The move highlights the need for effective application and data integration as digital transformation accelerates. Credit: Gett Images IBM is bolstering its portfolio in artificial intelligence and hybrid cloud services, announcing a move to acquire Software AG’s enterprise integration platforms. The tech giant will shell out € 2.13 billion ($2.33 billion) to bring the StreamSets and webMethods platforms into its fold. In October, Software AG launched Streamsets and webMethods as its Super Ipaas business. An integration platform as a service (iPaaS) is a cloud-based system used to create new applications or to orchestrate data flows. As businesses speed up their digital transformation, solutions for application and data integration become key for modernizing applications and deploying AI effectively throughout the enterprise, IBM said in a news release announcing the deal. “StreamSets and webMethods are among the technology leaders in application integration, API management, and data integration. IDC predicts the worldwide integration software market will exceed $18.0 billion in 2027 at a compound annual growth rate (CAGR) of 16.1%.1,” IBM said. The IBM acquisition is consistent with the tech giant’s strategy to lean into WatsonX AI by extending the data value chain in both the cloud and hybrid environment, said Dhaval Moogimane, senior partner for High-Tech & Software at the consulting firm West Monroe Partners. “This is relevant for their clients in industries with large multi-cloud and hybrid cloud environments such as financial services, insurance, and healthcare, where IBM has a strong presence and could allow them to accelerate the delivery of vertical AI solutions in those markets,” he added. IBM boosts cloud portfolio IBM is boosting its cloud technology portfoilio by buying Software AG’s IPaaS tools. The move is part of IBM’s focus on hybrid cloud, a plan they’ve been building on with some major buys, including Red Hat for $34 billion in 2018 and Apptio for $4.6 billion in June. The purchase “is reflective of organizations continuing to look into differentiating their positioning around the overall AI and data value chain,” Moogimane said. The move highlights the ongoing consolidation in the tech industry, where large players are acquiring specialized platforms to diversify their offerings and strengthen their market position, said Ankit Prakash, the founder of Sprout24, a contextual data platform for SaaS products. “It’s a clear signal that the future of technology lies in the convergence of data, AI, and cloud services, a nexus that is rapidly becoming the backbone of digital transformation strategies across industries,” he added. Software AG, a key figure in the software sector, is primarily owned by Silver Lake, a major private equity firm. Silver Lake secured a 93.3% stake in the German software company following a takeover campaign earlier this year. This acquisition valued Software AG at about € 2.6 billion ($2.84 billion). Silver Lake took control of Software AG by initially buying a 63% majority stake for $2.4 billion. They later increased their ownership to over 85% in September. Silver Lake has further consolidated its hold on Software AG by acquiring 93% of the company, with plans to take it private by delisting it from the stock market. “IBM is the ideal home for webMethods and StreamSets, the products at the heart of our Super iPaaS vision,” said Sanjay Brahmawar, Chief Executive Officer of Software AG, in a news release. “Combined with IBM’s global scale and focus on hybrid cloud and AI, our people will have a fantastic opportunity to develop while helping enterprises everywhere get the most out of their applications and data.” IBM said that StreamSets and webMethods will be acquired with available cash. The transaction is expected to be completed in the second quarter of 2024, subject to customary closing conditions, including regulatory approvals. 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