IBM to take over e-procurement provider Emptoris

16 December 2011

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16 December 2011 | Paul Snell

IBM has announced it is to acquire the e-procurement provider Emptoris.

The size of the deal for the US spend management technology provider, which has more than 350 customers worldwide, including Anglo American, Heinz and GlaxoSmithKline, was not disclosed.

An IBM spokesman told Supply Management that it would be premature to discuss the impact on customers, but there would be a clearer picture when the deal was finally closed. No closing date has yet been announced.

Duncan Jones, vice-president, principal analyst, sourcing and vendor management at Forrester Research said: “Emptoris customers and prospects will have a lot of questions about what this means for the product long-term, but I’m afraid they’re going to have to be patient and wait and see what happens in the months after the acquisition closes.

“My advice to CPOs would be to give IBM the benefit of the doubt for now, but also extend existing contracts to lock-in favorable terms, and create medium-term migration plans so that they are ready, just in case.”

IBM said the intention was to integrate Emptoris into its ‘Smarter Commerce' initiative launched earlier this year, which is providing technology to organisations to automate their buying, selling, marketing and service processes.

"Procurement is being asked to show how it can deliver value to the organisation,” said IBM’s general manager of industry solutions, Craig Hayman. “[Acquiring Emptoris] enables IBM to meet the specific needs of chief procurement officers."

The company purchased supply chain transaction technology firm Sterling Commerce for $1.4 billion (£903 million) from AT&T in May 2010. It said the acquisition of Emptoris would be complementary.

In May, Emptoris purchased the German supplier management systems provider Xcitec to boost its supplier information service. It also bought up the telecom spend management specialists Rivermine in January.

* Meanwhile, IBM yesterday agreed a set of legally binding commitments with the European Commission (EC) to ensure competition in the market for mainframe maintenance.

The EC had been investigating if IBM had a dominant market position and was potentially in breach of antitrust rules. The agreement, which sees the investigation close with no firm conclusion, means IBM will make spares and technical information available to independent mainframe manufacturers under commercially reasonable terms.

Update, 1 February 2012

IBM today confirmed the acquisition of Emptoris has been completed. Announcing the successful completion of the deal, Craig Hayman, general manager of industry solutions at IBM, said: “Together, Emptoris and IBM’s integrated solutions will transform how clients manage compliance and mitigate supply risk.”

While the value of the deal remains undisclosed, IBM confirmed that approximately 725 Emptoris staff will join IBM’s software group. The logo on the provider’s website now reads, ‘Emptoris, an IBM Company’.

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