Uncommon Wisdom

May 25 2010   12:04PM GMT

IBM’s Sterling Commerce buy says enterprise cloud initiative



Posted by: Tom Nolle
Tags:
Cloud computing
e-commerce
IBM
mergers & acquisitions

In a move that could signal a major change in the cloud computing dynamic, IBM announced it was buying Sterling Commerce in a $1.4 billion all-cash acquisition. Sterling is a B2B service company that started its life as one of the electronic data interchange (EDI) network vendors that facilitated electronic commerce and operates a hosted trading partner network for connecting business partners.

The reason this could be very important is that Sterling is still a major player in e-commerce and EDI and is a professional services company in the same space. Transactions between companies and the support of inter-company (B2B) activity is a fertile space for launching an enterprise cloud initiative, in our view.

In many cases, EDI was handled independently of other IT and network activities, which is how Sterling got its start. That it has remained separate makes it easier for the EDI sector to adopt cloud principles. We think IBM sees clouds in the deal and not just B2B. Another interesting thing about this deal is that Sterling was owned by AT&T, which we would think would have wanted the company for the same reason IBM does.

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