IBM announced that it intends to acquire Applications Software Technology(AST), a leading global Oracle consultancy. AST specializes in delivering digital transformation solutions via Oracle Cloud Applications, with a focus on the public sector, including local governments and K-12 education.
The acquisition is expected to close in the first quarter of 2025, subject to regulatory approvals and customary closing conditions. Financial details of the transaction have not been provided.
Who is AST?
Applications Software Technology LLC (AST), founded in 1995, is a full-service enterprise systems integrator specializing in digital transformation and process reengineering.
AST serves a diverse range of industries, including:
- Public Sector: Collaborating with state and local governments to improve operational productivity and efficiency using Oracle Cloud Solutions.
- Commercial Sectors: Providing tailored solutions for industries such as manufacturing, energy, consumer packaged goods, healthcare, high tech, mass transit, and engineering and construction.
The company’s service offerings include:
| Cloud Applications | Customer Cloud: Solutions designed to enhance customer engagement and experience. Configure, Price, Quote (CPQ) Cloud: Tools to streamline sales through accurate product configuration and pricing. ERP Cloud: Comprehensive financial and operational management solutions. Human Capital Management (HCM) Cloud: Systems to manage human resources functions effectively. EPM Cloud: Tools for financial planning, budgeting, and forecasting. Supply Chain Management (SCM) Cloud: Solutions to optimize supply chain operations. |
| Cloud Platform/Technology | Lift and Shift: Services to migrate existing applications to cloud environments. DevOps: Practices to enhance collaboration between development and operations teams. Cloud and Cross-Cloud Integration: Ensuring seamless interoperability between different cloud services. Security: Implementing robust security measures to protect data and applications. Cloud and Cross-Cloud Testing: Validating the performance and reliability of cloud-based applications. Analytics: Leveraging data to provide actionable business insights. |
| Managed Services | Application Management: Ongoing support and maintenance of enterprise applications. Monitoring & Compliance: Ensuring systems adhere to regulatory standards and perform optimally. |
Strategic Fit Within IBM Consulting
Bringing AST into IBM Consulting aligns closely with IBM’s broader strategy to expand its consulting footprint, particularly in high-demand areas such as cloud transformation, enterprise modernization, and public sector solutions. AST brings deep expertise in Oracle Cloud Applications, complementing IBM’s existing capabilities and reinforcing its position as a leading Oracle implementation partner.
Key synergies include:
- Enhanced Oracle Expertise: AST’s specialization in Oracle Fusion Cloud, JD Edwards, and NetSuite strengthens IBM’s ability to offer end-to-end Oracle solutions that cater to complex enterprise requirements.
- Public Sector Strength: AST’s proven track record in delivering solutions for public sector clients, including local governments and educational institutions, bolsters IBM’s offerings in a market characterized by unique challenges such as legacy system migration and compliance.
- Global Reach and Resources: AST’s operational presence in key regions, including North America, the UK, Canada, and India, complements IBM’s global delivery network, enabling broader geographic coverage and scalability.
- Multi-Vendor Integration: AST’s capabilities in Salesforce and MuleSoft integration align with IBM’s open ecosystem strategy, facilitating the delivery of hybrid and multi-cloud solutions.
- Consulting Depth: By integrating AST’s consulting talent and domain expertise, IBM strengthens its ability to support clients in achieving digital transformation goals with precision and efficiency.
Analysis
Consulting is a pivotal component of IBM’s business strategy, serving as a primary driver for growth and innovation and significantly contributing to its overall revenue. In its FQ3 2024 earnings release, IBM reported that its consulting business generated $5.2 billion in top-line revenue.
IBM has been steadily building its consulting organization, often growing through targeted acquisitions—the last of which was another Oracle-focused practice, Accelalpha. In fact, the deal for Accelalpha closed about the time IBM announced its intent to acquire AST.
| Year | Company | Consulting Area |
| 2022 | Neudesic | Microsoft Azure consultancy, expanding cloud services and AI capabilities. |
| 2022 | Octo | IT modernization and digital transformation services provider for the U.S. federal government. |
| 2024 | Accelalpha | Global Oracle services provider, expanding Oracle consulting expertise in supply chain and logistics. |
The acquisition significantly enhances IBM’s Oracle consulting capabilities, especially for navigating the complex and unique demands of public sector clients. Bringing AST’s expertise in Oracle Fusion Cloud and related applications in-house allows IBM to deliver more specialized solutions to support legacy system transitions and compliance requirements.
The acquisition is strong competitively, positioning IBM to better compete with Accenture and Deloitte in the Oracle consulting market. By addressing public sector-specific challenges and expanding its Oracle Cloud expertise, IBM opens the door to a stronger foothold in a market increasingly defined by cloud transformation and multi-cloud strategies.
AST’s consultants and domain expertise will reduce IBM’s dependency on external partnerships for Oracle-related projects, enhancing its overall operational efficiency.
Overall, IBM’s acquisition of AST reflects its continuing commitment to expanding its consulting capabilities in high-demand sectors while solidifying its position in the Oracle Cloud Applications space. It’s a strong acquisition that increases IBM Consulting’s reach, addressable market, and competitiveness.
