IBM to buy AT&T’s Sterling Commerce for $1.4 billion

IBM said today that it is buying  business-to-business commerce solutions company Sterling Commerce from AT&T, for $1.4 billion in cash.

The acquisition of the Dublin, Ohio-based company will expand IBM's ability to help organisations create more intelligent and dynamic business networks by simplifying and automating the way they connect and communicate with customers, partners and suppliers both on-premise or through cloud computing delivery models.

Sterling Commerce more than 18,000 global clients that use its collaboration networks include H.J. Heinz Co., Motorola Inc., Boise Cascade and Boston Market Corp.

The Armonk, New York-based IBM said that Sterling Commerce offerings strongly complement its middleware portfolio. By acquiring Sterling Commerce technology and its large trading partner network, IBM anticipates it will be able to deliver powerful new cross-channel solutions to its clients.

In addition, Sterling Commerce technology will complement IBM's industry-focused software offerings, enabling the addition of capabilities to IBM's frameworks supporting the retail, manufacturing, communications, health care and banking industries.

"Sterling Commerce is a solid business that complements IBM's suite of products and services. Our focus is on developing and providing a world-class portfolio of networking-based solutions and services, including network- and cloud-based data storage and managed hosting, application and computing services," said Ray Wilkins, chief executive officer, AT&T Diversified Businesses.

"The broad global reach and additional capabilities IBM offers make this acquisition great news for our customers and partners," said Bob Irwin, chief executive officer, Sterling Commerce. "The combination of IBM's products, services and skills with the Sterling Commerce B2B integration and cross-channel capabilities resulting from this acquisition is unparalleled."

After stopping its personal computer business in 2004, IBM has been focussing on software development business, which has become its most profitable division.

Sam Palmisano, the CEO of IBM has said that the company would spend $20 billion in the next five years on acquisitions in order to boost its software business. Since the beginning of 2010, IBM has made four acquisitions including Sterling Commerce.