IBM Acquires Apptio for $4.6 Billion to Boost IT Automation

US-based tech giant IBM recently announced its plans to acquire Apptio, an IT management company.

The cash deal involved $4.6 billion from Vista Equity Partners. 

IBM aims to strengthen its IT automation, observation, and operations management offerings through this acquisition which is set to be finalized by the second half of 2023.

Capitalizing on the rising popularity of cloud and IT management platforms

Apptio is a Washington-based software company specializing in SaaS-based software solutions that help companies manage their IT spend and resources effectively.

With over 1400 employees, Apptio has more than 1800 clients across the globe, including 60% of Fortune 500 companies.

These products fit into IBM’s strategy of creating holistic solutions for enterprise IT management and hybrid cloud storage. 

IBM plans to add  Apptio to its existing set of enterprise management and observability solutions, such as IBM Tubronomic and IBM Instana. The long-term plan also includes integrating these solutions with IBM Watson, IBM’s AI solution. 

Growing demand for cloud management services

The last few years have seen aggressive investments in digital transformation and cloud computing. But managing the cloud is turning out harder than expected as companies struggle to get a handle on multiple vendors, billing cycles, and SaaS solutions. 

At the beginning of the year, we had predicted that cloud management and cloud cost management would be top priorities for companies.

This year, there seems to be a focus on optimizing cloud and IT environments as companies tighten their spending. Cloudflation, or the rising cost of cloud services, has increased the emphasis on cost management.

Traffic to G2’s Cloud Cost Management category has increased by 12%, and Enterprise IT Management increased by 19% in just six months. 

Investments in cloud management

IBM’s acquisition of Apptio is a significant move by the tech giant to cater to this growing demand for cloud management and observability solutions. We see other companies also investing in this space. 

In March 2023, Hewlett Packard Enterprises (HPE) announced its plan to acquire OpsRamp, a SaaS platform that provides enterprise IT management and cloud cost management solutions.

As the complexity of  IT infrastructure grows, IT management, cloud management, and monitoring solutions will be crucial to ensure companies can control their systems and derive the best from their investments.

Learn more about FinOps tools and how they help optimize your cloud expenses.

Edited by Jigmee Bhutia