IBM said the acquisition of Apptio is a ‘continuation of [its] deep focus and investment in hybrid cloud and AI’
IBM this week announced plans to purchase Apptio, a financial and operational IT management and optimization (FinOps) software company, for $4.6 billion. According to IBM, the acquisition will accelerate its IT automation capabilities, enabling its enterprise customers to realize further business value as IT environments continue to expand across public and private clouds and in partnership with multiple service providers.
“To manage this dramatic increase in complexity, clients are turning to Apptio’s solutions for integrated and simplified visibility into technology spend across hybrid and multi-cloud environments, labor and associated resources,” said IBM in a press release. “Apptio, together with IBM’s IT automation software and it’s watsonx AI platform, will help businesses around the world manage and optimize enterprise IT spend and derive tangible financial value and operational improvement.”
IBM has positioned the acquisition of Apptio as a “continuation of [the company’s] deep focus and investment in hybrid cloud and AI,” and will allow IBM to collaborate across several of its key growth areas including automation, Red Hat, IBM’s broader AI portfolio and IBM Consulting.
Earlier this month, IBM Consulting SVP John Granger explained at the recent JP Morgan Global Technology, Media and Communications Conference that for enterprises looking to add generative AI to their technology strategy in an effort to deliver a specific business outcome, IBM is “placing its emphasis” on smaller models that “are much more curated.”
Granger added that IBM’s CEO Arvind Krishna identified AI as a critical area three years ago. In the company’s consulting business, he said 21,000 of the 160,000 consultant work in the AI and data space, and IBM Consulting has done “40,000-odd” engagements in this area. About this week’s news, Krishna said: “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. 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.”
Apptio has three software as a service (SaaS) core offerings: ApptioOne for hybrid cloud spend management and optimization capabilities; Apptio Cloudability for public cloud spend management visibility and optimization capabilities; and Apptio TargetProcess, which provides agile investment planning capabilities for business outcomes and the delivery of projects or products. The companies claim that when combined with IBM’s IT automation software like Turbonomic, Instana and AIOps, these assets will give enterprise customers a “360-degree technology business management platform… for spend management and optimization stretching across their entire technology landscape.”
In addition to its SaaS offerings, Apptio will bring to IBM $450 billion of anonymized IT spend data.
“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,” explained Sunny Gupta, Apptio co-founder and CEO. “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 transaction is subject to regulatory approvals and other customary closing conditions and is expected to close in the latter half of 2023.
