Somewhat quietly, IBM is building a formidable portfolio of supply chain software solutions that has the potential to shake up the existing market.
In its latest move, IBM announced this week that it was acquiring Sterling Commerce from AT&T for some $1.4 billion.
Largely, the deal was driven by IBM’s interest in Sterling’s Collaborative Network, developed from its roots as one of the largest EDI networks for business-to-business integration, upon which it has added a number of other integration-related solutions.
But along for the ride with the deal also come Sterling’s supply chain applications in such areas as transportation management, distributed order management and more. Sterling had acquired these applications over the past years to leverage its presence in corporations for B2B integration and the cross-sell those customers these more direct supply chain solutions, with some but not yet outstanding success to date.
Now, the Sterling Collaborative Network will be folded in to IBM’s Websphere group, along with another acquisition that IBM recently made of Cast Iron, a company which provides “Cloud” integration services. The net of all of this is that between the existing Websphere integration, workflow and ecommerce solutions and the newly acquire traditional (Sterling) and Cloud (Cast Iron) integration services, IBM offers a substantial amount of B2B capabilities – on top of which certainly can be added additional supply chain applications with likely more clout and savvy in gaining these synergies than Sterling was able to achieve.
But this is just the latest in a series of IBM supply chain software moves. In 2007, Big Blue acquire Cognos, a provider of business intelligence and analytic solutions, which can and often do play a key role in Sales & Operations Planning (S&OP) processes at its customers, and which can also be used for supply chain analytics and performance management.
In 2008, IBM spent $340 million to acquire ILOG, which itself had acquired Dr. David Simchi-Levi’s LogicTools not long before that. That acquisition not only gave IBM ILOG’s optimization and rules engine technology, but also its growing array of supply chain applications in such areas as network design and optimization, inventory optimization, factory scheduling and more. IBM has been very aggressive in promoting these solutions, such as by adapting them for new opportunities into the retail sector.
(Supply Chain Trends and Issues Article - Continued Below)