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Summary:

AT&T has agreed to sell its Sterling Commerce software division to IBM for $1.4 billion. The deal will let AT&T offload a business unit bought for $3.9 billion at the height of the boom and puts Sterling back in the hands of an enterprise software provider.

AT&T said today it’s agreed to sell its Sterling Commerce software division to IBM for $1.4 billion. The deal will let AT&T offload a business unit that SBC Communications bought for $3.9 billion at the height of the dot-com boom (SBC went on to buy AT&T in 2005 but kept the iconic telecom name). Sterling offers pricing and e-commerce software that businesses can use to manage pricing in real time or to get an entire view of their inventory, from marketing to fulfillment.

However, AT&T isn’t a software company, and the original rationale behind buying Sterling — namely that the phone company could become an exchange for online pricing — never panned out. So even though the sale price is much less than what SBC paid back in 2000, the deal is a good way for AT&T (which never integrated Sterling into its business) to get rid of a non-core asset. IBM’s acquisition will pit it against similar software from HP and other large enterprise software providers, which is where Sterling belongs anyhow.

Image courtesy of Flickr user zzzack

By Stacey Higginbotham

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  1. This my business – we offer an alternative to Sterling’s VAN communications services with an EDI Web Services Network. Sterling has languished under AT&T, and the entire Gentran mapping and file translation ‘mafia’, is on its way out. They have a good book, and IBM will do its best to assimilate the good bits, but the WebSphere division will have a hard time with the two different philosophies of how trading partners interconnect.

    The Web Sphere division has killed its fair share of acquisitions. I wonder if getting out from under a Common Carrier’s Shadow will give Sterling more elbow room, or if IBM will divest the EDI Communications end of the business, ???

    The last thing they care about is the arcane VAN business, and Web Sphere has always managed closed networks of trading partners, occasional awkward FTP and AS2 hubs, and VAN connections, i’ll bet that Sterling and IBM are sitting around a bucket of fried chicken right now deciding if the VAN business is too much trouble.

    I know! I Know!! Ohhhhh…..IBM! IBM! Please use ECGridOS to replace Sterling’s VAN communications and we will replace the whole thing!!!!!! IBM, sing the EDI guy song with us http://www.youtube.com/watch?v=UATIIy3XLAY

    Sweet. I see it all now! Swimming pools…movie stars. Let IBM leave behind the old, moldy sterling network for the modern and shiny Loren Data Corp Network, we can streamline the whole thing, and IBM can pick apart the bones of Gentran.

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  2. [...] customer bills or deliver real-time information about subscriber habits. Sterling Commerce, which IBM recently bought for $1.4 billion, offers some products in this area, and a focus on back-end systems software is why Tekelec bought [...]

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