IBM to boost AI platform with $4.6bn Apptio acquisition
Big Blue is snapping up the hybrid cloud group to drive “significant synergies” across automation, Red Hat, its AI portfolio and IBM Consulting
IBM is forking out a whopping $4.6bn to acquire hybrid cloud and FinOps software standout Apptio in a move to boost its Watson and Red Hat offerings and automation capabilities.
Apptio sells software-as-a-service (SaaS) applications with over 1,500 customers, including more than half of the Fortune 100 companies, along with owning solid integration partnerships with the likes of AWS, Microsoft Azure and Google Cloud.
CEO Arvind Krishna said IBM plans to combine Apptio's FinOps [financial and operational IT management and optimisation] software with its Watsonx AI platform and automation software.
"Apptio's offerings, combined with IBM's IT automation software and Watsonx AI platform, gives clients the most comprehensive approach to optimise and manage all of their technology investments," said Krishna.
"Technology is changing business at a rate and pace we've never seen before. To capitalise on these changes, it is essential to optimise investments which drive better business value, and Apptio does just that."
IBM said the acquisition of Apptio is expected to drive "significant synergies" across several key areas for IBM including automation, Red Hat, IBM's AI portfolio and IBM Consulting, as well as strong partnerships with systems integrators like Accenture, KPMG and Deloitte.
The all-cash acquisition is expected to close in the second half of 2023. IBM is buying Apptio from private equity firm Vista Equity Partners.
IBM's cloud plan for Apptio
Apptio solutions integrate and simplify visibility into technology spending across hybrid and multi-cloud environments, labor and resources. The Washington-based software company will bring to IBM $450bn of anonymised IT spend data that will unlock new insights for clients and partners.
As more customers move to a hybrid cloud business model, IBM plans to help clients with Apptio solutions to manage the complexity of cloud environments.
"Our customers are evolving to a complex digital-first, hybrid world where technology investments are distributed and decentralised, but all innovation must be aligned with clear business outcomes," said Apptio CEO Sunny Gupta.
"We are so excited to be joining IBM and combining our industry leading offerings with IBM's global presence and strong portfolio across AIOps, automation and hybrid cloud offerings."
The overall goal for IBM is to accelerate the advancement of its IT automation capabilities with the purchase of Apptio boosting the company's ability to derive tangible financial value and operational improvement for enterprise customers.
Apptio's special sauce
Apptio partners and integrates with the world's largest cloud providers including AWS, Google Cloud Platform, Microsoft Azure, Salesforce, ServiceNow, Oracle and SAP. This goes hand-in-hand with IBM's commitment to have an open partner ecosystem when it comes to cloud computing.
Looking specifically at Apptio's technology, the company empowers leaders to manage technology spend and direct their investments to cloud innovation and digital transformation. The company's three core SaaS offerings are ApptioOne, Apptio Cloudability, and Apptio Targetprocess.
Apptio, combined with IBM's IT automation software like Turbonomic, Instana and AIOps, will give clients a 360-degree technology business management platform, aimed at providing a "virtual command center" for spend management and optimisation stretching across their entire technology landscape, IBM said.