IBM Strikes Biz-to-Biz Deal with i2, Ariba

BOSTON (03/08/2000) - IBM Corp., i2 Technologies Inc. and Ariba Inc. today announced a broad alliance that will include integration of some of their business-to-business technology, joint marketing and sales, and an equity investment from IBM in both e-commerce companies.

IBM will integrate i2's TradeMatrix marketplace software and the Ariba B2B (business to business) e-commerce platform with its own software, including WebSphere, WebSphere Commerce Suite, DB2 and MQSeries, according to William Etherington, senior vice president and group executive for IBM sales and distribution.

The resulting business-to-business offering will be used to serve the customers of IBM's US$45 billion e-procurement business, Etherington said. A version of the offering will also be available to outside customers through IBM, i2 and Ariba channels, and IBM's 138,000-strong Global Services work force will field a team that specializes in the offering, he said.

The business-to-business offering will not exclusively consist of technology from the three companies.

"It is an open offering, open to other software providers, in the ERP space, for example," Etherington said. "We believe that is fundamental."

On the financial side, the companies said that IBM's investments in i2 and Ariba will be minority equity investments. They declined to disclose the precise financial terms of the arrangement.

One analyst praised the alliance as immediately delivering "one-stop shopping" for customers, but said that down the road, the key value to customers will be in how tightly the companies integrate the technologies.

Because of today's deal, market makers and customers who want to build private exchanges can get access to needed e-commerce technology from IBM, i2 and Ariba with a single phone call, noted Tom Harwick, research director, supply chain management at Giga Information Group Inc. in Cambridge, Massachusetts. However, making the separate products work together is still a challenge and, depending on the companies' investment, that may still be a challenge 18 months from now, Harwick said.

"What will be interesting is (how much) the three companies actually invest" in the integration, he said.

IBM, in Armonk, New York, can be reached at +1-914-765-1900 or http://www.ibm.com/. Ariba, in Mountain View, California, is at http://www.ariba.com. I2 is based in Irving, Texas, and can be reached at http://www.i2.com/.