IBM plans to integrate Apptio with its existing IT automation software and AI platform to offer businesses solutions for managing and optimizing IT spending. It is becoming more and more obvious that many organizations are adopting a hybrid approach, combining SaaS in private and public clouds with some products that remain on-premises, as cloud architecture continues to become more pervasive among organizations.

By spending $4.6 billion in cash to acquire Apptio, which has developed a platform to track how and where data lives in hybrid environments and how it is used, particularly how that adds up in terms of financial and resource costs, IBM today made a significant acquisition that doubles down on the hybrid concept.

Strategy Behind the Decision

According to IBM, the strategy is for Apptio to coexist with the company’s current IT automation software and AI platform in order to create and market business solutions for managing and optimizing IT spending. Currently, Vista Equity Partners, a PE firm, owns Apptio after paying $1.94 billion to take it private in 2018. This transaction shouldn’t come as a huge surprise because it was previously reported to be in the works over the weekend.

According to IBM’s release, subject to regulatory and other approvals, the transaction is anticipated to close in the second half of 2023. For IBM, the acquisition makes a lot of sense.

One of the oldest and most established tech companies, “Big Blue” has been implementing a long-term strategy to include more contemporary goods and services. Apptio is a definite step up for the company’s services and systems integration businesses, offering it a far better set of tools to concentrate on one of the most important issues facing contemporary enterprises.

IBM CCO on Buying Apptio for $4.6 Billion

Higher Business Value

Organizations may be eager to migrate to more modern systems and services, frequently cloud-based, that are more secure, efficient, and extensible, but this also raises more serious concerns about the long-term costs and benefits, and in particular how those migrations affect the bottom line.

SaaS costs are variable, which may be both a blessing and a problem in terms of controlling how budgets are planned and spent. “Business is evolving at a velocity and pace that we have never seen before because to technology. Arvind Krishna, CEO and chairman of IBM, said in a statement: “To take advantage of these shifts, it is critical to optimize investments that produce higher business value, and Apptio offers just that. The most comprehensive solution to managing all of a client’s IT investments is provided by Apptio’s services in combination with IBM’s IT automation software and the Watsonx AI platform.”