IBM is investing €2.13 billion (approximately $2.3 billion) to purchase two key data integration tools from the German enterprise software company, Software AG. This all-cash transaction includes acquiring StreamSets, a data integration platform that Software AG bought last year, and WebMethods, which Software AG acquired in 2007 for over $500 million.
Software AG was itself taken over by Silver Lake earlier in the year. Initially, Silver Lake bought a 63% majority stake for $2.4 billion, later increasing its ownership to over 85% in September. Recent reports indicate that Silver Lake has now acquired 93% of Software AG and is planning to remove the company from public trading.
For IBM, this acquisition aligns with its strategy of embracing hybrid cloud technology. This approach has been strengthened by a series of major acquisitions, including the $34 billion purchase of Red Hat in 2018 and the recent $4.6 billion acquisition of Apptio in June.
Cloud computing’s growth has led to a shift towards hybrid models, which combine local infrastructure for security and lower latency with the scalability of public cloud resources. The challenge in such environments is managing and processing data across various applications and cloud services. Data integration systems, like the ones IBM is acquiring, address this challenge by enabling the creation of data pipelines that work with data regardless of its location or format.
These technologies, particularly StreamSets and WebMethods, offer solutions across various aspects of application and data integration, including API management—a specialty of WebMethods.
IBM’s focus on AI is also a key aspect of this acquisition. The company recently launched Watsonx, a new data science platform that provides tools for AI development, deployment, and data source management. The integration of StreamSets and WebMethods with IBM’s AI and data platforms, including Watsonx, aims to enhance the potential of applications and data, as highlighted by IBM’s senior VP for software and chief commercial officer, Rob Thomas.