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IBM Focuses on AI & Cloud, Completes Turbonomic Acquisition

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International Business Machines Corporation (IBM - Free Report) recently announced the completion of its acquisition of Turbonomic to boost management of applications’ performance across hybrid cloud environment and enhance its Artificial Intelligence (AI) -based automation capabilities.

Turbonomic specializes in providing tools to manage application performance (mainly resource management), along with Kubernetes and network performance.

By acquiring Turbonomic, IBM will be able to provide customers with AI-powered automation capabilities that span from AIOps (the use of AI to automate IT Operations) to application and infrastructure observability — all built on Red Hat OpenShift to run across any hybrid cloud environment.

Turbonomic is expected to build on the company’s investment in an ecosystem of partners including Cisco (CSCO - Free Report) to help businesses accelerate their move to hybrid cloud and AI. An OEM relationship under which Turbonomic provided technology to the Cisco Intersight Workload Optimizer is slated to continue.

Moreover, Turbonomic’s application performance monitoring (APM) will get expanded support for infrastructure and services for all the major public clouds including IBM Cloud. The company expects Turbonomic’s network performance management (NPM) technology to help drive IBM’s telecom business including intelligent optimization of applications running in 5G environments.

Focus on AI-powered Automation

IBM is focused on improving its AI-powered automation offerings. With its purchase of Red Hat, IBM is the leader in hybrid cross-cloud management software and services, empowering customers to modernize their IT landscapes from data center to edge-cloud leveraging enterprise-grade, cloud-native technologies that run anywhere, on any cloud.

Turbonomic’s tools are particularly useful in hybrid cloud architectures, which involve not just on-premise and cloud workloads but workloads that typically are extended across multiple cloud environments.

The acquisition complements IBM's recent acquisition of Instana for APM and observability, and the launch of IBM Cloud Pak for Watson AIOps to automate IT Operations using AI.

Cloud Pak software solutions, which leverage the Red Hat OpenShift Platform, assist clients in deploying intelligent workflow solutions across board by providing integrated AI and data functionalities for hybrid cloud.

In May 2020, IBM had rolled out Watson AIOps, which automates the detection of IT glitches in real time by utilizing AI technology.

This Zacks Rank #3 (Hold) company plans to integrate Turbonomic's ARM software with the APM and real-time observability capabilities of Instana and the ITOps capabilities of IBM Cloud Pak for Watson AIOps to help customers assure application performance and minimize costs by driving optimization across development, test and production environments. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

IBM’s expanded push into AIOps comes as a growing number of players are adding AI-based automation including Cisco-AppDynamics, Splunk (SPLK - Free Report) , Datadog (DDOG - Free Report) , Micro Focus, BigPanda, Moogsoft and PagerDuty.

Nonetheless, in addition to improving AI-powered automation offerings, IBM is growing its cloud business. The company considers hybrid cloud to have an enormous revenue-generating potential. According to a Mordor Intelligence report, the hybrid cloud market is expected to witness a CAGR of 18.73% over the 2021-2026 period.

However, escalating costs on hybrid cloud platform amid intensifying competition in the cloud vertical from dominant players like AWS, Azure and Google Cloud pose a major headwind.

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