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HCL picks up Notes, spanks total of $1.8bn at Honest John's IBM software sale

Don't worry, Red Hat. We're sure Big Blue will love you more than it did Lotus

Indian software outfit HCL Technologies is snapping up $1.8bn worth of IBM's software in a deal expected to close by the middle of 2019.

The acquisition, worth just under 5 per cent of a RedHat in IBM parlance, will see the Uttar Pradesh-based company absorb secure app platform Appscan and device manager BigFix. On-premises marketing automation will come courtesy of Unica, eCommerce from Commerce and a Portal digital experience is also included. Connections (for workstream collaboration) is also being handed over.

It is quite a stuffed shopping basket, and is rounded out by everyone's favourite unexpected item in the bagging area, Notes and Domino.

HCL reckons the line-up represents a total addressable market of more than $50bn. It has certainly paid less than IBM shelled out for the software in the first place – Big Blue paid $3.5bn ($5.8bn in today’s money) for Lotus (which brought Notes and Domino into the fold) back in 1995. With the price of other, more recent, acquisitions, such as the 2010 Unica buy, clocking in at $480m, the gang at Armonk, New York, have failed to add much in the way of value for reselling purposes.

It could be that HCL has struck a canny deal. The Indian outfit's shareholders, however, seem to disagree and have reacted negatively to the software purchase with shares dropping 5 per cent at time of writing.

A long and winding road

It is the latest twist in the tortured path trod by the Notes and Domino email, messaging and collaboration platform, which has languished at the hands of IBM. Calls to open-source the thing back in 2008, in order to keep it relevant, fell on deaf ears. HCL signed up to partner with IBM to run the suite in 2017 and things seemed to perk up earlier this year with the release of version 10 and a promise of version 11.

Now, it would seem, IBM has thrown in the towel. Presumably to get properly snuggly with its new love, Red Hat, which will be looking at the Lotus experience with not a little trepidation.

Sliding shares aside, C Vijayakumar, president and CEO of HCL Technologies, professed himself chuffed with his purchase, and reckoned that the software would be a good fit for HCL's security, marketing and communication strategy. ®

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