“Big Blue” to Pay Vista $4.6B for Software Provider Apptio

IBM agreed to buy Seattle-based software company Apptio from private equity firm Vista Equity Partners for $4.6 billion, nearly five years after Vista took the firm private for $1.94 billion.

The all-cash deal is expected to close in the latter half of 2023.

Founded in 2007 by Sunny Gupta and Kurt Shintaffer, Apptio provides tools to help companies keep track of the software and services they use, and better manage costs.

IBM’s Red Hat business, which it purchased for $34 billion in 2019, consulting business and AI portfolio are expected to benefit from the deal.

The Apptio acquisition fits into a pattern of Big Blue acquiring firms as part of its overall transformation. IBM has divested or spun off several companies in recent years, including Kyndryl Holdings Inc. and Watson Health, and is also considering selling its weather business.

Apptio has three core offerings, all delivered as software as a service (SaaS) – ApptioOne, Apptio Cloudability, and Apptio Targetprocess. The company includes Amazon Web Services, Microsoft Azure, Google Cloud Platform, Salesforce, ServiceNow, Oracle and SAP as its customers and partners.

“Technology is changing business at a rate and pace we’ve never seen before. To capitalize on these changes, it is essential to optimize investments which drive better business value, and Apptio does just that,” said Arvind Krishna, CEO and chairman, IBM.

In April, IBM reported first-quarter revenue of $14.3 billion, up slightly from the prior year, and software revenue of $5.9 billion, up 2.6% year-over-year.