On Monday, IBM announced that it had reached a legal agreement to buy Sterling Commerce from AT&T in an all-cash transaction of approximately $1.4B. Yes you read that correctly. $1.4B in cash.

It’s the first major acquisition after Sam Palmisano discussed a pool of cash to the tune of $20B set aside for strategic purchases. Obviously the acquisition is subject to all the normal applicable regulatory clearances and other customary closing conditions, but the deal is expected to close later on this year.  So what is the detail behind the deal and why is it important?  I thought I’d take a look at the details available to ascertain a bit more about what Sterling Commerce do, and what products and services the company provides.  What I found was that B2B integration and the ambition to provide cross-channel selling infrastructure are at the heart of the deal.

So who are Sterling Commerce?

In essence Sterling Commerce is a software and services company that specialises in business to business integration, order management and logistics, as well as cross-channel selling and fulfillment solutions.  Their aim is “to help businesses connect, communicate and collaborate with their clients, partners and suppliers to increase revenues, reduce costs and streamline the way organisations do business.”  Not a bad business mantra at all.  And with IBM aiming to be top of mind and centre of attention when it comes to demonstrating the ability to provide the middleware to support intelligent, dynamic business networks, improved customer experience and seamless cross-channel sales and fulfilment – at face value this seems like a wise move.

Whilst you may not have heard of Sterling Commerce, the company is not new.  For over 30 years, Sterling Commerce has “enabled industry-leading companies to engage in productive collaboration with customers, partners and suppliers and they state more than 18,000 clients worldwide” according to the press materials distributed after the announcement.  And it’s also fair to say that Gartner, Forrester and the analyst community pretty consistently list Sterling Commerce as leader in B2B integration and crosschannel solutions.

Also interesting is the fact that Sterling Commerce’s selling and fulfillment solutions are available both as “on premise” licensed software and as SaaS (Software as a Service) and Managed Services.  This is an area that IBM has typically been quite slow to move into – but is rapidly engaging in.

But why did IBM splash the cash?

There is no doubt that there has been a huge shift in recent years toward fully integrated systems across front and back offices.  In retail that means the integration of key business processes through the entire cross-channel lifecycle – from marketing and selling to order management and fulfilment.  And that is why this deal makes a great deal of sense.  IBM will use this acquisition to provide retail (and indeed manufacturing or distribution clients) with the flexibility to extend the management of their network of business partners through public or private cloud computing environments.  And their ultimate aim?  To make supply chains and partner networks smarter and much more efficient by enabling integration beyond the enterprise while improving the customer experience through a seamless cross-channel sales and fulfillment capability.

There is no doubt in my mind that if you can integrate internal systems AND the entire value chain it is possible to attain rich information that can be used to identify actionable insight in operations, and an agile infrastructure on which to act on those insights.  Sterling Commerce’s strong capabilities in B2B integration, B2B focused cross-channel selling and order management and fulfillment capabilities will only help IBM reach this objective.  And the combination of IBM’s SOA solutions with Sterling Commerce B2B integration accelerates IBM’s ability to extend SOA and BPM capabilities beyond organisational boundaries to clients, partners and suppliers.

It will be fascinating to watch how Sterling Commerce technology be integrated into the IBM software portfolio. IBM’s stated intent is to integrate offerings from Sterling Commerce into IBM’s Software Group as part of the AIM (Application Integration Middleware) division.  We will have to wait for the acquisition to close before we see the beginning of any impact.  But I should imagine IBM’s completeness of vision and ability to execute have been sharply increased.  And it will be up to business partners like Salmon to help realise the potential.

