IBM's $4.6B Apptio Purchase Places Bigger Stake in FinOps

IBM on Tuesday took a larger slice of the FinOps space with its $4.6 billion purchase of hybrid cloud and IT management software firm Apptio.

IBM says the acquisition will advance its IT automation capabilities and let enterprise leaders deliver more business value through accelerated digital transformation. Apptio offers software for management and visibility of technology spending across hybrid and multi-cloud environments, labor, and associated resources.

Daniel Newman, chief analyst at Futurum Research, tells InformationWeek that IBM's purchase fits with its strategy to enhance its hybrid cloud and AI focus. "Apptio provides IBM's global distribution channel with expanded tools to enable CFO/CIO to manage cloud and IT spend, while also dealing with challenging labor unit economics that revolve around complex digital transformation," he says.

Newman's assessment aligns with IBM's stated goals.

"Technology is changing business at a rate and pace we've never seen before," IBM Chairman and CEO Arvind Krishna said in a prepared 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 says its current FinOps offerings, including Turbonomic, Instanda and AIOps, combined with Apptio's ApptioOne, Cloudability, and Targetprocess, will provide a comprehensive FinOps resource for enterprise use. Apptio already partners with Amazon Web Services, Microsoft Azure, Google Cloud, Salesforce, ServiceNow, Oracle, and SAP.

Related:IBM Can't Acquire Its Way Into Tech's Top Ranks

"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," Sunny Gupta, Apptio co-founder and CEO, said in a press release.

Part of a Larger Cloud Strategy

IBM has been spinning off and divesting other lines of business, including Kyndryl Holdings Inc. and Watson Health, while shifting resources to hybrid cloud and artificial intelligence. The company acquired software provider in 2019 acquired Turbonomic Inc. for $1.5 billion and Red Hat Inc. for $34 billion. Analysts say this latest acquisition fits with that overall move into hybrid could.

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