HCL acquires a chunk of IBM for $1.8bn

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IBM and HCL have signed a definitive agreement under which HCL will acquire select IBM software products for $1.8 billion. The transaction is expected to close by mid-2019, subject to customary regulatory reviews.

The software products in scope represent a total addressable market of more than $50 billion, according to a statement by the companies.

The portfolio includes:

  • Appscan (application development),
  • BigFix (device management),
  • Unica (on premise, marketing automation),
  • Commerce (on-premise, omni-channel e-commerce),
  • Portal (on-premise, digital experience),
  • Notes & Domino (email and low-code application development),
  • Connections (workstream collaboration).

The acquisition is reportedly the biggest acquisition in India’s IT services sector, and the 10th largest in India’s corporate history.

“We continue to see great opportunities in the market to enhance our Mode-3 (Products and Platforms) offerings. The products that we are acquiring are in large growing market areas like Security, Marketing and Commerce which are strategic segments for HCL. Many of these products are well regarded by clients and positioned in the top quadrant by industry analysts.” said C Vijayakumar, president & CEO, HCL Technologies. He further added, “We see tremendous potential for creating compelling ‘as-a-service’ offerings by combining these products with our Mode-1 and Mode-2 services”.

“Over the last four years, we have been prioritizing our investments to develop integrated capabilities in areas such as AI for business, hybrid cloud, cybersecurity, analytics, supply chain and blockchain as well as industry-specific platforms and solutions including healthcare, industrial IOT, and financial services. These are among the emerging, high-value segments of the IT industry,” said John Kelly, IBM senior vice president, Cognitive Solutions and Research. “We believe the time is right to divest these select collaboration, marketing and commerce software assets, which are increasingly delivered as stand-alone products.”

[Image courtesy: HCL Technologies]