December 10, 2018

HCL to acquire select IBM software products for $1.8 billion in biggest Indian IT deal


In what can be seen as the biggest Indian IT deal to date, IBM and HCL Technologies (HCL) announced on December 7 a definitive agreement under which HCL will acquire select IBM software products for $1.8 billion.

The select software products referred to above include: Appscan for secure application development; BigFix for secure device management; Unica (on-premise) for marketing automation; Commerce (on-premise) for omni-channel eCommerce; Portal (on-premise) for digital experience; Notes & Domino for email and low-code rapid application development; and Connections for workstream collaboration. These products represent a total addressable market of more than $50 billion.

As per a Press Release issued by the company, with regard to the deal, HCL’s President & CEO C Vijayakumar said, “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”.

Vijayakumar further added, “The large-scale deployments of these products provide us with a great opportunity to reach and serve thousands of global enterprises across a wide range of industries and markets. I am confident that these products will see good growth trajectory backed by our commitment to invest in product innovation coupled with our strong client focus and agile product development. In addition, we see tremendous potential for creating compelling ‘as-a-service’ offerings by combining these products with our Mode-1 and Mode-2 services”.

Subsequently, IBM’s Senior Vice President, Cognitive Solutions and Research, John Kelly said, “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. As a result, IBM is a leader in these segments today”.

Kelly concluded, “We believe the time is right to divest these select collaboration, marketing and commerce software assets, which are increasingly delivered as stand-alone products. At the same time, we believe these products are a strong strategic fit for HCL and that HCL is well positioned to drive innovation and growth for their customers.”

Notably, as per the Release, the transaction is expected to close by mid-2019, subject to completion of applicable regulatory reviews.

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