Technology giant HCL Tech on Friday announced a definitive agreement under which HCL will acquire select IBM software products for a staggering amount of USD 1.8 billion.
The transaction is expected to close by mid-2019, subject to completion of applicable regulatory reviews.
The software products in scope represent a total addressable market of more than USD 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 e-commerce, Portal (on-premise) for digital experience, Notes and Domino for email and low-code rapid application development, and Connections for workstream collaboration.
HCL and IBM also have an ongoing IP partnership for five of these products. In a statement released by the company, the President and CEO, HCL Technologies said they are focusing on seeing greater opportunities in market to enhance their Mode-3 (Products and Platforms) offerings.
He also mentioned, “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.”
He 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”.
IBM 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.”
He further said, “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.”