HCL Technologies to acquire IBM’S Software product

The country’s third largest software services firm HCL Technologies has announced on Thursday that it will acquire IBM software products for $1.8 billion.  The acquisition which is the largest in the history of HCL is expected to close by mid-2019. HCL Technology said that the product in which HCL is acquiring is in large growing market areas like securities, marketing, and commerce. The products which represent a total addressable market of more than $50 billion includes, App scan for secure application development, BigFix for secure device management, Unica for marketing automation, Commerce for omnichannel eCommerce, Portal for digital experience, Notes & Domino for email and low-code rapid application development, and Connections for work stream collaboration. HCL says that the company wants to build strategy with IBM and to develop the road maps with their clients. HCL Technologies’ investment into its IP (intellectual property) partnership with IBM has reached to around$1.5 billion.

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Chief Executive Officer of HCL, C Vijayakumar said that “The products that we are acquiring are in large growing market areas like security, marketing, and commerce which are strategic segments for HCL”. HCL believes that the Intellectual Partnership with IBM would drive a stronger long linear growth. By being merged with HCL, IBM’s software sales, which have slowed down in the past, also rose up on its latest quarterly revenue. HCL’s revenue from software business services rose about 21 percent to 87.11 billion rupees, leading the company to beat its second-quarter profit and HCL Tech shares rose as much as 6.8% intraday to Rs 943.10 per share on BSE.

In a report the senior vice president of IBM John Kelly said that “Over the last four years IBM has been prioritizing investment to develop in integrated capabilities in areas such 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 and these, are the high-value segments for the IT industry.”

IBM is also in the process of buying U.S. software company RED HAT Inc for $34 billion.

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