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Indian giant HCL to acquire products of IBM for $1.8 billion

Hindustan Computers Limited popularly known as HCL is an Indian Multinational Corporation headquartered in Noida. Shiv Nadar founded the company as HCL Enterprises in 1976 with just 6 engineers. It went public in 1999 and currently earns annual revenue of around $8.2 billion. Over the years, it grew with its three divisions namely HCL Infosystems, HCL Technologies and HCL Healthcare. The company started with the aim of manufacturing hardware, however, over the years, it turned towards the software solutions.

[HCL Website]
Currently, HCL provides services for products, solutions, services and IP with their mode 1-2-3 strategy, which is built around digital technologies, Inter of Things IoT, cloud systems automation, cybersecurity analytics, infrastructure management and engineering services. Through their services, the company serves around 250 out of the Fortune 500 companies and around 650 out of the Global 2000 companies. These numbers reflect upon the sheer expanse of the company and it should be noted that the company employs over 105,000 people of over 140 nationalities. It has its branches in 43 countries at present.

[ReviewTech]
International Business Machines or IBM is a technology giant based out of New York, USA. The company started even prior to the World War I in 1911. Revolutionary products such as the ATM, Floppy Disk, Hard Disk Drive, DRAM, UPC Barcode, ThinkPad/ThinkCentre PC, X86 based servers and the SQL programming language trace back its origin to this company. With over a century of experience, this company has pioneered in almost every field related to computing technologies.

IBM has always been shifting its business priorities, as it tends to sell off some of their business arms, which it feels that it cannot handle well. For instance, they sold off the ThinkPad/ThinkCentre PC and X86 based servers to the Chinese computer technologies giant Lenovo in the 2000s. IBM also acquires new businesses that have high potentials such as PwC consulting, SPSS research software, The Weather Company and RedHat. Apart from these, the company also continues to design semiconductors but gives its manufacturing rights to GlobalFounders. IBM employs over 380,000 employees where they have 5 Nobel Prize winners, 6 Turing award winners and many more. They are present in over 170 companies making it one of the world’s largest technology companies.

In the first week of December this year, HCL announced the purchase of some parts of IBM for an estimated value of $1.8 billion. As per the news section on the HCL website, the proposed sections of IBM that HCL is acquiring are as follows:

  • Appscan – for secure application development
  • Bigfix – for secure device management
  • Unica – (on-premise) for marketing automation
  • Commerce – (on-premise) for omnichannel eCommerce
  • Portal – (on-premise) for digital experience
  • Notes and Domino – for email and low-code rapid application development
  • Connections – for workstream collaboration

Although IBM and HCL currently have IP partnerships for 5 of the 7 products mentioned above, they want a better management. This is the reason behind IBM selling these to HCL. Currently, IBM focuses on Artificial Intelligence AI, Hybrid Cloud Systems, Cyber Security, Analytics, Supply Chain and Block Chain. According to IBM, HCL is in a better position to carry forward the sections that they are selling to HCL. This will be one of largest acquisitions for HCL and they will be expanding their business a lot more with the new products and services from IBM. Both the companies have earned a good reputation in the market through their constant efforts to provide an excellent experience to their users.

The world is rapidly changing with the advent of technologies such as Artificial Intelligence, Augmented Reality and Deep Machine Learning. The companies leading the technology sector needs to constantly upgrade their businesses to stay relevant. The recent deal between HCL and IBM shows their efforts for continuing to excel in that sector.

– Soumya De

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