IBM Sells Software to HCL

IBM has signed a definitive agreement with HCL Technologies to acquire select IBM software products for $1.8 billion. The transaction is expected to close by mid-2019.

The software products in scope represent a total addressable market of roughly $50 billion and include:

• Appscan for secure application development.
• BigFix for secure device management.
• Unica (on-premise) for marketing automation.
• Commerce (on-premise) for omnichannel e-commerce.
• Portal (on-premise) for digital experience.
• Notes & Domino for email and low-code rapid application development.
• Connections for work stream collaboration.

HCL and IBM have an ongoing IP Partnership for five of these products. In fall 2018, IBM struck a deal with HCL to take control of development Notes & Domino, along with several other products.

“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, HCL’s chief executive officer.

“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,” he continued. “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.”

“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,” said John Kelly, IBM’s senior vice president for 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.”