Apptio founder Sunny Gupta sells his startup to IBM for $4.6 billion

Sunny Gupta, Co-founder and CEO, Apptio

Sunny Gupta, co-founder and chief executive of Apptio, is having a homecoming of sorts. The software-as-a-service (SaaS) company made headlines on June 26 after the technology giant IBM announced that it had inked a definitive agreement to acquire the firm for a whopping $4.6 billion. The deal will mark the return of Gupta to IBM, where he began his career in 1992.

Gupta, 53, a successful serial Silicon Valley entrepreneur with four startups to his credit, has come a long way. He was born in Chandigarh — his father was an IAS officer who served as the secretary of education in the Indian government, while his mother hailed from a family of entrepreneurs.

From an early age — when he was seven or eight — he found the world of entrepreneurship intriguing, and felt it would allow him to control his own destiny. And indeed, he went on to do that. In a 2013 interview with The New York Times, Gupta noted that his two brothers and he were all running their own successful companies.

With just $2,000 and a plane ticket, he moved to the US in 1989 to pursue a higher education course at the University of South Carolina. “I felt like I needed to go to the US because everybody said, ‘You can start from nothing and create something.’ India was not that way at the time, though it has changed a lot now,” he told NYT back then.

Despite getting a partial scholarship, Gupta had to work odd jobs to get by. He washed dishes and even worked as a mover, but ultimately got a full scholarship thanks to hitting the books hard. Gupta then interned for the president of the university.

Rise of the entrepreneur

In 1992, Gupta started his career as a software developer in IBM. As the years passed, he found himself stuck in the rut of a corporate job. He was fed up with the bureaucratic and not-so-transparent work culture and the slow career progression it brought.

“I really felt that I could do my boss’s boss’s job. Yes, you don’t know what you don’t know, but I just had this strong conviction within me,” he said.

In 1996, he started his first venture, Vigor Technology, an enterprise software-focused tech startup. Gupta didn’t draw any salary for the first six to nine months, a pattern that would be repeated in all of his future startups.

“It was probably the easiest decision of my life to start my own company,” he said.

The startup was soon sold to Rational Software for $3-4 million, according to a 2019 article by YourStory. Later, this business was sold to IBM for a couple of billion dollars. His second startup, Performant, a software firm helping Fortune 500 companies identify website performance issues, was acquired by another large enterprise software company named Mercury.

Gupta launched his third startup, iConclude, which offered software solutions to solve technical issues at data centres, in 2005. By 2007, it was sold to Opsware, a larger data centre automation software provider. This venture at that time had $2 million in revenue and was acquired for $70 million. Opsware, in turn, was acquired that same year by HP for $1.65 billion.

The Apptio imperative

The exit from iConclude had a profound impact on Gupta as he thought long and hard over whether to sell the company, he told YourStory in 2019. It felt like an unfinished business, so when he decided to start up Apptio in 2007, Gupta decided he would either “go big or go home” and build something for the long term.

Apptio, which he started with co-founder Kurt Shintaffer, is a cloud-based Technology Business Management (TBM) software provider. The company’s LinkedIn page currently has over 1,400 employees globally, including in India.

By 2016, Apptio had raised $136 million in funding and opted to go public through a listing on the NASDAQ. Within two years, private equity firm Vistas Equity Partners acquired the company for $1.94 billion, and delisted it.

Gupta and his management team continued at Apptio after the acquisition. Going private again would only help the company grow faster, he felt. “We get to go private and we get to accelerate growth in the private markets, which sometimes can be harder to do in the public markets because of the fickleness or whatever may happen in the public market,” Gupta had said during an interaction with GeekWire in 2018.

The biggest highlight for the company came when IBM decided to acquire it for $4.6 billion this year, for more than double what Vistas paid just four years ago. Today Apptio has over 1,500 clients, and is serving more than half of the Fortune 100.

IBM believes the acquisition will advance its IT automation capabilities and help clients by optimising their technology spend and budgets amidst a tough macro environment. “Apptio will bring to IBM $450 billion of anonymized IT spend data, unlocking new insights for clients and partners,” the company said in its statement.

While Gupta and his team appear to be continuing at IBM for now, given his track record, the serial entrepreneur may well embark on a new journey soon, on yet another startup adventure.