IBM will pay $4.6 billion in cash to acquire Apptio. The deal, which is expected to close in the second half of 2023, comes as businesses cut back on technology budgets due to macroeconomic conditions. IBM itself laid off 3,900 workers earlier this year and first-quarter revenue rose just 1% year-over-year.

The acquisition of Apptio, a SaaS company with more than 1,500 customers and partnerships with big players like AWS and Salesforce, will benefit IBM’s Red Hat division, AI portfolio and consulting division. In an interview with Reuters, Vice President Rob Thomas said that IBM will look for opportunities in the software and consulting space in the future.

IBM, a century-old company, is reorienting itself to focus on AI and cloud-based services. In 2019, it bought software provider Red Hat for $34 billion, its largest deal ever. Two years later, it spun off its data center and IT infrastructure division Kyndryl Holdings. In 2022, the company will sell some of its health data and analytics assets.

Apptio was founded in 2007 to help businesses manage their cloud spending and provide features like IT budgeting, forecasting, and financial analytics. Apptio had $233 million in revenue in 2018 and is expected to grow 11-13% annually.

Before its sale to IBM, Apptio belonged to Vista Equity Partners, which spent $1.94 billion to take Apptio private in 2018.

(According to Reuters)

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