IBM To Acquire Software Firm Apptio For $4.6 Billion To Bolster Cloud Offering

Washington-based Apptio will be acquired with available cash on hand, IBM said

The deal marks the latest move by IBM as the century-old IT technology major reorients itself to focus on newer AI and Cloud-based offerings. ( Image Source :Getty )

IBM, the US-based technology giant, on Monday announced that it has entered into a definitive agreement with Vista Equity Partners to acquire Apptio for $4.6 billion, according to Reuters. Washington-based Apptio provides financial and operational IT management and optimisation software. The deal marks the latest move by IBM as the century-old IT technology major reorients itself to focus on newer AI and Cloud-based offerings.

According to the report, the acquisition is aimed at bolstering IBM's IT automation capabilities. Along with the tech giant’s IT automation software and its Watsonx AI platform, Apptio will be able to help businesses optimise their IT spending, and derive tangible financial value and operational improvement.

The company will be acquired with available cash on hand, IBM said. "The transaction is subject to regulatory approvals and other customary closing conditions and is expected to close in the latter half of 2023,” it added.

Arvind Krishna, CEO and chairman, IBM said, "Technology is changing businesses at a rate and pace we've never seen before. To capitalis on these changes, it is essential to optimise investments, which drive better business value, and Apptio does just that," while adding, "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 was listed on NASDAQ in 2016, before getting delisted and acquired by Vista Equity Partner in 2019 for $1.94 billion. The firm was founded in 2007 by Sunny Gupta and Kurt Shintaffer. It is a profitable tech business management solution, with over 1,500 clients, serving more than half of the Fortune 100 companies. Apart from its IT spend optimisation capabilities, it will bring to IBM $450 billion of anonymised IT spend data, unlocking new insights for clients and partners.

Gupta, co-founder and CEO of Apptio said, "We are 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." This deal will follow IBM's 2021 purchase of software provider Turbonomic for over $1.5 billion and its 2019 acquisition of software company Red Hat for $34 billion.