HCL Technologies to acquire seven IBM software assets for $1.8 billion

HCL Technologies, Prateek Aggarwal, HCL Technologies CFO, HCL Tech, Hindustan Unilever, Shiv NadarThe deal is part of IBM’s efforts to focus more on cloud computing. (Reuters)

HCL Technologies, India’s third-largest information technology services company, has agreed to acquire some software assets from IBM for $1.8 billion, in one of the biggest acquisitions by an Indian IT firm. As part of the deal, HCL is buying IBM’s seven businesses focused on markets such human resources and as e-commerce, the company said in a statement, adding that software products it is buying represent a total addressable market of more than $50 billion.

“The time is right to divest these select collaboration, marketing and commerce software assets, which are increasingly delivered as stand-alone products,” said John Kelly, a senior vice president at IBM. On the other hand, the ongoing licensing pact between the two firms will continue for five of these products. The deal is part of IBM’s efforts to focus more on cloud computing.

ALSO READ I Share Market Live updates

The products include Unica (on-premise) for marketing automation, Appscan for secure application development, BigFix for secure device management, Commerce (on-premise) for omnichannel eCommerce, Portal (on-premise) for digital experience, Connections for workstream collaboration, and Notes & Domino for email and low-code rapid application development. The transaction is expected to be completed by mid-2019.

IBM is in the process to strengthen its presence in the hybrid cloud market, which combines software and services delivered over the public internet with similar offerings run on companies’ own servers and data centres. In October this year, IBM agreed to acquire Red Hat Inc., a specialist in this area, for a whopping $33 billion.