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IBM Dives Deeper Into Hybrid Cloud Services with $4.6B Apptio Acquisition

Making a significant stride towards hybrid cloud technology, IBM acquires Apptio for $4.6 billion. Apptio's sophisticated platform for managing data across hybrid environments will strengthen IBM's IT automation software and AI platform.

IBM acquired Apptio

As cloud architectures become an integral part of organizations, the trend is shifting towards hybrid models. Recognizing this, IBM has ramped up its focus on hybrid solutions with the acquisition of Apptio, a platform that tracks data across hybrid environments, for $4.6 billion.

This acquisition aims to blend Apptio with IBM's IT automation software and AI platform, providing businesses with an integrated solution to manage and optimize expenditure within their IT infrastructures.

Currently under the ownership of Vista Equity Partners, Apptio went private in 2018 after a buyout of $1.94 billion. Expected to close in the second half of 2023, the IBM-Apptio deal seems to be a fitting piece of IBM's modernization puzzle.

Being an old player in the tech industry, IBM or 'Big Blue', is consistently striving to integrate more contemporary products and services into its portfolio. The acquisition of Apptio bolsters IBM's services and system integrations, providing better tools to address today's business concerns about modernization.

The transition to cloud-based systems and services brings along several questions about long-term cost benefits and budget management. Apptio, with its solutions, offers to navigate this landscape effectively. "Technology is changing business at an unprecedented rate. To capitalize on these changes, optimizing investments is essential, and Apptio does just that," said Arvind Krishna, CEO and Chairman, IBM.

Apptio's offerings cater to various aspects of 'FinOps' - the financial and operational IT management and optimization. These offerings include ApptioOne for managing spend in hybrid cloud environments, Apptio Cloudability for public cloud deployments, and Apptio TargetProcess for project management.

In addition to its cutting-edge products, Apptio brings a large customer base to IBM, including more than half of the Fortune 100 companies. With existing partnerships with tech giants such as Amazon Web Services, Microsoft Azure, Google Cloud Platform, Salesforce, ServiceNow, Oracle, and SAP, Apptio's addition to IBM will provide opportunities for upselling services.

As part of this deal, two key trends emerge. Firstly, it emphasizes the ongoing consolidation in the cloud deployment management services, where Apptio has itself grown through acquisitions. Secondly, it shines a light on the Private Equity landscape, with Vista possibly leveraging the funds from this deal to make further acquisitions at a time when other funding routes are tightening.