IBM Expands Artificial Intelligence and Hybrid Cloud Footprint with $16.6 Billion!
IBM has announced that it will acquire StreamSets and webMethods, the enterprise technology platforms of European systems software provider Software AG, for €2.13 billion (Rs. 16.63 billion) in cash.The deal is expected to close in the second quarter of 2024. With this acquisition, IBM will further expand its footprint in artificial intelligence and hybrid cloud, industry sources said.
StreamSets is said to be a cloud-native DataOps and data ingestion platform that allows organizations to achieve consistent data access and delivery across a wide range of data sources and types. webMethods provides additional integration and API management tools for hybrid multi-cloud environments for customers and partners that can be deployed in self-built facilities and cloud platforms. The two form what Software AG calls its "Super iPaas" business, which includes modern application architectures, platform and ecosystem business models, integration and business process automation.
Software AG said its iPaaS platform is growing and profitable with significant recurring revenues, and that the two services have more than 1,500 customers globally. webMethods teams will combine with the IBM team to build hybrid cloud and next-generation AI solutions for organizations.
StreamSets and webMethods will help clients unlock the full potential of their applications and data, said Rob Thomas, IBM's vice president and commercial officer for software.Rob Thomas, IBM's vice president, said this powerful combination will help drive innovation while preparing the business for AI, no matter where the application or data resides.
Currently, IBM is vigorously seeking to strengthen its performance in the AI and hybrid cloud market, and in addition to continuously integrating different cloud and self-built services, IBM has made several moves to expand its footprint through investments and acquisitions. For example, in 2018, IBM spent $34 billion to acquire software and services company Red Hat, a deal that is considered an important step in IBM's bet on hybrid cloud. And during 2023, IBM has acquired companies such as Apptio and Manta to supplement its capabilities in artificial intelligence.
To streamline operations and focus on strengths, IBM has also been divesting underperforming businesses. These include its semiconductor manufacturing, x86 servers, managed infrastructure services, Watson Health, and other businesses.
Earnings data show that in the third quarter of 2023, IBM's total revenue was $14.752 billion, up 4.6% from $14.107 billion a year earlier, and operating profit from continuing operations was $2 billion, up 23% from the same period last year.
The Software segment, which includes the Hybrid Platforms and Solutions business and the Transaction Processing business, reported revenue of $6.265 billion, up 7.8 percent compared to the same period last year, and a gross profit margin of 79.5 percent, which was also up compared to the same period last year. Particularly noteworthy is the 8% year-over-year revenue growth in the Hybrid Platforms and Solutions business and the 6% year-over-year revenue growth in the Data and AI segment. As you can see, IBM's focus on AI and hybrid cloud is driving steady business revenue growth.
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