The recession has changed customers’ buying patterns. No longer are companies quick to add to their headcount of personnel. A recent announcement by International Business Machines Corp. to buy Emptoris Inc., a contract management software company validates this trend. The acquisition is part of IBM’s “Smarter Commerce” initiative begun in March 2011.
“Procurement is being asked to show how it can deliver value to the organization,” said Craig Hayman, general manager of industry solutions at IBM. “Adding Emptoris strengthens the comprehensive capabilities we deliver and enables IBM to meet the specific needs of chief procurement officers.”
Emptoris’ products include a vendor management system for contingent labor. Terms of the transaction were not announced. Emptoris is presently owned by private equity firm Marlin Equity Partners.
The company’s VMS ranked as the third largest VMS in terms of SOW spend and as the largest in terms of outsourced service contract spend, according to the 2011 VMS and MSP Supplier Competitive Landscape report by Staffing Industry Analysts. Burlington, Mass.-based Emptoris has more than 350 customers using its products in 75 countries.
The acquisition is anticipated to close in the first quarter of 2012. “The acquisition of Emptoris by IBM will complement IBM’s overall BPO process strategy as Emptoris is a proven services procurement solution with a robust technology,” said Diana Gabriel, vice president, strategic solutions, at Staffing Industry Analysts.
Emptoris’ staffing VMS at one time was part of a firm called Click Commerce Inc., a portion of which was acquired by Emptoris in 2009. At the time, Click Commerce’s VMS ranked as the largest with $4.64 billion in spend, according to Staffing Industry Analysts. Emptoris had acquired the pieces of Click Commerce from Illinois Tool Works Inc.
In 2006, Click Commerce had paid $15 million in cash and stock for VMS technology from Elance Inc., a Mountain View, Calif.-based firm that now provides services for companies and individuals seeking to hire independent contractors online.