Commercial Partnership
On May 15, 2024, IBM and Palo Alto Networks announced a broad-reaching partnership to deliver AI-powered security outcomes for customers. IBM will also deliver security consulting services across Palo Alto Networks’ security platforms to drive a significant book of business in cybersecurity and AI security. The announcement is a testament to Palo Alto Networks’ and IBM’s commitment to each other’s platforms and innovative capabilities. A copy of the announcement press release is available here.

This partnership with Palo Alto Networks, reflects our commitment to partnering with industry leaders both benefitting our clients, and allowing IBM to accelerate innovation and investment data security and identity and access management.

Transaction Details
As part of this expanded partnership, Palo Alto Networks has agreed to acquire selected IBM QRadar SaaS assets, including QRadar intellectual property rights, subject to customary closing conditions, for a purchase price of approximately $500 million.

Upon closing, Palo Alto Networks and IBM will facilitate the migration of QRadar SaaS clients to Cortex® XSIAM®, the leading next-generation security operations (SOC) platform, with advanced AI-powered threat protection supported by 3,000 out-of-the-box detectors. On-premise (on-prem) QRadar clients who wish to remain on QRadar on-prem will continue to receive IBM features and support including security, usability and critical bug fixes, as well as updates to existing connectors and the ability to expand consumption. For both QRadar SaaS and on-prem clients who chose to migrate to Cortex XSIAM, the companies, along with their ecosystem of business partners, will closely collaborate to enable a smooth transfer, with IBM and Palo Alto Networks offering no-cost migration services to qualified customers. As part of this agreement, IBM will receive incremental payments from Palo Alto Networks for QRadar on-prem clients who choose to migrate to the Cortex XSIAM platform.

The sale of IBM’s QRadar SaaS assets is expected to close by the end of September 2024 and is subject to regulatory approvals and other customary closing conditions.

Revenue implications from the transaction are not expected to be material in 2024 and do not impact our guidance. Benefits from transaction proceeds are not included in IBM’s 2024 financial guidance. Additional information will be provided in IBM’s second quarter earnings release.