IBM will acquire Emptoris Inc., a provider of cloud and on-premise analytics software for procurement and supply chain operations. Terms of the deal were not released. Founded in 1999, Emptoris was majority owned by Los Angeles-based private equity firm Marlin Equity Partners. Emptoris is based in Burlington, Mass.
IBM (NYSE: IBM) today announced a definitive agreement to acquire Emptoris Inc., a leading provider of cloud and on-premise analytics software that brings more intelligence to procurement and supply chain operations with spend, supplier and contract management for Smarter Commerce. Financial terms were not disclosed.
With more than 350 customers in 75 countries, Emptoris is based in Burlington, Mass. with offices in the U.S., U.K., France, Germany, Australia, India, Brazil and China. Emptoris’ global clients span multiple industries including consumer products, financial services, healthcare, telecommunications, chemical/oil/gas, utilities, construction and industrial manufacturing.
The acquisition is the latest addition to IBM’s Smarter Commerce initiative, launched in March 2011, which is aimed at helping companies respond to shifting customer buying patterns. Emptoris brings to IBM Smarter Commerce a set of new, flexible and integrated solutions that orchestrate and manage the sourcing and procurement of goods and materials as part of supply chain management. Supply chain intelligence using these solutions enables better inventory management and can create large savings opportunities.
For example, a large global oil and gas company established a centralized sourcing network across its entire enterprise operating in more than 80 countries, which enabled them to focus on the most strategic, highest cost, frequently-purchased items. This brought speed, transparency and simplification to the sourcing process. As a result, the company runs thousands of sourcing events per year managing more than 15,000 suppliers in 10 languages, achieving more than 9 percent reduction on managed categories of goods.
IBM has estimated that the Smarter Commerce initiative is a $20 billion market opportunity in software alone. Smarter Commerce helps organizations that are struggling to meet the demands of rapidly shifting customer buying patterns in the era of mobile and social networks. This new digital marketplace requires companies to respond rapidly to customer demands by automating their buying, marketing, selling and service processes. Developing the right procurement strategy and an adaptive supply chain are keys to success in this evolving environment. According to industry analysts(1), IBM is a recognized leader in multiple categories within Smarter Commerce.
With this acquisition, IBM builds on its capabilities in the “buy” aspect of Smarter Commerce and extends it to a new line of c-suite executives – chief procurement officers. This growing list of decision makers includes chief information officers, chief financial officers, chief supply chain officers and chief marketing officers. Procurement and sourcing professionals increasingly need better supplier management, spend analysis and contract management solutions to lower sourcing costs and risks. Emptoris is a leader in delivering these benefits by automating vendor selection, negotiation, management and compliance.
Emptoris’ spend management solutions complement the existing B2B integration and supply chain management capabilities IBM acquired through the purchase of Sterling Commerce in 2010. The Emptoris acquisition will allow IBM to deliver more solutions focused on the needs of sourcing and procurement professionals.
“IBM is continuing to deliver innovative solutions to help organizations put the customer at the center of their business operations,” said Craig Hayman, General Manager of Industry Solutions at IBM. “Procurement is being asked to show how it can deliver value to the organization. Adding Emptoris strengthens the comprehensive capabilities we deliver and enables IBM to meet the specific needs of chief procurement officers.”
“Emptoris leadership in the ‘buy’ or supply chain capabilities of Smarter Commerce enables customers to better source, optimize and control enterprise spending,” said Patrick Quirk, CEO, Emptoris. “Procurement officers need to manage the full engagement, integrating suppliers with key internal systems and have the capability and visibility to manage compliance and mitigate supply risk. That is the value we bring to the procurement organization.”
The Emptoris acquisition also will complement IBM’s Supply Chain Management (SCM) Business Process Outsourcing capabilities within its Global Process Services organization. Emptoris’ expertise and technology enhances IBM’s Procurement and Supply Chain services, including its ability to apply category expertise and global operations to help clients streamline and automate supplier interactions, resulting in improved strategic sourcing, reduced service costs, and greater savings from spend with suppliers.
Founded in 1999, Emptoris has over 725 employees around the world. The acquisition is anticipated to close in the first quarter of 2012, subject to the satisfaction of customary closing conditions and applicable regulatory reviews.