IBM Closes Emptoris Deal: New Chapter/Technology Outlook for Venerable Spend Management Player

Earlier today, IBM announced it had completed its acquisition of Emptoris (for Spend Matters initial coverage of the acquisition announcement, click here, here, and here). Curiously, IBM appears to have closed the deal more quickly than DemandTec, a provider more focused on the supply chain area than strictly procurement, which it announced before its Emptoris news in mid-December.

The time to close a deal of this size, roughly 45 days from initial press release to closure, is among the fastest we've seen in this market over the years, which could be the result of a number of various items (e.g., due diligence thoroughness, strategic value of a rapid Q1 ramp from a commercial perspective, other strategic activities inside IBM which Emptoris may have a role in). Regardless, it's clear the deal is of high importance to IBM in going after a market (i.e., procurement) that from a technology standpoint, it has historically worked tangentially through solution partnerships.

In its announcement today, IBM says Emptoris' "solutions complement multiple IBM offerings." Specifically, "They supplement the existing B2B integration and supply chain management capabilities IBM acquired through the purchase of Sterling Commerce in 2010. They also complement IBM's Supply Chain Management (SCM) Business Process Outsourcing (BPO) capabilities, a services offering available to clients through IBM Global Process Services (GPS)." IBM also notes in the press release that "Emptoris technology combined with IBM GPS BPO capabilities help accelerate cost savings and speed to benefit," calling out the value of the integrated BPO and software offering for IBM.

IBM further notes that "approximately 725 Emptoris employees will join IBM's software group." Roughly a year ago, when Emptoris announced it had acquired Rivermine, it noted that it had "650-plus employees," suggesting moderate growth in the talent base of the firm over the past 12 months. Last week, Spend Matters had the chance to sit down with a number of members of the Emptoris product and executive team to dig into detail on the company's latest technology offerings and enhancements, including a closer look on the firm's recent platform strategy to create economies of scale in development and bring its multiple solutions and architectures closely in line with each other.

We look forward to sharing some of our observations on the latest releases of Emptoris' solutions as well as how their development vision will likely lead to faster and more iterative innovation cycles and cross-suite enhancements and process/data connectivity -- and potentially even some breakthrough ideas with new and future offerings by bringing together some of IBM's other acquired and organically developed assets. We're also thankful to Emptoris for sharing their technology and platform architecture, capabilities and strategy at a level they haven't disclosed to us before.

Stay tuned as we feature this analysis starting next week.

- Jason Busch

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