When Bob Irwin took over as president and CEO of Sterling Commerce at the end of 2006 following the sudden, unexpected death of his predecessor, Samuel Starr, the company was perhaps best known for its IT infrastructure products, such as value-added network and secure file transfer offerings. While the AT&T subsidiary had begun to invest in supply chain, warehouse management, order management, and electronic commerce products, its applications — many obtained through acquisitions — were, for the most part, positioned as unintegrated, best-of-breed, point products. Eight months later, under Irwin's direction, Sterling has begun to change all that. At its recent annual Customer Connection user conference in Denver, the company said it has refashioned its disparate applications into an integrated suite that addresses the bulk of manufacturers' inquiry-to-cash selling and fulfillment processes. Irwin, in an interview with Managing Automation, also described the company's plans to replace its traditional horizontal marketing approach with one that concentrates on vertical industries — including manufacturing — and to augment Sterling's line of applications, possibly through additional acquisitions. It's all part of a plan, Sterling officials say, to transform the company into a growth-oriented provider of software suites that can compete head-to-head with larger vendors, such as SAP AG and Oracle Corp. While Sterling will continue to offer multiple product lines, including value-added networks, and file transfer and integration tools, the company's greatest growth opportunity will come from its recently released Selling and Fulfillment Suite, particularly the portion that focuses on the marketing, lead management, and e-commerce processes, Irwin says. Irwin's efforts to reshape Sterling seem to be paying off. In his keynote speech in Denver, Irwin told customers that the privately owned company has seen a 19% increase in revenue in the past year. Over the same period, Sterling has boosted its research and development spending by 21% and increased the number of software engineers on its payroll by 12%. The new Selling and Fulfillment Suite is the latest result of that R&D investment. The suite combines on top of a common services-oriented architecture supply chain management applications that Sterling obtained early last year through its acquisition of Yantra, transportation management applications that Sterling acquired in 2006 with Nistevo, and electronic commerce selling and marketing applications that the company added last year with its $155 million acquisition of Comergent Technologies Inc. The idea, Irwin says, is to allow Sterling to sell an integrated suite of applications covering an end-to-end business process to organizations that increasingly want to buy from fewer software vendors. "It also gives us an opportunity to present a single face to the customer rather than selling point products under different brands," he says. "It's a big shift for us." So far, some Sterling customers, while noting the shift, have yet to sign up for the full Selling and Fulfillment Suite. Consumer electronics retailing giant Best Buy, for example, is using Sterling's order management application as part of a major initiative to reengineer and unify its online and in-store selling and fulfillment processes, says Chap Achen, the company's director of order management and credit risk. Best Buy, however, is using online order creation software from Sterling competitor ATG Technology Group and inventory replenishment applications from Oracle's Retek unit. "Right now we're not integrating around the Sterling suite, although, long term, we may do so," Achen says. In the meantime, Sterling plans to extend the Selling and Fulfillment Suite in terms of both vertical industry focus and functionality. Like its larger competitors, Sterling must strive to develop among its employees rich vertical industry expertise into which customers, including manufacturers, can tap when deploying applications and reworking business processes, Irwin says. "We are going to differentiate based on a vertical industry orientation," Irwin says. "Today, much of our process knowledge is horizontal." In the next few weeks, Sterling will reorganize its marketing and sales groups around vertical industries. Irwin also plans to fill some gaps in the Selling and Fulfillment Suite. While the suite includes a transportation management module, for example, it lacks global trade management functionality, which is increasingly important to manufacturing companies sourcing and selling products outside the United States, Irwin notes. Sterling will seek to fill that gap most likely through acquisition rather than internal development, he says. "The acquisition route is obviously faster, and it gets you domain expertise," Irwin says. While the enterprise software market has been consolidating for several years now, there are still plenty of attractive takeover targets out there, Irwin says, without identifying companies on his list. "It's still very active without being out of control," Irwin says. "Prices aren't crazy. They're high, but not out of control." This article originally appeared in the October 2007 issue of Managing Automation.