IBM aims to make payments ‘smarter’ with Sterling Commerce buy 

IBM yesterday announced its intention to acquire Sterling Commerce, a company that sells business-to-business payments networks, from its current owner, US telecommunications giant AT&T.

The deal is worth $1.4 billion, making it IBM’s largest acquisitions since 2008. AT&T said that owning Sterling Commerce is "no longer core to [its] long-term strategic objectives".

In buying Sterling Commerce, IBM is reentering a market it left in 2005, when it sold its Business Exchange division to payments service provider GXS.

The intervening years have seen IBM launch a number of so-called “Smart” initiatives, such as its “Smart Planet” sustainability drive and its “Smart Business” cloud strategy. Each of these advocates addressing business problems with information management approaches such as analytics, integration or event monitoring, rather than with pre-packaged applications, which IBM does not sell.

By adding Sterling Commerce to its WebSphere middleware range, IBM will be able to “help clients build dynamic business networks that connect partners, suppliers and clients and deliver a consistent customer experience across channels," said WebSphere general manager Craig Hayman in a statement. “In addition, the fact that much of this can be done in the cloud will make it compelling to large numbers of our customers”

The acquisition was met with the broad approval of IT analysts – “There are real opportunities for synergies here,” said Forrester’s Ken Vollmer, for example – although IBM’s share price dipped slightly after the deal was announced.

Pete Swabey

Pete Swabey

Pete was Editor of Information Age and head of technology research for Vitesse Media plc from 2005 to 2013, before moving on to be Senior Editor and then Editorial Director at The Economist Intelligence...

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