SAFE™ is a series of preconfigured, reusable and customisable eCommerce components that allows a merchant to deliver a production ready eCommerce solution very quickly. SAFE™ speeds up and simplifies the delivery of an IBM WebSphere Commerce based eCommerce solution. It also lowers the risk associated with launching a new eCommerce capability or replacing an existing eCommerce application:

“From day one the relationship between Salmon and Barratts to deliver our MC strategy has been immense. Through the six month period of development, through every single project that we’ve progressed including Reserve & Collect, Bazaarvoice product reviews, from the technical expertise, to project management, through to expert analysts their development and expertise has been paramount.”
Ken Platt, Head of eCommerce and Customer Services

Since we launched the new eCommerce infrastructure and websites, we’ve helped Barratts Priceless trade the websites and grow their revenues online. In fact Barratts.co.uk have been shortlisted as finalists for the Drapers Footwear Etailer of the Year Award 2010.

We’ve also helped them introduce new channels to their customers for instance their iPhone strategy and mobile strategy generally.

Here are links to more eCommerce customer stories, where SAFE™ has been implemented:

Press Release: Hawkshead, Craghoppers and Dare2b brands gain online advantage
Press Release: Kiddicare aims to triple online sales with SAFE™
Press Release: Scotts & Co. seeks new markets and growth opportunities with SAFE™

The Social Graph

I recently wrote about Facebook’s ‘Universal like Button’, but Mitchell Harper (co-founder of BigCommerce a provider of shopping cart software) has also written a nice post on Mashable.com which discusses Facebook’s .api based way of accessing what Facebook calls a user’s “Open Graph” ; the list of everything he or she has “liked” across the entire web.

In the post, Mitchell outlines the impact of the Open Graph for eCommerce.  These are his 5 predictions:

Go here to read more from Mitchell.  I’ll need to think about his predictions more.  But I’d like to make some observations:

1. With such a key element of an eCommerce website being developed to leverage Facebook’s Open Graph .api  and their information [i.e. product browse and product Information pages] will the .api uptime be good enough for leading merchants and professional eCommerce solution builders? With these pages being highly optimised for conversion, merchants won’t want to lose credibility (and customers) at such a vital stage of an online purchase by displaying broken links, images and missing content.
2. For this to ‘tip’ into the mainstream, will Facebook be able to satisfy those engaged in the privacy debate? Remember Beacon?  There is a massive difference in privacy ‘politics’ across different geographies and will Facebook be able to develop a flexible enough .api to satisfy the differing cultures and styles of eCommerce globally? I can’t help but think that the ‘opt-in’ vs. ‘opt-out’ issues will be infinitely more poignant when the outcome is information shared on 3rd party eCommerce sites.

Should these issues be negated, there is little doubt that those merchants that have been involved in delivering a Facebook presence for some time are in line to benefit first.  They will have established fan groups who are most likely to share their Open Graph.

And in terms of a single ‘big win’ in social-commerce, Facebook’s Open Graph appears to be an initiative worth analysing and assessing.  Just how quickly benefits or drawbacks manifest remains to be seen.  Yet somehow I can’t see too many leading merchants simply ‘waiting to see what happens’.  Facebook’s platform and reach is simply too powerful to ignore.

“Facebook Open Graph” image taken from “Facebook Cookbook, Building Applications to Grow Your Facebook Empire.” http://www.oreilly.de/catalog/9780596518172/toc.html

HTML5 is receiving a lot of attention.

According to the gospel according to wikipedia, “HTML5 is being developed as the next major revision of HTML“, and “HTML5 is the proposed next standard for HTML 4.01, XHTML 1.0 and DOM Level 2 HTML“.  For the layman among us, it aims to “reduce the need for proprietary plug-in-based rich internet application (RIA) technologies such as Adobe Flash, Microsoft Silverlight, and Sun JavaFX”.

But what does HTML5 offer specifically in the context of eCommerce development? To find out I canvassed some members of our Front End Team to see what they had to say on the subject.

