CWS 3.0: December 21, 2011 - Vol. 3.37

Print

News: IBM to Buy VMS Provider Emptoris

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.

History
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.

Comments

Add New Comment

Post comment

NOTE: Links will not be clickable.
Security text:*

Managing Partner

Ken Schuster 10/01/2012 1:09 pm

This, as noted, is just an advanced step in the IBM BPO world. While many in staffing are NOW concerned they are also way behind with what IBM has and is doing. IBM has been in the "staff aug" business since at least 2009-10 and is expanding this business.

From our note to staffing leaders in May 2011..."They are known as IBM Staff Augmentation Services and come under the IBM Business Services unit.

http://www-935.ibm.com/services/us/en/business-services/staff-augmentation-services.html

http://www-03.ibm.com/services/ca/en/virtualbench.html

Now we have learned where IBM is again providing staff aug services but this time it is in the security and threat mitigation area

http://www-935.ibm.com/services/us/en/it-services/staff-augmentation-services.html

Are you ready to compete with IBM or would you rather service them and share in their profit?"

It would be well for the staffing industry to also understand that what IBM does will soon be followed by a number of the larger IBM Business Partners. Many of the larger BP's now have "Professional Services" units that supply their own needs as well as compete with the NTS Core suppliers and deliver staffing (All Levels) to end clients. One Florida based BP's that we have worked with now bills IBM direct for over $28M in staffing services (and they do not show up on SIA surveys or membership).


Tom Tisdale 10/01/2012 8:31 am

The acquistion of Emptoris for IBM is far greater then a VMS acquistion. It makes good sense for IBM such that they can have a platform to bundle procurement services and analytics and procurement outsourcing. It will be interesting to see if they get any "VMS" traction out of this - that is new labless.


Total 2 comments