5 Things To Know About IBM's Sale Of Marketing And E-Commerce Assets

IBM Bows Out Of Marketing And Commerce Biz

IBM was once a leading force in offering enterprise software to facilitate the client engagement experience, fielding a broad portfolio of e-commerce and marketing automation solutions.

But with a deal earlier this week to sell IBM Marketing Platform and some other commerce assets to private equity firm Centerbridge Partners, IBM has now fully walked away from those businesses.

That should come as no surprise to partners, as IBM has been shifting its business to focus on core technology priorities, said Darrin Nelson, vice president at Sirius Computer Solutions, IBM's largest channel partner.

Sirius had been anticipating the divestiture in those areas, Nelson said, though the company wasn't sure what that would look like.

Now the deal with Centerbridge, and an earlier sale of assets to HCL Technologies, "essentially punctuate an end of an IBM era," Nelson told CRN.

Focus on Core Technology

IBM's overarching strategy is to focus on high-value segments of the IT industry. That involves delivering an integrated set of products, especially around emerging technologies like AI, blockchain, cloud and supply chain.

"The marketing and commerce assets are no longer core to this integrated model," IBM Vice President for Communications Ed Barbini told CRN.

Marketing automation tools are increasingly sold as stand-alone products, Barbini noted.

While IBM had a leadership role in the client experience and transactional commerce space for many years, that market changed, said Darrin Nelson, vice president of software sales at Sirius Computer Solutions, a large IBM reseller.

For starters, e-commerce engines became so large, customized, complex and integrated with operational systems, enterprise demand for new transactional platforms declined, he said.

At the same time, IBM failed to keep pace with innovators in that market, like Adobe Systems, Nelson added.

"These platforms have run their course for IBM and I suspect they will be focusing their resources on hotter spots in the market such as data; security, where they have solid solutions; and potentially cloud, especially if they execute well with the Red Hat acquisition," Nelson told CRN.

Another Deal

Once the Centerbridge deal closes later this year, IBM will have fully divested from what was once a broad portfolio of marketing and e-commerce solutions.

That process started in December, when Big Blue sold IBM WebSphere Commerce, its flagship e-commerce platform, along with other automated marketing and security solutions under its tent to HCL Technologies for $1.8 billion.

That deal with India-based HCL also included IBM Unica, cloud-based enterprise marketing automation software; IBM WebSphere Commerce, an omni-channel commerce platform for B2C and B2B organizations; and IBM WebSphere Portal, a platform for developing enterprise web portals to help businesses deliver highly personalized social experiences to clients.

New Company

The company that will emerge from the IBM-Centerbridge deal is still unnamed, but it will be headquartered in New York City and deliver solutions focused on automating the work of marketing and advertising executives.

The product portfolio will include marketing automation tools, customer experience analytics, personalized search and an AI-powered content management system. The new company will continue to invest in developing artificial intelligence capabilities and privacy-protection tools, Centerbridge said.

"We believe Centerbridge is well positioned to advance these assets in the marketplace," IBM Vice President Ed Barbini told CRN.

Mark Simpson, who currently helms the IBM division responsible for those products, has been selected as CEO.


Mark Simpson, who will lead the new venture that will bring formerly IBM marketing and commerce automation solutions to market, founded Maxymiser, a developer of cloud-based marketing software that Oracle acquired in 2015.

Simpson worked a year at Oracle before joining IBM as a vice president in the Watson Commerce and Marketing group.

Other IBM executives will join Simpson in the still-unnamed new company's New York City office.

Channel Impact

In a prepared statement, Centerbridge Senior Managing Director Jared Hendricks said the new company spun off with IBM software assets will "look forward to working" with IBM's current business partners.

The private equity firm has yet to provide more information about how it will engage IBM resellers that have built businesses around those products.

Sirius Computer Solutions, a leader in IBM's channel, has seen a decline in sales of IBM's commerce and marketing platforms over the last five years, said the solution provider's vice president of software sales, Darrin Nelson.

But Sirius "continued to enjoy strong services performance in those spaces, supporting clients that had made those IBM platform commitments," Nelson said.