IBM has announced its acquisition of cloud software company Apptio for $4.6 billion. This move comes as organisations increasingly adopt hybrid cloud architectures, combining private and public clouds with on-premises solutions. Apptio has developed a platform that enables organisations to track data in hybrid environments, including its location and usage, as well as the associated financial and resource costs. IBM plans to integrate Apptio with its existing IT automation software and AI platform to offer businesses solutions for managing and optimising IT spend.

Apptio brings a substantial customer base of 1,500 enterprises, including over half of the Fortune 100 companies. It also has key integrations and partnerships with major cloud providers such as Amazon Web Services, Microsoft Azure, and Google Cloud Platform. This acquisition allows IBM to expand its services and upsell to existing clients.

“The acquisition is expected to close in the second half of 2023, pending regulatory approvals,” IBM stated. “Apptio’s offerings combined with IBM’s IT automation software and watsonx AI platform gives clients the most comprehensive approach to optimise and manage all of their technology investments,” said Arvind Krishna, CEO and chairman of IBM.

“This deal will follow IBM’s 2021 purchase of software provider Turbonomic for over $1.5 billion and its 2019 acquisition of software company Red Hat for $34 billion,” the company added.

The deal highlights the consolidation happening in the cloud management services space, as Apptio itself has made several acquisitions in recent years. Additionally, the acquisition gives private equity firm Vista a significant amount of funds for future acquisitions, as traditional funding avenues such as IPOs and venture capital have become more challenging.

“Our customers are evolving to a complex digital-first, hybrid world where technology investments are distributed and decentralised but all innovation must be aligned with clear business outcomes,” said Sunny Gupta, Apptio co-founder and CEO. “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.”

Overall, the acquisition of Apptio enhances IBM’s IT automation capabilities, enabling businesses to optimise their IT spending and gain better insights into their technology investments.