Continuing its acquisition spree, IBM recently announced a definitive agreement to acquire Emptoris Inc., a Burlington, Massachusetts based provider of cloud and on-premise analytics software that will improve the procurement and supply chain operations of the company's Smarter Commerce offerings by adding intelligent spend, supplier and contract management. [1] IBM, which competes with firms like Oracle, HP, SAP and Microsoft, launched its Smarter Commerce initiative in March 2011 to help companies better respond to fast-changing customer buying patterns.
We currently have a $187 Trefis price estimate for IBM.
About Emptoris
Emptoris' solutions offer new, flexible and integrated management of the sourcing and procurement of goods and materials which enable organizations to better manage their inventory and identify significant savings opportunities. These additions are likely to make Smarter Commerce a more lucrative "buy" for c-level executives including chief procurement officers, chief supply chain officers and chief financial officers among others.
Why IBM Needs Emptoris?
IBM estimates that the market opportunity for its Smarter Commerce initiative at a whopping $20 billion in software alone. In the era of mobile and social networks, organizations are struggling to meet the demands of rapidly shifting customer buying patterns and IBM identifies a need for greater automation across their buying, marketing, selling and service processes for them in order to remain competitive.
Emptoris acquisition makes sense for IBM as it's the leader in automating vendor selection, negotiation, management and compliance, and will allow IBM to deliver more solutions focused on the needs of sourcing and procurement professionals. Emptoris' solutions also complement IBM's existing B2B integration and supply chain management capabilities which the company acquired through the purchase of Sterling Commerce in 2010.
We believe this addition will likely boost the adoption of IBM Smarter Commerce adoption and could foresee more such acquisitions in the future as the Big Blue continues to target wider audience through its initiative.
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Notes:
- IBM Acquisition of Emptoris Bolsters Smarter Commerce Initiative, Helps Reduce Procurement Costs and Risks, IBM [↩]
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