IBM Corp. today announced plans to acquire Software AG’s StreamSets and webMethods application integration platforms for €2.13 billion, or about $2.33 billion, in cash.

The deal comes only months after Software AG was taken private by investment firm Silver Lake at a more than €2.4 billion valuation. The fact that the value of the new deal with IBM is so close to the price at which the company was taken private suggests StreamSets and webMethods constitute core pillars of its product portfolio. IBM detailed today that the products are “growing, profitable” and have an installed base of more than 1,500 organizations.

The two products were part of Software AG’s Digital Business revenue segment prior to its acquisition by Silver Lake. The segment also included a number of other applications. StreamSets, webMethods and Software AG’s other Digital Business products accounted for €393.2 million of the €570.7 million in revenue it generated during the first nine months of 2023.

Germany-based Software AG obtained StreamSets through a startup acquisition in early 2022. It’s a so-called iPaaS platform that helps companies move information between applications. A retailer, for example, could use StreamSets to transfer sales logs from an on-premises database to a Snowflake environment.

StreamSets supports several data transfer methods. It can stream records to a target system in real-time right after they’re created, or send them over in batches at set time intervals. StreamSets also provides a so-called change data capture tool for syncing edits between copies of a business record that are stored in different systems.

The other product IBM is buying from Software AG, webMethods, is designed for a similar set of tasks. It helps companies automatically transfer data between internal systems. Software AG obtained webMethods in 2007 by acquiring the dot-com era company that had originally developed the platform for $546 million.

The software maker’s website suggests that it’s working on a new version of the platform called webMethods AI. According to Software AG, the offering allows users to create integrations that facilitate the movement of data between applications without writing any code. It can also monitor integrations for technical errors and automate parts of the troubleshooting workflow.

IBM said that it will use StreamSets and webMethods to extend the capabilities of its watsonx product suite. Introduced in March, watsonx provides tools that organizations can use to build artificial intelligence models. It also includes prepackaged neural networks optimized for tasks such as code generation.

Companies that adopt watsonx can store the information used by their AI models in a built-in data lakehouse platform called watsonx.data. Records from external applications may be pulled into the platform using a tool called ibm-lh. With the data transfer capabilities that streamSets and webMethods bring to the table, IBM can make it easier for enterprises to bring the business records they plan to use in AI projects into watsonx.data.

“Together with IBM’s watsonx AI and data platform, as well as its application modernization, data fabric and IT automation products, StreamSets and webMethods will help clients unlock the full potential of their applications and data,” said Rob Thomas, IBM’s senior vice president of software and chief commercial officer.

IBM expects to close the transaction in the second quarter of 2024. Following the sale of StreamSets and webMethods, Software AG will continue to have a presence in several segments of the enterprise software market. It provides a platform for managing internet of things devices, a database called Adabas & Natural, and a tool that help companies find ways of carrying out common business tasks more efficiently. 

Photo: IBM