IBM said this acquisition is the first announced by the company in 2024. Credit: Laborant/Shutterstock.

IBM has announced a definitive agreement to acquire application modernisation capabilities from IT services provider Advanced.  

This move is expected to enhance IBM Consulting’s mainframe application and data modernisation services, aligning with their hybrid cloud and artificial intelligence (AI) strategy.  

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The company did not disclose the financial details of the transaction. 

The US tech major said the acquisition bring talent, tools, and knowledge to the company, bolstering its ability to support clients on their mainframe application modernisation journeys.  

This is a critical step for IBM as CEOs increasingly prioritise technology modernisation to gain a competitive edge and accelerate business transformation. 

A recent survey by the IBM Institute for Business Value revealed that 67% of executives believe rapid transformation is essential to stay ahead of competitors, with 68% stating that mainframe systems are integral to their hybrid cloud strategies.  

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The company noted that the team joining IBM Consulting from Advanced is equipped with over three decades of experience and offers services including assessment, design, transformation, integration, and deployment, all aimed at modernising mainframe applications.  

The expertise of the incoming team spans several industries, including financial services, insurance, automotive, travel, transportation, government, utilities, and media.  

The services from the planned acquisition are also expected to complement IBM Watsonx Code Assistant for Z, a generative AI product that accelerates mainframe application modernisation. 

IBM said this acquisition is the first announced by the company in 2024. 

Since Arvind Krishna took the helm at IBM in April 2020, the company has acquired more than 35 companies, enhancing its hybrid cloud and AI capabilities.  

The transaction is expected to close in the second quarter of 2024, following customary closing conditions. 

In December 2023, IBM reached a $2.3bn agreement to acquire two of Software AG’s data platforms.