IBM, Vignette in E-Commerce Alliance

IBM (NYSE: IBM) announced Thursday it has formed a strategic alliance with e-business software and service provider Vignette Corp. (Nasdaq: VIGN) in an effort to meet growing e-marketplace demands in the dot-com, retail and financial sectors.

Specifically, the companies intend to provide e-business solutions that will foster market share, minimize deployment times and generate the infrastructure needed at each stage of development.

The firms are looking to expand their union into other industries in the coming months.

V/5, Meet WebSphere

The alliance blends Vignette’s V/5 E-Business applications, which offer a framework for rapid assembly and deployment of component electronic commerce applications, with IBM’s WebSphere platform, which supports e-businesses of all sizes. The multiyear agreement includes joint marketing services.

IBM and Vignette’s alliance has already attracted such clients as PaineWebber, New York Life, LexMark and Sweden-based Vitea AB.

“PaineWebber’s clients have strongly embraced our online services, and we have selected Vignette’s e-business software and IBM’s WebSphere application server to help us provide them with a more personalized and high-performance online experience,” said Phillip K. Ksu, corporate vice president and manager of online personalization initiatives for PaineWebber’s Private Client Group.

Hoping To Please Everybody

Customer service is a priority of IBM and Vignette’s combined effort. The companies believe they can foster relationships with customers new and old, ease high-volume transaction exchanges with suppliers and partners on the Web, and ultimately enhance customer satisfaction.

IBM shares were trading down 1 1/2 at 112 3/4 in trading this morning. Vignette was up 2 9/16 to 37 11/16.

As often happens in the New Economy, this alliance unites a venerable company with a relative newcomer. IBM was incorporated in the state of New York in 1911 as the Computing-Tabulating-Recording Company, while Vignette Corporation was founded in 1995 in Austin, Texas.

Vignette developed as a provider of content management and personalization solutions with Vignette StoryServer before unveiling the new V/5 E-Business Platform.

Funding Has Been Strong

As a private company, Vignette received $36.1 million (US$) in funding, which was the largest venture investment in an Austin-based software company at the time. Investors include Austin Ventures, Sigma Partners, Amerindo, Adobe Ventures LP, Charles River Ventures, Attractor Investment Management, Morgan Stanley Dean Witter, Hambrecht & Quist, CNET: The Computer Network, JGE Capital Management, Olympus Partners, Partech International, and Goldman Sachs Private Investment Funds.

This growth and funding helped make Vignette’s Initial Public Offering (IPO) in February 1999 the sixth-most successful IPO of that year. The company also posted a highly successful secondary offering in December that raised $350 million.

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