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IBM is said to be in advanced talks to buy FinOps software provider Appion for $5 billion. If completed, the deal would be the latest part of Big Blue’s plan to focus its business around hybrid cloud.
The two companies are said to be close to agreeing a takeover deal that could be announced this week. Wall Street Journal It was reported at the end of the week. It is currently unknown whether the $5 billion valuation includes Aptio’s debt. It is currently owned by private equity fund Vista Equity Partners.
Why IBM wants to pay $5bn for Apptio
In the year Founded in 2007 and headquartered in Washington state, Apptio provides FinOps tools – cloud applications – that enable technology leaders to track and analyze technology spend.
Specifically, it sells software to manage cloud and hybrid infrastructure costs, as well as tools to help track development costs when building new digital platforms.
The company It was bought by Vista Equity Partners in 2018 for $1.94 billion. It had $188 million in annual revenue at the time, and is reportedly the highest EBM is willing to pay for more than that: a figure that has grown over the past five years, even though Apptio hasn’t reported revenue since the acquisition.
Aptio’s clients include oil company Chevron, EDF Energy and Bank of Ireland, according to the company’s website.
Tech monitor Both IBM and Apptio have been reached out for comment.
IBM transition to focus on hybrid cloud
The deal leverages IBM’s latest move into the hybrid cloud market, combining the company’s traditional strengths in on-premises servers with its desire to move workloads to the cloud.
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CEO Arvind Krishna “IBM is laser-focused on the $1trn hybrid cloud opportunity” in 2020, he said, with the company moving its legacy IT infrastructure operations to new managed services provider Kindle. It also shuttered its Watson Health unit, which provided data and analytics services to the healthcare provider.
This has led IBM to focus on the cloud as well as other emerging technologies such as artificial intelligence and quantum computing. The company’s latest quarterly results in April showed early signs that this strategy could pay dividends despite tough market conditions. It reported first-quarter revenue of $14.3 billion, a modest increase from last year, with software revenue up 2.6 percent year-over-year to $5.9 billion.
Krishna, who has been in the post for three years, is on a mission to use technology to cut costs at IBM, and last month said 7,800 back-office roles at the company could be replaced by AI, with automated systems filling vacant administrative roles.
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