Databricks says Apache Flink is optional; IBM paid $11 billion for Confluent, the company that sells it
On October 29, 2026 Databricks made Spark Real-Time Mode generally available, writing that it removes the need for Apache Flink, the engine that turns Kafka's event log into live decisions, and claiming to be up to 92% faster than Flink on customer workloads. IBM paid about $11 billion in March for Confluent, the company that sells Flink, and its software growth last quarter leaned on that purchase.
Vincent Jiang · 3 min read
Databricks$216.58B — Databricks, private, latest valuation $216.58B made Spark Real-Time Mode generally available on October 29, 2026, and named the casualty in writing: the mode "eliminates the need for separate specialized engines such as Apache Flink" and is "up to 92% faster than specialized engines like Flink" on customer feature-computation benchmarks 1.
Flink is the open-source engine that processes data streams as they arrive, sold by Confluent beside Kafka, the open-source event log most large companies pipe their data through; IBM−0.81% — IBM, down 0.81 percent today paid about $11 billion for Confluent in March 3. IBM's finance chief said third-quarter software revenue grew 9% at constant currency, "over four points" organic, the rest from acquired businesses such as Confluent 2: about five of nine points were bought, not grown.
IBM bought growth, then spent the week defending it
Confluent's last standalone year brought $963 million of revenue and a $345 million net loss 4. On October 28 IBM shipped watsonx.data integration for Apache Flink, carrying the drag-and-drop authoring of its cloud data platform, watsonx.data, onto the Confluent runtime, to spread Flink past "a relatively small group of specialists" 5.
A day later Databricks declared the engine optional, claiming up to 100 times its old micro-batch speed 1. The same day, SAP+1.23% — SAP, up 1.23 percent today folded Databricks' Lakeflow, Lakebase and Unity Gateway into its Business Data Cloud as "SAP Databricks," beside its own lakehouse expansion on Dremio's federated query engine, which reads data where it sits 6.
The engine is the target, not the log
Databricks still reads Kafka: its feature store moves events from Kafka into an online store at a p99 of 200 milliseconds, the slowest 1% of requests 1. Nothing this week attacks the log. What Spark claims is the stateful layer above it, the one Confluent sells as Flink, and IBM's own announcement concedes that layer "struggles to extend beyond a core streaming team" 5. "Transactions happen in milliseconds, and AI decisions need to happen just as fast," said Rob Thomas, IBM's chief commercial officer, at closing 3.
Total growth runs below the pace the price needs
IBM's total revenue growth ends at 4.7%, below the 8.5% pace its price needs
Data
| Total revenue growth, y/y | |
|---|---|
| Q4 '24 | 1% |
| Q1 '25 | 0.5% |
| Q2 '25 | 7.7% |
| Q3 '25 | 9.1% |
| Q4 '25 | 12.1% |
| Q1 '26 | 9.5% |
| Q2 '26 | 1.1% |
| Q3 '26 | 4.7% |
Total revenue grew 4.7% in the third quarter against software's 9% at constant currency 2. The line dips to 1.1% in Q2 2026, Confluent's first full quarter inside IBM: a business at about $1 billion of annual revenue 4 adds only one and a half points to an IBM quarter, so on that arithmetic the rest of IBM shrank slightly.
The dashed line is Trefis arithmetic, an estimate, not guidance: revenue growing 8.5% a year for three years would leave shares about 18.8% higher before dividends 2. The stock returned 17.4% from September 30 to October 29 against 1.0% for the S&P 500; holders are still down 15.2% for the year 2.
No filing splits Kafka revenue from Flink; Confluent passed $1 billion in annual recurring revenue before the sale 7.
January's organic line settles it
IBM's fourth-quarter report, expected in January 2027, carries management's first numbers on 2027 2. Watch the organic slice of software growth, not the 9% headline 2. This began as a data-freshness story (The Inference, October 26); it is now a fight over the engine layer 2. Databricks kept the log and called the engine optional; January tells IBM what that costs.
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