IBM snaps up Hakkoda for AI consultancy clout

IBM is continuing to add to its AI arsenal with the acquisition of consultancy Hakkoda.

IBM said it had acquired Hakkoda to build out its “data transformation services portfolio”, gaining the company’s experience in “migrating, modernizing, and monetizing data estates”.  

IBM also highlighted the appeal of Hakkoda’s genAI portfolio for data modernisation work; its prescience in key verticals including healthcare and life sciences, financial services, and the public sector; and its expertise around data-and-AI platform Snowflake, as drivers for the acquisitions.

New York-headquartered Hakkoda was founded in 2021 and now has over 300 employees across EMEA, India, and Latin America.

“IBM brings the kind of scale that allows us to dream bigger and move faster… their relationships with the largest cloud platforms in the world open new doors that would take us years to unlock alone,” Erik Duffield, the CEO of Hakkoda wrote in a blog. “Our commitment to Snowflake remains unwavering”, he added.

IBM and Hakkoda “a great match”

Chris Barbin, CEO of tech investment and advisory company Tercera, which invested in Hakkoda, described the detail as “a great match for both companies”.

“Hakkoda’s deep-rooted partnerships with data platform providers like Snowflake, its industry depth, and its asset-embedded delivery model will extend IBM’s already rich portfolio of data and AI services. On the flip side, Hakkoda now has a global platform that will allow them to expand into new verticals and regions, and stay on the leading edge of data and AI,” he wrote.

The financial terms of the deal, announced last week, have not been disclosed.

Why AI is so crucial in how IBM makes its money

According to IBM’s 2024 Annual Report, consulting is now behind around 80% of the company’s AI bookings. And 80% of its revenue comes from customers who buy across all three of its business segments: software, infrastructure and consulting.

In its most recent quarterly earnings report, IBM said consulting accounted for around $5 billion of its $17.6 billion revenue, down 1% compared to the same quarter the year before.

Hakkoda is the second consultancy business IBM had acquired this year, having snapped up Oracle consultancy Applications Software Technology in January.

Big Blue also been expanding its AI capabilities through acquisition elsewhere:  last month, it announced its intention to buy AI data wrangler Datastax.

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