IBM paying $4.6B in cash for tech software firm Apptio in CEO’s latest tech deal

RESEARCH TRIANGLE PARK – IBM is making a big play in the financial and operation IT management (otherwise known as FinOps), announcing Monday it would acquire Apptio in an all-cash deal worth $4.6 billion.

Apptio is owned by Vista Equity Partners. It’s based in Bellevue, Wash. and has some 1,700 employees with annual revenues of around $200 million.

IBM typically doesn’t disclose prices paid for acquisitions. It’s biggest was the $34 billion in paid for Raleigh-based Red Hat in 2019.

The deal, to be paid for with “cash on hand,” IBM says, is the latest in a surge of acquisitions – more than 30 – led by Chair and CEO Arvind Krishna, who took over the tech giant’s CEO post in April 2020. But it didn’t trigger immediate enthusiasm on Wall Street. IBM (NYSE: IBM) shares were down slightly in pre-market trading Monday.

“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,” said Krishna in a statement. “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.”

IBM has invested heavily in artificial intelligence as well as IT automation and cloud computing, and this deal augments that strategy, IBM says.

A blend of IBM and Apptio services ‘will give clients a 360-degree technology business management platform, providing a ‘virtual command center’ for spend management and optimization stretching across their entire technology landscape,” the tech giant adds.

Apptio brings to IBM a “profitable” operation with more than 1,500 clients, including “more than half” of the Fortune 100, IBM notes.

Its product offerings include:

• ApptioOne: Hybrid cloud spend management and optimization capabilities to analyze, optimize and plan IT spend and value. ApptioOne is used to establish repeatable and accurate planning and financial management processes, delivering actionable insights around cost and utilization, while benchmarking against industry peers for continuous optimization.
• Apptio Cloudability: Public cloud spend management visibility and optimization capabilities, connecting multi-cloud and SaaS infrastructure with cloud financial management best practices to maximize the value of clients’ cloud strategy.
• Apptio Targetprocess: Agile investment planning capabilities to align development resources to business outcomes, plan and track value delivery for projects or products.

“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, 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 deal is expected to close later this year.

IBM owns Red Hat, operates a large corporate campus in RTP, and employs thousands of people across North Carolina.

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