IBM sells software portfolio including Notes and Domino to HCL for $1.8b

The Indian giant has claimed it is picking up products that are in large growing areas, but they also include Notes.
Written by Chris Duckett, Contributor
(Image: Getty Images)

HCL Technologies has parted with $1.8 billion to pick up a number of IBM software products. The companies said in a release that the transaction should close mid-next year, subject to regulatory approvals.

The products HCL has picked up include Notes and Domino; Connections; on-premises versions of Portal, Commerce, and Unica; BigFix; and Appscan.

"The products that we are acquiring are in large growing market areas like security, marketing, and commerce, which are strategic segments for HCL," president and CEO of HCL Technologies C Vijayakumar said.

"Many of these products are well regarded by clients and positioned in the top quadrant by industry analysts."

Vijayakumar added the company sees "tremendous potential" for creating as-a-service offerings by combining the acquisitions with its existing products.

IBM senior vice president of cognitive solution and research John Kelly said HCL is a "strong strategic fit" for the products.

"We believe the time is right to divest these select collaboration, marketing, and commerce software assets, which are increasingly delivered as stand-alone products," Kelly said.

"We believe ... that HCL is well positioned to drive innovation and growth for their customers."

IBM and HCL have entered into an ongoing intellectual property partnership for five of the products. The companies said the products have a total addressable market of $50 billion.

In October 2017, the pair entered into an arrangement that saw HCL become responsible for the development of Domino products.

In its third-quarter results released in October, IBM reported revenue of $18.8 billion, down 2 percent from a year ago, and net income of $2.7 billion, down 1 percent.

Big Blue's cognitive solutions, technology services, and cloud platforms units saw year-on-year declines.

At the end of October, IBM purchased Red Hat for $34 billion.

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