IBM buys 50-year-old Software AG's enterprise tech units for €2.13B in cash

Big Blue shall not iPaaS up on app integration, APIs and data management to help with AI push

IBM will buy two of European software industry veteran Software AG's tech platforms for €2.13 billion in cash.

Founded in 1969, the German biz made its name producing transactional databases and application integration software for mainframe platforms in the 1970s and 1980s.

In April this year, private equity investor Silver Lake tabled a bid to take over Software AG for an implied value of around €2.2 billion. In June it secured a 63 percent stake.

In a statement, IBM said Software AG's products StreamSets and webMethods were among the technology leaders in application integration, API management, and data integration, and part of a market IDC expects to be worth more than $18.0 billion in 2027, growing at 16 percent annually.

Big Blue said StreamSets would add data ingestion to watsonx, IBM's AI and data platform, while webMethods would offer additional integration and API management tools.

Software AG's Super iPaaS platform is growing, profitable and has a significant recurring revenue profile, Big Blue said, and StreamSets and webMethods serve more than 1,500 clients across the globe.

"This powerful combination helps drive innovation while preparing businesses for AI, no matter where applications or data reside," said Rob Thomas, IBM senior veep for software and chief commercial officer. "Today's news will give IBM clients and partners one of the most modern and comprehensive application and data integration platforms in the industry."

Software AG was founded by six German consultants, and in its early days, mathematician and computer scientist Peter Schnell, a co-founder, developed a transactional database management system called ADABAS (which runs on the UK's Police National Computer, among other things), launched for mainframes in 1971.

It floated on Frankfurt Stock Exchange in 1999, and in 2007, bought WebMethods, a popular application and process integration platform, at a value of $546 million.

In May 2020, was offered to customers as an Integration Platform-as-a-Service (iPaaS) on Microsoft's Azure cloud environment. Later that year, SoftwareAG launched AppMesh, an API-integration layer designed to help companies organise and manage APIs along the lines of business semantics, the transactions they're used for, rather than their technical characteristics.

More recently, Software AG launched products targeting process mining using real-time data. In 2021, it launched new functions in its ARIS product promising to give customers a more in-depth understanding of how processes are working and what causes them to slow down, principally through IoT data.

Notable Software AG customers include UK supermarket giant Tesco, European aerospace manufacturer Airbus, the United States Army, Australia Post, and German industrial giant Siemens. ®

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