IBM today announced another purchase to add to its data, cloud, and analytics services portfolio, only a week after acquiring startup BoxBoat. IBM hopes to strengthen its hybrid cloud and AI strategy in Europe, Latin America, and North America with Bluetab.
In order to enable digital transformation, businesses have turned to the cloud for flexibility. According to IDG, the average cloud budget has increased from $1.62 million in 2016 to $2.2 million now.
Furthermore, despite the pandemic, the data services market continues to expand in both revenue and size. Gartner predicts that the global data and analytics services market will grow at a compound annual growth rate of 14.6 percent over the next five years, reaching $232 billion by 2024.
Bluetab, a software and services firm created in 2005 with locations in the UK, Mexico, and Spain, provides technologies to assist businesses in implementing hybrid multicloud data platforms.
Truedat, the company’s open source data governance tool, presumably helps businesses become more data-driven, while Fastcapture, its AI-powered document classification and extraction service, ostensibly helps businesses become more data-driven.
“The key to solving data challenges for our clients has been the exceptionally talented and experienced team we have been able to build as well as the value-added accelerators we have developed,” Bluetab cofounder José Luis López stated in a press release. “We could not be more excited by the opportunity that IBM offers us to continue to grow our team, to build on our accelerators, and to help more clients achieve leadership positions by leveraging their data.”
Bluetab’s approximately 700 data experts will eventually join IBM’s Global Business Services (GBS) segment, where they will leverage partnerships in the banking, telecom, energy, and utilities industries, according to IBM SVP Mark Foster. It’s part of IBM’s larger drive to profit on a $1 trillion hybrid cloud market opportunity, some experts say.
“The outside-in digital transformation of the past is giving way to the inside-out potential of using company-owned data with AI and automation to generate business value and create intelligent workflows,” Foster said. “Our acquisition of Bluetab will fuel migration to the cloud and help our clients to realize even more value from their mission-critical data.”
Arvind Krishna has led a remaking of IBM since taking over as chairman last year, focused on revenue growth and investing in cloud and artificial intelligence technology. IBM has spent more than $1.7 billion on 12 acquisitions in the last five quarters, a strategy that has paid off. Clients spend $3 to $5 in software and $6 to $8 in services for every dollar spent on platforms, according to IBM.
With about $6 billion in revenue in the cloud consulting services industry in 2020, IBM’s GBS is a profitable business in its own right. GBS increased the amount of Red Hat client engagements from the previous year to over 150 in the first quarter of 2021. IBM claims that its Red Hat practice has generated $2 billion in revenue to far.
The Bluetab acquisition’s financial facts were kept under wraps by IBM. The deal is subject to usual closing conditions, but the firms expect it to close in the third quarter of 2021.