AT&T's Tarnished $1.4B Sterling Sale

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

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