IBM acquires Instana for its AI-powered app performance monitoring

IBM today acquired Instana, a German-American software firm that specializes in developing application management software. The acquisition represents IBM's continued investment in hybrid cloud, big data, and AI capabilities. Terms of the deal weren't disclosed.

As workflows evolve, organizations are moving away from monolithic apps toward more complex distributed systems. With this evolution, application and system observability have become key areas of investment. performance metrics over long periods of time makes the process of determining acceptable performance expectations for apps much more straightforward. Basically, the process provides visibility into the performance of components through the analysis of metrics. From these metrics, developers can create visualizations and derive insights that help determine the health of the system.

Solingen, Germany-based Instana, which was founded in 2015 by Mirko Novakovic, Pete Abrams, Fabian Lange, and Pavlo Baron as a spinoff of Codecentric, sells software that leverages AI to monitor and manage the performance of apps used in microservice architectures. Instana's platform delivers 3D visualizations of performance through graphs generated using machine learning algorithms, with performance notifications generated automatically. Beyond this, the company offers an application performance monitoring solution that audits apps used in container orchestration, a modular method of providing software services.

Instana employs an agent-based approach to software monitoring. Once customers install the company's agent on their servers, it can detect and map the different components that make up these apps and map the interactions and dependencies between them in real time. The Instana suite uses all the information it gathers to automatically detect performance anomalies.

IBM says its customers will eventually be able to use Instana's observability capabilities to automate the monitoring and management of their applications in support of business goals. “With a focus on further expanding IBM's AI-powered automation capabilities, the Instana acquisition will help enterprises tackle one of their biggest challenges — the massive complexity associated with monitoring and managing the performance and uptime of business-critical applications — from mobile checkouts to online banking transactions and insurance claim forms,” a spokesperson told VentureBeat via email.

Instana has about 100 employees spread across offices in Solingen, Germany and Chicago and San Francisco in the U.S. Prior to the acquisition, the startup had raised $57 million from investors that include Meritech Capital Partners, Accel, and Target Partners. About $26 million came from investors within Germany.

IBM's purchase of Instana comes days after the company snatched up TruQua Enterprises, a “brain trust” within the IT and SAP industries that provides consulting and implementation services, in addition to technical expertise, software solutions, training, and support in the SAP environment. IBM said at the time the acquisition would enhance its capabilities in migrating financial platforms to SAP, streamlining processes in the cloud that were previously attached to legacy systems and processes.

In October, IBM announced it would double down on its cloud platform and AI while spinning off a $19 billion company — tentatively called NewCo — that will provide services to manage the infrastructure of businesses and other organizations. The divestment is expected to take effect by late 2021.

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