IBM acquires cloud optimization company Turbonomic for over $1.5B

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IBM is acquiring Turbonomic, a Boston-based company whose main product is a platform that enterprises can use to reduce cloud spend and improve applications’ performance. The figures related to the deal have not yet been released.

However, according to Reuters’ sources, it could be between an estimated $1.5 billion and $2 billion. That price tag is significant, given that in its last funding round, the company was given a valuation of $963 million. The platform it offers uses artificial intelligence to optimize public cloud environments for enterprises.

Turbonomic’s platform

There are two main ways the platform can be used. First, it can be deployed to optimize cloud applications’ performance and reduce infrastructure costs incurred. The AI models powering Turbonomic analyze a company’s cloud environment to see if any workloads are allocated more resources than they need to be optimal.

The AI models then provide admins with recommendations on how to fix these issues.

The platform has a similar system offering recommendations about wasteful cloud spending. For instance, IT teams can see when they have provisioned more storage capacity for a workload than it needs, among other uses.

Value for IBM

IBM may also be hoping that the acquisition will complement IBM Cloud Pak for Watson AIOps. The product provides AI-generated recommendations similar to Turbonomic, to troubleshoot infrastructure problems.

As IBM refocuses from its legacy business models, this acquisition is a clear indication of how it plans to play things differently. IBM announced late last year that it would spin off its $19 billion managed infrastructure services unit.

Turbonomic is an example of the commitment the company is showing to refocus itself and ensure continuity into the future. It is expected that IBM will complete the acquisition in the second quarter.