E-commerce wars: IBM vs Oracle vs GSI

Oracle's $1 billion/15x profits (EBITA) takeover of Art Technology Group, at a price nearly 50% above Art Tech's recent trading value, is a tribute to the profits and growth of eCommerce sales for contract retailers, a business "dominated by GSI, Art Technology Group and IBM," reports Janney Capital Markets' Shawn Milne in a report to clients today.

Of the top 500 U.S. retailers, 43% use Art Tech; 31% use Michael Rubin's King of Prussia-based GSI Commerce; and 27% use IBM Websphere to fill online orders, Milne reports, citing a recent survey by Internet Retailer. "GSI has long-term deals" and keeps winning (or buying) new ones, he write, arguing the Oracle-Art Tech deal won't wreck GSI's business.

Oracle is a weaker competitor against King of Prussia-based GSI than, say, Google would have been if it had bought Art Tech, Milne adds: Google would have been more likely to take online retail sales out of host servcies into the "cloud" of networked computers, wiping out profits.