IBM today made another acquisition to expand its reach and provide companies with AI-based services to manage their networks and workloads. It announced that it is acquiring Turbonomic, a company that provides tools to manage application performance (especially resource management) as well as Kubernetes and network performance – part of its broader strategy to add more AI to IT operations, or as it is called, AIOps bring.
The financial terms of the deal were not disclosed, but according to PitchBook, Turbonomic was worth nearly $ 1 billion – or more precisely, $ 963 million – in its final round of funding in September 2019. A report in Reuters that rumored the deal a little earlier today, the value was between $ 1.5 billion and $ 2 billion. A source tells us the number is correct.
Investors in the Boston-based company included General Atlantic, Cisco, Bain, Highland Capital Partners, and Red Hat. The last of these is of course now part of IBM (so theoretically an investor too), and Red Hat and IBM have jointly developed a number of cloud-based tools that address use cases for telecommunications, edge and enterprise.
This latest deal will help build that further and, more generally, it has been an area where IBM has been aggressive lately. Last November IBM acquired another company called Instana IBM indicated that the Turbonomic deal complements this and integrates the tools of the two technologies together, IBM said.
Turbonomic’s tools are particularly useful in hybrid cloud architectures that encompass not only local and cloud workloads, but also workloads that are typically expanded across multiple cloud environments. While this may be the architecture people ask for for resiliency, cost, location, or other practical considerations, the fact is that managing it can be challenging. Turbonomic’s tools automate management, analyze performance, and suggest changes network operations engineers must make to meet usage requirements.
“Companies are looking for AI-powered software that can help them overcome the size and complexity issues of running applications across the cloud,” said Ben Nye, CEO of Turbonomic, in a statement. “Turbonomic not only prescribes measures, but enables customers to take them. Through the combination of IBM and Turbonomic, the response times of the target applications are continuously ensured, even during peak loads. “
The bigger picture for IBM is that this is yet another sign of how the company continues to move away from its old business of servers and deeper services, and especially services in the infrastructure of future cloud-based networks.
“IBM continues to reshape its future as a hybrid cloud and AI company,” said Rob Thomas, SVP, IBM Cloud and Data Platform, in a statement. “The acquisition of Turbonomic is another example of our commitment to make the most effective investments to drive this strategy and ensure customers find the most innovative ways to drive their digital transformations.”
A big part of the AI promise in the world of networking and IT operations is how businesses can rely more on automation, another area where IBM has been very active. (In a very different application of this technology – in the business services space – MyInvenio was acquired in Italy earlier this month to bring process mining technology into operation.)
The promise of automation is lower cost of ownership, a critical issue for managing network performance and availability in hybrid cloud deployments.
“We believe that AI-powered automation has become inevitable and has helped make all information-centric jobs more productive,” said Dinesh Nirmal, general manager of IBM Automation, in a statement. “For this reason, IBM continues to invest in the provision of AI-powered automation functions from a single source, which encompass business processes and IT. The addition of Turbonomic takes our portfolio one more important step forward by ensuring that customers have a complete view of what is going on in their hybrid cloud infrastructure and across the enterprise. “