Monday, May 24, 2010

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

IBM acquiring Sterling Commerce is big news in the world of EDI.  2010 has turned out to be the year of consolidation among the big players in EDI.  First came news that GXS was acquiring Inovis, SAP committing to the SAP Information Interchange by Crossgate, and now IBM is buying Sterling Commerce from AT&T.

Why is this happening in 2010?  In the article EDI Competition in the SAP Ecosystem, I shared my thoughts on this trend.  Legacy EDI companies realize they must form business networks to remain relevant in the long term.  Networks that operate in a cloud computing environment and provide fast, efficient, reusable, and cost effective EDI and B2B connectivity to the members of the networked community are the future.

Let's talk about the term "networked community."  The most natural networked community is a community of software users that share the same ERP (think SAP or Oracle).  These companies share similarities in software applications, integration points, business processes, data requirements, knowledge, and technology platforms.

SAP's earlier investment in Crossgate, and now their release of the SAP Information Interchange, is a good example of this move in the market.  AT&T must have realized that maintaining a legacy third party EDI system is not the future.  Independence is not a virtue in a world of Facebook, iTunes and LinkedIn.  The power is in the linked and connected community!  EDI and B2B technologies and managed service hubs must be associated with technology platforms, ERPs, and industry communities where connections and links can be reused and the entire community benefits from each new member.

Author: Kevin Benedict CEO/Founder Netcentric Strategies LLC
SAP Mentor, SAP Top Contributor
SAP EDI Consultant, Mobile Industry Analyst and Web 2.0 Marketing Consultant
***Full Disclosure: I am an independent consultant that has worked with and for many of the companies mentioned.

1 comment:

  1. I agree that Oracle and SAP and their user communities may find the "networked community" appealing. It seems to me this is due to the factors you stated, most notably, the data architecture that is common to the ERP instances exchanging data.

    However, I'm somewhat confused about the appeal for traditional EDI service providers and users. The only factor in common is the data architecture of the exchange format (EDI).

    What am I missing?