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TONY: “Due to the nature of user agent development, we may never be able to exploit all the features of HTML5/CSS3 in the near future, but its introduction is a welcome breath of fresh air. HTML5 can allow sites to be enhanced with non-propriety video and video controls. It also has the ability to access a client side database for larger and faster data storage, along with Web Workers that are used to allocate separate threads for process intensive work. The ability to build complex and fast applications in browsers (and other user agents) becomes a possibility. HTML5 addresses accessibility through use of the ARIA attributes, and it allows for a neater solution for generating complex and changeable layouts through the use of CSS3, columns and styling with rounded corners or gradients. Then of course there is Canvas, font support, native slider controls. These are just a few of the features that will influence eCommerce development.”

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STEVE: “Video commerce platform provider Liveclicker has released the industry’s first HTML5 player supporting interactive video commerce. The player is already live on Onlineshoes.tv for Chrome, Safari, and iPhone users. Some of the key HTML  features these guys have been playing with are:

• Interactive text overlays in-video (which is supported)
• Integrated back-end reporting including conversion tracking and optimisation tools
• Product data feeds (from retailers for example) which allows in-video merchandising of products, descriptions, pricing
• Sharing of video / ‘Related’ video functionality
• Fallback to Flash for non-supporting browsers”

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DANYAL: “With HTML 5 comes a standard way to embed a font into a website.  Developers have long struggled to find a way to provide exotic typeface to browsers, resorting to techniques such as image replacement and, less commonly, methods which depend on Flash, such as sIFR.  Each of those techniques has its own side effects, ranging from semantic damage to the page, to an increased dependence on third-party technologies.  HTML 5 will make it trivial for eCommerce companies to maintain brand fidelity by using the same fonts that are used in other contexts.”

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LAWRENCE: “One of the biggest and best new features in HTML5 is the way that it handles video.  For years now Adobe have had the thick end of the market share when it comes to online videos and ‘monitor motion’ capabilities. Their product ‘Flash’ has left a lasting impression on most of us, often for different reasons and is supported by most browsers, although it is a serious resource hog and uses lots of CPU time and battery power.

Flash is not supported on the iPhone or the iPad, which considering the popularity of these two products could be a problem if you are developing towards them.  HTML5 is what Apple are relying on to bridge the Flash gap. In a recent article in The Economist, Apple are quoted as saying: “The attraction of HTML5 is that it is designed to  handle audio and video internally, without the need for browser plug-ins such as Adobe’s Flash.””

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BRIAN: “Rich media such as product videos will be easier to display on product detail pages in HTML5 with the introduction of the <video> tag (open format video). This moves away from relying on Adobe Flash Player (which in turn is good for cross browser compatibility). It has not yet been decided exactly which video formats will be used, but moving away from relying on flash has to be a good thing and should mean quicker page load times as well as  the obvious accessibility wins.  The new <form> features in HTML 5 will mean the checkout/delivery process will have to rely less on JavaScript, in particular for form validation. Validation like ‘required’ fields are now done by setting an extra attribute on the input in the HTML such as <input required=”required”> therefore graceful degradation is not as much of an issue. This will remove JS code overheads and improve accessibility on checkout.”

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ANTHONY: “Geolocation, while initially intimidating in a “Big Brother” sort of way, is an interesting prospect for eCommerce on mobile devices. Just imagine being told that the product you are looking for is in stock at a nearby store before pressing the “Add to Basket” button and without entering your postcode! A great way to get people into your stores and seeing what else you have to offer.”

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RACHEL: “The application of the new features in HTML5 in an eCommerce environment could be limited due to the nature of standards support across browsers and the reliance and knowledge of Flash and Silverlight to achieve the same things. The main features of Video support, improved Drag and drop and offline storage could however make for a more immersive user experience. Video reviews would be dependent on the internet provision of users, but with encoding getting better these could become commonplace in the eCommerce market. Drag and drop along with HTML5 Canvas may be able to match Flash for basket functionality and Offline storage (replacing cookies) of previous purchases, un-purchased baskets or favourite items would speed up not only the experience for the user but reduce the database calls on a server.”

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