The Cloud

IBM Sells Software Products to HCL for $1.8B

The deal includes the Lotus Notes, Domino, and Portal products that were at one time major contributors to IBM's enterprise business.
Matthew HellerDecember 10, 2018
IBM Sells Software Products to HCL for $1.8B

IBM is selling a large part of its software portfolio to India’s HCL Technologies for $1.8 billion as it continues to focus on cloud-based enterprise solutions.

The deal includes the Lotus Notes, Domino, and Portal products that became major contributors to IBM’s enterprise business after it acquired Lotus Software for $3.5 billion in 1995.

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“Lotus Notes and Domino ranked among the top client-server groupware and email systems in the 1990s — competing head-on against Microsoft Exchange,” Channele2e said. “But while Microsoft made a successful transition to Office 365 in the cloud, Notes and Domino largely missed the cloud era.”

The other products being sold to HCL are secure app platform Appscan, device manager BigFix, Unica for marketing automation software, Commerce for omni-channel ecommerce, and Connections for workstream collaboration.

“The move makes sense for IBM, which is moving in a different direction as it develops its cloud business,” TechCrunch said. IBM’s $34 billion acquisition of Red Hat in October, it added, “shows that the company wants to embrace private and hybrid cloud deployments, and older software like Lotus Notes and Domino don’t really play a role in that world.”

John Kelly, an IBM senior vice president, noted the company had 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 Internet of Things, and financial services.

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

HCL said the products represent a total addressable market of more than $50 billion and are in large growing market areas like security, marketing, and commerce.

“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,” C. Vijayakumar, CEO of HCL, said.

Photo: Getty Images

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