IBM and SAP pursue big deals

A day after setting speculation alight with the revelation that it was looking to make some “significant” acquisitions, German enterprise applications vendor SAP announced a deal that few had predicted: the acquisition of relational database software vendor Sybase.

SAP said that the $5.8 billion deal was motivated by Sybase’s SQL Anywhere product, which allows relational database applications to run on a range of platforms, including smartphones and tablets. This, the company said, would allow it to port its own applications onto these devices.

However, the division that sells SQL Anywhere represents only around a third of Sybase’s business. The company’s flagship product is a relational database server product called ASE, which allows multiple transactional databases to be managed from a single environment.

SAP’s ownership of Sybase ASE draws yet another point of competition with its arch rival, database veteran Oracle.

Trading Sterling

IBM, meanwhile, announced its intention to acquire Sterling Commerce, a company that sells business-to-business payments networks, from its current owner, US telecoms 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 will be re-entering 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.”

Although IBM’s share price dipped slightly after the deal was announced, the acquisition was met with the broad approval of IT analysts.

The same could not be said for Symantec’s $1.4 billion acquisition of the authentication
and identity software business of Internet infrastructure supplier Verisign, described by one analyst as a “bad idea”.

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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