WORLD’S LARGEST TECH-FO­CUSED FUND

The ac­qui­si­tion of soft­ware prod­ucts, ex­pected to close by mid-2019, will rep­re­sent a total ad­dress­able mar­ket of more than $50 bil­lion, ac­cord­ing to HCL

The New Indian Express - - FRONT PAGE - ENS ECO­NOMIC BU­REAU

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IN­DIAN IT ser­vices ma­jor HCL Tech­nolo­gies an­nounced the ac­qui­si­tion of se­lect IBM soft­ware prod­ucts for $1.8 bil­lion as part of its strat­egy to strengthen its prod­ucts and plat­forms busi­ness. The ac­qui­si­tion will rep­re­sent a total ad­dress­able mar­ket of more than $50 bil­lion, ac­cord­ing to a reg­u­la­tory fil­ing by HCL.

The trans­ac­tion is ex­pected to close by mid-2019, sub­ject to com­ple­tion of ap­pli­ca­ble reg­u­la­tory re­views, HCL said in the fil­ing. The trans­ac­tion also in­cludes the trans­fer of cer­tain head­count and phys­i­cal in­fra­struc­ture.

The soft­ware prod­ucts in scope in­clude App­scan 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 work­stream col­lab­o­ra­tion.

“HCL in­di­cated that the ac­quired prod­ucts have an ad­dress­able mar­ket op­por­tu­nity of $50 bil­lion with most of the seg­ments grow­ing in dou­ble dig­its. The ac­qui­si­tion will en­able HCL to ad­dress the end-to-end mar­ket op­por­tu­nity ver­sus the pre­vi­ous li­cens­ing ar­range­ment,” wrote a JM Fi­nan­cial Re­search an­a­lyst in a note.

HCL and IBM have an on­go­ing IP Part­ner­ship for five of these prod­ucts.

“We con­tinue to see great op­por­tu­ni­ties in the mar­ket to en­hance our 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, pres­i­dent and CEO, HCL Tech­nolo­gies.

Over the last four years, IBM has been pri­ori­tis­ing in­vest­ments to de­velop in­te­grated ca­pa­bil­i­ties in ar­eas such as Ar­ti­fi­cial In­tel­li­gence for busi­ness, hy­brid cloud, cy­ber­se­cu­rity, an­a­lyt­ics, sup­ply chain and blockchain as well as in­dus­tryspe­cific plat­forms and so­lu­tions in­clud­ing health­care, in­dus­trial In­ter­net of Things, and fi­nan­cial ser­vices.

“We be­lieve that the time is right to di­vest these se­lect col­lab­o­ra­tion, mar­ket­ing and com­merce soft­ware as­sets, which are in­creas­ingly de­liv­ered as stand­alone prod­ucts. At the same time, we be­lieve that these prod­ucts are a strong strate­gic fit for HCL, and that HCL is well-po­si­tioned to drive in­no­va­tion and growth for their cus­tomers,” said John Kelly, IBM se­nior vice-pres­i­dent, Cog­ni­tive So­lu­tions and Re­search.

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