IBM Agrees to Pay $5 Billion for Apptio Acquisition

Updated: 26 June 2023

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IBM has made an official announcement regarding its definitive agreement with Vista Equity Partners. The agreement entails the acquisition of Apptio Inc. for a total of $5 billion.

IBM Nears Deal Completion

IBM has decided to acquire Apptio for $5 billion. It will purchase the company from Vista Equity Partners Management LLC, which bought Apptio for $1.94 billion almost five years ago.

The parties are in advanced discussions regarding a potential purchase that may be completed by the weekend.

$IBM – IBM close to $5B deal for software provider Apptio: report https://t.co/15OiqeRYIX

— Beeken Technology (@beeken_tech) June 26, 2023

Established in 2007, Apptio specializes in providing cloud-based technology and hybrid business management software for managing businesses within the information technology industry.

IBM plans to integrate Apptio with its current IT automation software and AI platform. It also aims to collaborate and offer businesses comprehensive solutions for efficiently managing and optimizing their IT investments.

As reported by TechCrunch, Arvind Krishna, CEO and chairman of IBM, highlighted the pace of technological advancements that businesses face.

He emphasized the importance of optimizing investments to maximize business value, acknowledging Apptio as a leading expert in this domain.

Krishna acknowledged that combining Apptio’s offerings with IBM’s IT automation software and Watson AI platform provides clients with a comprehensive approach to optimizing and managing all their technology investments.

The acquisition brings significant advantages to IBM. It includes a substantial customer base of 1,500 enterprises, comprising over 50% of the Fortune 100 companies.

Additionally, it provides important existing integrations and partnerships necessary for operating in the enterprise cloud services sector, including Amazon Web Services, Microsoft Azure, Google Cloud Platform, Salesforce, ServiceNow, Oracle, and SAP.

Given the possibility of shared clients between IBM and Apptio, this acquisition will enable IBM to expand its offerings and provide additional services to these clients.

IBM Expands Its Reach

IBM is undergoing a strategic transformation to focus on hybrid cloud and artificial intelligence ventures.

In a significant move in 2019, the tech company acquired software provider Red Hat for approximately $35 billion, aiming to strengthen its cloud computing business.

IBM to buy Red Hat in $34B deal, pledges to keep Raleigh HQ https://t.co/k0wjV1IQlP @RedHat @IBM @IBMcloud @TriangleBIZJrnl pic.twitter.com/9QJ7BOSK7z

— Gregory Woloszczuk (@GWoloszczuk) October 31, 2018

Recent years have seen IBM divest or spin off various businesses, including Kyndryl Holdings, a major player in IT infrastructure and data center management.

In 2022, the firm completed the sale of its healthcare data and analytics assets associated with IBM Watson Health, highlighting the challenges faced by AI in the healthcare sector.

Additionally, reports suggest that IBM is exploring the sale of its weather operations, including The Weather Company’s B2B, mobile, and cloud-based businesses like Weather.com.

Weather scoop with ⁦@laurenthomas⁩: IBM is exploring a sale of its weather operation, including https://t.co/ulMGaz3wrL. The company could fetch more than $1 billion in a sale ☀️☔️🌨️ ⁦@WSJdeals⁩ https://t.co/6XjhrbYDwh

— Laura Cooper (@LCooperReports) April 12, 2023