* Examine best practices and innovations across all industries.
* Discover technical trends and emerging opportunities for 2010 and how your organization can capitalize on them.
* Exchange ideas and experiences as you network with peers to learn how others are addressing key challenges.

Go for valuable educational sessions
Choose from a wide range of educational topics. Here’s a sampling:

* Learn about the changes companies are making to help weather the economic storm
* Discover how to obtain a secure, reliable and flexible file transfer management system to optimize business process integration and data transfer
* Find out why VANS are “out” and Business Process Networks are “in”
* Learn how to provide a unified, cross-channel experience for your customers
* Plus 80 more sessions and topics

Register

Title: Sterling Commerce Customer Connection
Location: Grand Hyatt San Antonio – San Antonio, Texas
Link out: Click here
Description:
Sterling Commerce Customer Connection
4/27/2009 – 4/29/2009 Grand Hyatt San Antonio – San Antonio, Texas

This is the event you won\’t want to miss. You’ll join some of the top companies in the world to hear thought-provoking ideas, participate in focused educational sessions, and learn best practices.

What will you gain from Customer Connection?

* Hear directly from the experts about the latest technology innovations, newly released products, and future roadmaps.
* Network with peers and enjoy face time with Sterling Commerce Executives, Engineering, Product Management, Customer Support, Product Marketing, and more.
* Capitalize on insights and perspectives from those “in the know,” including industry thought leaders, analysts, and keynote speakers.
* Explore trends and best practices through a wide range of sessions led by analysts, customers, and engineers.
Start Date: 2009-04-27
End Date: 2009-04-29

FORWARD AND COMMENTARY

In the second update to the industry’s only business process-focused assessment of its kind, we evaluated eight leading order management hubs in a 152-criteria evaluation. The Forrester Wave provided head to head comparison of which order management hub solution would best support the 20 steps in a perfect order.  Importantly, the end to end business process included four major sub processes: Opportunity to Order Capture, Order Capture to Order Fulfillment, Order Fulfillment to order Completion, and Order Completion to Cash.

These demo-based product evaluations were conducted from April 2008 to August 2008 and interviewed eight vendor and 40 user companies including: Amdocs, Epicor Software, Infor, Manhattan Associates, Microsoft, Oracle (E-Business Suite and Siebel), SAP, and Sterling Commerce.  Unlike other analyst evaluations, the Forrester Wave contains no “magic” and provides end users with both transparency of the scoring process and flexibility to personalize weightings to best meet an end user’s scenario.  The tool is accessible via an XL spreadsheet.

RESEARCH HIGHLIGHTS

Introduction

Perfect orders drive a direct correlation to positive stakeholder satisfaction scores. Despite the benefits, success in consistently delivering a perfect order eludes many enterprises because existing systems lack the process and functional flexibility to deftly move orders across the end-to-end order management cycle. With pressure on enterprises to seek new ways to create market differentiation, order management hubs rise to prominence because:

• Process-centric views trump yesterday’s functional fiefdoms.
• Standardized best practices provide little value in today’s constant world of change.

Research Findings

We found that Sterling Commerce and Oracle E-Business Suite led the pack among the Leaders who delivered technologies that support the perfect order. Meanwhile, Oracle Siebel, SAP, and Epicor Software earned their Leader designation because of their strong support for end-to-end order management processes and forward-looking product strategies. Microsoft, Amdocs, and Manhattan Associates placed in the Strong Performer category for their specialization in targeted markets. The solutions evaluated represent eight of the top 10 to be considered in shortlist discussions for order management hubs customers seeking to achieve a perfect order: (See Figure 1.)

Figure 1: The Forrester WaveTM: Order Management Hubs, Q4 ’08

Source: Forrester Research, Inc.

Report Links

Click on the link for the in-depth details and scores related to the 152 criteria used in this Forrester report: The Forrester Wave^TM: Order Management Hubs, Q4 2008.  For media courtesy requests, please send me an email to rwang@forrester.com

Your POV.

Would love your feedback on the report.  You can post here or send me a private email to rwang0@gmail.com.

Copyright © 2008 R Wang. All rights reserved.