IBM Buying Apptio For $4.6B To Boost Watson, Red Hat, Hybrid Cloud Abilities
“Apptio’s offerings combined with IBM’s IT automation software and watsonx AI platform, gives clients the most comprehensive approach to optimize and manage all of their technology investments,” said IBM CEO Arvind Krishna.
IBM is spending a whopping $4.6 billion 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 optimization] 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 optimize and manage all of their technology investments,” said Krishna in a statement. “Technology is changing business at a rate and pace we’ve never seen before. To capitalize on these changes, it is essential to optimize investments which drive better business value, and Apptio does just that.”
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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 Bellevue, Wash.-based software company will bring to IBM $450 billion of anonymized 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 decentralized, but all innovation must be aligned with clear business outcomes,” said Apptio CEO Sunny Gupta in a statement. “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 committment 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.
ApptioOne establishes repeatable and accurate planning and financial management processes, delivering actionable insights around cost and utilization, while benchmarking against industry peers, according to IBM. Apptio Cloudability connects multi-cloud and SaaS infrastructure with cloud financial management best practices, while Apptio Targetprocess provides investing planning to align development resources to business outcomes.
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 optimization stretching across their entire technology landscape, IBM said.