Dive Brief:
- IBM agreed to purchase data streaming platform Confluent for $11 billion Monday. Both companies’ boards greenlit the transaction, which is expected to close by the middle of next year, pending approval by Confluent shareholders and regulators, according to the announcement.
- The acquisition will expand IBM’s hybrid cloud capabilities, creating pipelines across public and private cloud environments to feed data-hungry AI applications, significantly augmenting the company’s existing data and automation portfolio, IBM Chairman, President and CEO Arvind Krishna said in the announcement.
- “Data is spread across public and private clouds, data centers and countless technology providers,” said Krishna. “IBM and Confluent together will enable enterprises to deploy generative and agentic AI better and faster by providing trusted communication and data flow between environments, applications and APIs.”
Dive Insight:
IBM is banking on generative AI and an emerging class of agents to spur growth in its software and consulting divisions. The company is also leaning on its hybrid cloud expertise to pave the way for enterprise adoption.
The Confluent deal highlights the strategic importance of data capabilities and echoes Salesforce’s $8 billion Informatica acquisition earlier this year.
“The main focus for the acquisition is real-time data streaming to support AI,” Andrew Humphreys, senior director analyst at Gartner, told Channel Dive in an email. “This enables IBM to compete more effectively… as the platform to control and access your data and feed AI.
M&A helped transform IBM from mainframe monolith to a diversified software and consulting business with AI in its DNA.
The company spent $34 billion to acquire Red Hat in 2019 and doubled the containerization and IT management service provider’s quarterly revenue in five years. Software is now IBM’s largest segment, accounting for $7.2 billion of the company’s $16.3 billion in revenue during its most recent quarter.
“Red Hat allowed us to enter the new space — helped accelerate IBM's overall growth rate,” Krishna said, during the company’s Q3 2025 earnings call in October. Hybrid cloud, AI, data and automation were on the M&A menu, he added.
Confluent fit the bill by filling crucial gaps in IBM’s data capabilities.
“IBM has a history of acquisition of competitors and up to about three years ago used to resell Confluent as they felt it addressed a gap in their integration portfolio,” Humphreys said. “IBM is also looking to grow in data governance and creating a data layer for AI.”
Earlier this year, IBM expanded its data and AI portfolio with the acquisitions of AI consulting firm Hakkoda, agentic AI startup Seek AI and unstructured data platform DataStax.
Confluent adds a “data-in-motion” backbone to the IBM stack, Forrester VP and Principal Analyst Noel Yuhanna said in an email.
“While IBM previously supported streaming … Confluent significantly accelerates its ability to deliver a unified, enterprise-grade data platform with seamless real-time capabilities across hybrid and multi-cloud environments,” Yuhanna said.
