All you need to know about HCL’s acquisition of seven IBM products for $1.8 billion

HCL Technologies on Friday said it has decided to buy IBM’s software assets for $1.8 billion. Noida-based HCL, is buying seven businesses focused on markets such as e-commerce and human resources.

The transaction is expected to close by mid-2019. HCL and IBM have an ongoing partnership for five of these products. An existing licensing partnership between the two companies will continue for five of the products.

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“Pleased to announce that we are acquiring select IBM software products for $1.8B. Aligned with our Mode 3 growth story, the acquisitions are in large growing market areas including Security, Marketing & Commerce which are strategic segments for us,” the company tweeted on its official handle.

“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.

The software products in scope represent a total addressable market of more than $50 billion and 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.

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“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,” 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. 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.”

HCL Technologies has operations in 43 countries and has consolidated revenues of $8.2 billion, for 12 months ended 30th September 2018.


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