In the newest deal to enhance its cloud and automation capabilities, IBM announced on Monday that it will pay $4.6 billion in cash to Vista Equity Partners to acquire the technology spend-management platform Apptio. IBM stated that it will use cash on hand to fund the purchase and anticipates that it will close in the second half of 2023.
The agreement is made at a time when businesses are reducing their technological spending due to difficult macroeconomic conditions. IBM recorded a revenue rise of less than 1% year over year in the March quarter while cutting around 3,900 jobs in the early part of the year. Recently, IBM announced pausing employment hiring as approximately 7,800 positions may be replaced by AI in the upcoming years.
The technology behemoth claimed that the acquisition of Apptio, a software-as-a-service company with over 1,500 clients and alliances with cloud providers like Salesforce and Amazon.com’s AWS, will help IBM’s Red Hat business, AI portfolio, and consulting division.
Apptio, a company situated in Seattle that was established in 2007, assists businesses in managing and comprehending their expenditures on cloud services and provides functions like IT budgeting, forecasting, and financial analysis. According to analysts at UBS, Apptio’s revenue was approximately $233 million in 2018 and is projected to increase by 11%–13%.
“Going forward, we are opportunistic and looking for opportunities in the software and consulting space,” Senior Vice President Rob Thomas said in an interview. “Century-old IBM is changing its direction to concentrate on more recent AI and cloud-based services.”