IBM’s Apptio unit tests AI tool trained to tackle rising IT costs

Dive Brief:

Apptio, an IBM company, says it’s testing a new artificial intelligence tool designed to support professionals, including corporate finance leaders, who play a key role in managing their organization’s cloud-related costs.
The AI assistant will be available as a beta product in the second half of the year, according to a recent Apptio blog post.
“It’s currently in the preview stage for early customers,” Bill Lobig, vice president of product management for IBM Automation, said in an interview.

Dive Insight:

The effort comes as many finance leaders are grappling with out-of-control cloud expenses.

Worldwide end-user spending on public cloud services is forecast to grow 20.4% to total $678.8 billion in 2024, up from $563.6 billion in 2023, according to Gartner.

Nearly three-quarters of organizations exceeded their cloud budgets in 2023, according to a Forrester report released in April.

Lobig said the challenge is fueling a growing market, as more and more companies turn to cloud optimization software vendors like Apptio, which was acquired by IBM last year for $4.6 billion.

Apptio is part of a community of organizations that are particularly focused on advocating the adoption of FinOps, a combination of “finance” and “DevOps.” The comprehensive approach — as outlined by the FinOps Foundation, a nonprofit trade group — includes an emphasis on collaboration among IT and finance teams, as well as data-driven decision making.

“The Cloud FinOps community has grown exponentially since the launch of the FinOps Foundation in 2019,” the foundation said in a February article. “Tens of thousands of people now manage the value of cloud for their organizations, and participate with fellow practitioners, supporting members, and cloud providers who make up the Cloud FinOps community.”

Cloud FinOps is now “an established part of many organizations’ digital strategies, with 96% of the Fortune 50 participating in FinOps Foundation programs,” the article said.

The organization is comprised of companies and certified practitioners that promote the FinOps discipline. The members include Apptio, as well as cloud providers Microsoft, Amazon and Google.

Apptio said its new AI assistant will provide users with “relevant information and answers to questions directly from within our products.”

“Now, what we’re doing is adding generative AI capabilities, so that instead of having to drill down into the analytics and find that one piece of information you’re looking for, you can simply ask a question and get a response,” Lobig said.

He said Apptio’s virtual assistant has passed the exam that practitioners must take to become FinOps-certified, and the chatbot is capable of answering questions such as: “What are my top five contributors to spend?”

Companies activating a FinOps model using AI-powered software are 53% more likely to report an overall cost savings of greater than 20%, according to survey findings published last October by technology expense management services provider Tangoe.

“Reliance on cloud services is nearly universal, but for companies to achieve cloud ROI, they must quickly gain complete visibility into service utilization and be able to precisely match cloud resources with business needs in order to reduce unnecessary spending,” Tangoe CEO James Parker said in a press release at the time.