The News: IBM is acquiring two Integration platform as a service (iPaaS) enterprise software products from Software AG for €2.13 billion ($2.3 billion) to bolster the data ingestion capabilities of IBM’s watsonx AI and data platform and application modernization products. Under the deal, IBM is acquiring Software AG’s StreamSets platform to add data ingestion capabilities to IBM’s watsonx generative AI and data platform, while Software AG’s webMethods platform is being acquired to provide deeper integration and API management tools to help IBM customers with their hybrid multi-cloud environments. Read the full press release on the acquisitions on the IBM Newsroom web page.

IBM Acquiring Two Software AG Platform as a Service Applications

Analyst Take: As 2024 begins, I believe that this is a great move for IBM as it acquires what Software AG calls its Super integration platform as a service (Super iPaaS) applications. And the reason is clear—as Big Blue grows the features and capabilities of its nascent watsonx AI and data platform, adding capabilities through acquisitions quickly gives IBM more proven tools to broaden the uses and possibilities of watsonx.

And I would bet that we will continue to see more technology product and service acquisitions by IBM in the future as it continues to build out its watsonx generative AI strategy. This can quicken the pace of innovation and bring together good technologies to build even better ones without having to start from square one.

The planned acquisitions of the StreamSets and webMethods product lines by IBM also make sense as IBM continues to accelerate and expand its product and service portfolio around AI and hybrid cloud, which are continuing to drive the tech marketplace to a frenzy in the world of enterprise computing. These products will bring valuable tools and workflows that will help IBM’s customers get more out of their watsonx investments and expansion plans.

What Is Super iPaaS?

Software AG calls its products Super iPaaS platforms to differentiate them from other iPasS applications on the market. Super iPasS, according to Software AG, allows customers to bring together all types, shapes, and sizes of integration in a unified platform, including applications, data, events, APIs, and more. Competing iPasS platforms lack such broad unification capabilities, making them less effective and complicating workflows for users, according to Software AG.

What Is the StreamSets Platform?

StreamSets is a cloud native DataOps and data ingestion platform built to help enterprises maintain consistent access and delivery of data across a wide range of data sources and types. In addition, customers can use StreamSets to design smart data pipelines and streamline and improve the ingestion of real-time and batch data.

What Is the webMethods Platform?

WebMethods is an integration and API management platform that provides business to business (B2B) integration, managed file transfer, and a flexible API gateway to manage, monitor, and monetize APIs. WebMethods can be deployed in the cloud or on-premises.

How IBM Gains Through These Platform as a Service Acquisitions

These acquisitions came together after a 20-year business relationship between the two companies. IBM said it expects the additions of StreamSets and webMethods to also meld well into IBM’s broad product lines beyond watsonx and hybrid cloud, including its Red Hat division, IT automation products, and IBM Consulting. For StreamSets and webMethods, these platforms are expected to gain growth and revenue under the IBM umbrella through Big Blue’s global operations in more than 175 countries.

More Details About the Platform as a Service Acquisitions

IBM’s acquisitions of StreamSets and webMethods are expected to close in the second quarter (Q2) of 2024, subject to customary closing conditions, including any needed regulatory approvals. Software AG is majority owned by the private equity firm Silver Lake. StreamSets and webMethods are used by more than 1,500 clients around the world.

Overview of the IBM Software AG Deal—What It Means

For IBM, I believe that the acquisitions of these two Software AG Super iPaaS applications will deliver broad and valuable new capabilities for its customers across its growing watsonx ecosystem and many of its other enterprise technology business units. In my view, this forward-looking and wise strategy adds further product and service refinements that are being demanded by IBM’s broad customer base as users seek more tools to solve their most vexing business IT challenges. It will be interesting to watch throughout 2024 as IBM brings these technologies into its ecosystem and offers new possibilities for its global customers.

Disclosure: The Futurum Group is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.

Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of The Futurum Group as a whole.