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This brings us to the fact that the market for such products is intensely competitive, subject to rapid technological change, and significantly affected by new product introductions and the market activities of other industry participants. There are relatively few barriers to entry in the Internet-based software market, and one should expect competition to persist and intensify in the future. Sterling Commerce currently has four possible sources of competition: 1) the in-house development teams of its potential clients; 2) large SCM, CRM and ERP vendors; 3) infrastructure and platform providers; and 4) various niche ISVs. Given its recent expansion into selling and fulfillment, the vendor's competition has intensified, and now comes from many directions, as indicated in the non-inclusive table below:

Despite vast resources, Sterling Commerce might not be able to maintain its competitive position in the long term against current and potential competitors, especially against those with significantly broader product lines or greater financial, marketing, service, support, technical, and other resources. Many of these competitors have longer operating histories in related markets; greater financial, technical, marketing, and other resources; greater name recognition; and a larger installed base of customers in related markets. Moreover, a number of competitors, particularly major business software companies (including those known for their ERP, database, CRM, and other pertinent software), have well-established relationships with Sterling Commerce's current and potential customers, as well as with independent system consultants and other vendors and service providers likely to influence the product selection processes of some customers. At least, such vendors and service providers can always detract or slow down the decision process.

Further, despite its impressively broad product portfolio, Sterling Commerce will either have to plug some functional holes via acquisitions, or simply bolster the footprint via internal development and partnerships. For instance, it could further deepen its focus on the retail sector by supporting a number of the US Environmental Protection Agency (EPA) and Food and Drug Administration (FDA) regulatory compliances, such as FDA 21, CFR Part 11 (on electronic records and signatures), which would be a springboard for other vertical initiatives. Also, one can imagine the vendor encroaching into the realms of multi-echelon inventory planning and optimization (see Inventory Planning and Optimization: Extending Your ERP System); field service workforce routing and scheduling; partner incentives and compensation management (see Enter Enterprise Incentive Management and Incentive Compensation Management); pricing management and optimization (see Advancing the Art of Pricing with Science); etc.

Other acquisitions in the supply chain space are possible as Sterling pursues an ongoing build-versus-buy analysis in support of expanding its multi-enterprise selling and fulfillment services. Namely, there are so many other points within a global supply chain where things can go wrong and unplanned, and someone would need an astute supply chain event management (SCEM) system, (see Confronting Core Global Trade Problems: Order, Shipment, and Financial Settlement). For instance, delays and unplanned events often take place at customs or at borders, in the exporter/importer bank, or in transit, especially when the goods change hands between waterway and road or rail transportation carriers. Therefore, to expand its opportunity, other collaborative SCM areas that Sterling Commerce might want to better address in the future (possibly through a strategic alliance, if it is too much of an effort to develop them in-house) are strategic sourcing and collaborative product lifecycle management (PLM, see Distinctions and Benefits of Strategic Sourcing); cooperative marketing within trading partners; coordinated field and external services; international trade logistics (ITL)/global trade management (GTM); and accompanying documentation; payment adjudication (see Dealing with Global Trade Management Complexity); etc.

Thus, Sterling Commerce will have to continue to make investments in or acquire complementary businesses, technologies, services, and products (or enter into relationships with parties that can provide access to those assets, if appropriate opportunities arise). These will have to be balanced against its functional footprint becoming indisputably large and unclear, and from involving insurmountable integration work. However, in almost any acquisition, there can be difficulty in integrating the acquired products, services, or technologies into its operations and these difficulties can disrupt ongoing business, distract management and employees, and increase expenses. Furthermore, integration of such acquisitions may result in a significant use of capital, which, at least in Sterling Commerce's case, can certainly be better absorbed by a larger parent company.