IBM reportedly close to acquiring software company Apptio for $5B

International Business Machines Corp. is reportedly close to a deal to acquire software company Apptio Inc. for $5 billion, nearly five years after Vista Equity Partners Management LLC acquired the firm for $1.94 billion.

The Wall Street Journal, citing people familiar with the matter, reported Friday evening that IBM and Vista Equity Partners are in advanced talks and that a deal could be closed by the end of the weekend. As of Sunday evening EDT, no agreement had been announced, although that could quickly change. The Journal report also noted that it’s unclear whether the purchase price includes debt.

Founded in 2007 and notable as the very first company venture capital firm Andreessen Horowitz invested in, Apptio offers cloud-based technology and hybrid business management software for managing businesses in the IT field. The company provides a suite of business analytics applications that ingest data from various financial, operational, and billing systems to deliver a fact-based understanding of technology cost, quality and value.

Apptio’s software provides information technology leaders with actionable insights that can expedite data-driven decision-making processes. Organizations can use this information to align their technology expenditure with broader business outcomes and streamline IT processes such as cost transparency, benchmarking and operational efficiency.

One key feature underpinning Apptio’s services is its in-memory cost analytics platform. The platform is designed with next-generation capabilities and is the foundation for applications that deliver insights into an enterprise’s infrastructure, applications, and business services. The gathered insights encompass both on-premises and cloud-based systems.

Apptio has more than 1,800 customers, including more than 60% of the Fortune 100, with its customers managing an annual technology spend in excess of $650 billion.

The acquisition, should it happen, comes at a time when IBM is shifting toward a company focused on the hybrid cloud and artificial intelligence. IBM has divested or spun off several companies in recent years, including Kyndryl Holdings Inc. and Watson Health, and is also reportedly exploring the sale of its weather business.

Conversely, IBM acquired software provider Turbonomic Inc. for $1.5 billion in 2019 and Red Hat Inc. for $34 billion in 2019. A deal to acquire Apptio would fit with a pattern of Big Blue snapping up companies as part of its overall shift.

Image: Apptio