You may have been on vacation and not noticed, but IBM received final regulatory approval to acquire Sterling Commerce on August 27th.  This will likely lead to significant enhancements in B2B capability for IBM and Sterling Commerce customers.  Here's our guess as to what you can expect from an integration product perspective:

• A more functional B2B integration software lineup. IBM customers will have access to Sterling Commerce technology that supports comprehensive features for monitoring and managing partner and suppliers. They will also have access to a range of supply chain applications that Sterling Commerce has deployed in several vertical industries like automotive, manufacturing, retail, and distribution.
• A cloud-based integration environment. Both IBM and Sterling Commerce customers will likely have increased options for implementing cloud-based integration based on the robust B2B network that IBM now owns and the integration appliance options (Datapower and Cast Iron) that are also available. Expect a major thrust in this area.
• Upgraded SOA capability. Sterling Commerce customers will find it easier to implement SOA capabilities using the strong capabilities that IBM can bring to bear in this area.

Stay tuned for more details. We'll be getting formally briefed on this subject in a couple of weeks (once the IBM/Sterling Commerce team have completed their product road map), and we'll pass on the details at that time.

As always, I'd be interested in your thoughts about this acquisition. Please send me your comments to kvollmer@forrester.com or just comment directly to this post.

Situations like this typically need a single vendor to take the first step, and then others follow. In this vein, we believe that IBM's move to acquire the 2nd largest B2B service provider in the world will get others (like Oracle, Software AG and TIBCO) to consider similar moves. Why? If you are a vendor that provides internally focused application and process integration solutions, the next logical step is to provide comprehensive B2B integration solutions to address the full range of the integration needs of your customers. That means B2B solutions that go beyond support for Web services and AS2-based EDI/INT transactions.

The vast majority of enterprises that are involved with B2B activity still rely heavily on 3rd party B2B networks for the movement of their EDI transactions. Many of these firms have large trading partner communities that have proven to be highly resistant to change where the prevailing attitude seems to be, "if it ain't broke, don't fix it." The fact of the matter is that B2B networks will continue to play a key role in meeting overall enterprise integration needs for the foreseeable future.

Another factor that we believe drove IBM's decision is the emergence and growing importance of cloud-based SaaS integration solutions. These applications require a hosting environment, and the Sterling Collaboration Network is tailor-made to fit this new requirement. IBM will now have its own B2B network to support this growing market. There are many other interesting aspects to this proposed acquisition. For details, refer to our just-published document entitled "IBM To Acquire Sterling Commerce": http://www.forrester.com/rb/Research/ibm_to_acquire_sterling_commerce/q/id/57109/t/2

Today's announcement that SAP will acquire Sybase is a major event in the software world, but it will not fill key gaps in SAP's integration capability.  If the $5.8 billion deal goes through SAP will gain strong mobile integration and database features, but the existing shortcomings of NetWeaver PI in the areas of application and process integration in heterogeneous environments remain. 

NetWeaver is a credible solution for integration challenges between numerous SAP business applications, but it has proven to be inadequate for solving integration between SAP apps and apps from other sources (both home grown and other commerically available business applications).  The Sybase acquisition does not alter this fact.

For a deeper look into the challenges faced by SAP customers when trying to rely on NetWeaver for their non-SAP integration needs, refer to our May 5th document entitled, "It's Time To Tame The ERP Integration Beast".

As always, your thoughts are welcome.  Drop me a line at kvollmer@forrester.com.

Thanks,

Ken

I'm continually reminded of the tremendous diversity of enterprise technology needs. As analysts, we tend to focus on the "latest and greatest" developments, but the reality is that many enterprises are not ready to digest the latest technology solutions. In fact, I would submit that premature attempts to implement leading edge technology can cause serious problems and should be avoided. 

How do you know if a technology update is premature?  Look to the business side of the house.  Are there major business pain points that cannot be addressed by the current technology?  If so, IT should be looking to implement new capabilities.  However, lacking new drivers from the business side, maintaining the status quo might not be that bad of a strategy. 

In the past six months I've spoken with several $1B+ enterprises (some greater than $5B) that are achieving good business results using batch-oriented technology with the most sophisticated software being ETL tools.  Hardly leading edge, but the important point is that it works. 

Think of the need for advanced technology as a continuum.  At one end you have financial institutions using logarithmic trading and high-tech manufacturers relying on real-time supply chain operations.  At the other end of the spectrum you have many retailers and others still living in a batch dominated world. In between you have players in many other sectors with highly variable needs that rely on both real-time and batch processing to meet their requirements. 

Don't expect this diversity to disappear anytime soon. 

During the past month there has been a rash of acquisitions/mergers announced that will have a direct impact on many integration software and service providers. First let's look at the details.

IBM's announcement that it will acquire Lombardi tops the list with the highest potential customer impact. The IBM WebSphere stack is widely used and the Lombardi acquisition will provide stronger human-centric BPM features to what is already available to IBM customers. Look at Clay Richardson’s blog for more specifics on the IBM/Lombardi deal.