My thoughts on the HCL – IBM deal
The news came out a few days, it is no longer a novelty of the last moment but what I would like to report here is not the news but some considerations that have arisen in the last days.
So, summing up, IBM sold Notes, Domino and Connections to HCL for $ 1.8 billion.
Together with these three softwares, the agreement between IBM and HCL also provides for the transfer of other packages, so the complete list is this:
Appscan for the development of secure applications
BigFix for the safe management of devices
Unica (on-premise) for marketing automation
Commerce (on-premise) for omni-channel eCommerce
Portal (on-premise) for the digital experience
Notes & Domino
Connections
Everything will become effective starting (probably) from mid-2019.
This is the news bare and raw. Things of this type happen regularly, IBM has shown this with the acquisition of RedHat just recently (and for much larger figures).
IBM itself had not invented Notes but acquired it in 1995 incorporating Lotus Development for the sum of 3.5 billion dollars.
And already here one thing springs to mind: acquiring Lotus in reality IBM had not brought only the groupware with Notes and Domino, but also the spreadsheet 1-2-3 inside what was called Smartsuite: products that have disappeared but that they had their own installed base and a certain number of users.
1-2-3 was for a long time the most used spreadsheet before being discarded by IBM.
Of course, the acquisition of Lotus was only completed to have Notes and Domino, software on which IBM was aiming a lot and that were in sharp ascent.
But then we all know how things went, especially in recent years when IBM seemed to forget about having this software in its portfolio, not only on the side of new developments but also (or above all?) as far as marketing and commercial proposal were concerned.
However, we are still struck by the fact that what was bought for 3.5 billion in 1995 is now resold within a broader agreement for 1.8 billion.
The announcement of the sale itself does not surprise me: for months IBM and HCL had established a partnership for the development of Notes & Domino. The development of Watson and the purchase of RedHat had amply demonstrated towards which front was moving IBM. Perhaps what amazes us is the speed with which they moved from the partnership to the sale of the product.
Here we come to HCL: certainly their entry into the field has brought in recent months a series of innovations and an air of renewal. A new version of Domino has been released, they are working on the new version of the Notes client, and there is a Notes client for the iPad.
In short, there is an air of renewal and a new enthusiasm that have been missing for some time. Now it will be important that this enthusiasm is maintained and that, with the acquisition of other products, we move towards a global vision and strategy.
I would not be surprised, for example, if over time Domino and Connections converge more and more, perhaps becoming a single product or in any case have many more points of contact.
So I think this acquisition can only bring benefits for those who work with Domino: new enthusiasm, new releases, new features. In short, new life.
Of course, many questions remain open today. There are a number of aspects on which nothing is yet known. For example, how will the situation evolve for those (like us) who are now IBM Partners for collaboration packages (ICS – IBM Collaboration Solutions) or what will be the new licensing policy chosen by HCL.
Or, going into details, what will happen for example to all the IBM discussion forums on products like this: they contain a veritable flood of information and knowledge that I hope HCL will take home and continue to make available to everyone.
I even wondered if HCL along with the software packages has also acquired the Lotus brand and can thus return to commercialize this brand: it may not be such a peregrine idea. Many people still refer to the two products as “Lotus Notes” and “Lotus Domino”; the real name “IBM Notes” is much less used. In addition, the return of yellow (replacing the IBM blue) in the brand and communications in recent months could lead one to think this.
It is certainly too soon to understand what and above all how it will happen, for the moment we can only remain at the window to observe.
Sharon James
11th December 2018 - 19:14
What I am super interested in – is where HCL will take Commerce. There is a still a huge install base of Commerce and its a very good solution that works and has been continually been worked on and had new releases from IBM. It made sense for it to be part of the HCL deal as they have already bought Portal and with Connections and Commerce now going to HCL too they own all 3 Websphere based solutions.
I will be following this closely 🙂
Scott Skaife
12th December 2018 - 19:43
The point about going from partnership to sale so quickly has sparked a thought on what could have been the reason this happened so quickly….
If 24 months ago, I were looking to buy Notes/Domino, I would be hesitant. The fact that IBM had clearly abandoned development and I was a foreign company that most people have not heard of would scream that the product was ‘Legacy’, and that the purchasing company was the enterprise version of GOG.com. Customers would assume not only would new development not be done, but that the purchasing company wouldn’t even be able to do maintenance on the product.
If I were a company like… say… HCL and I wanted to buy a product like Notes/Domino from IBM, I would want IBM to declare the product to be alive and well before spending almost $2 billion for it. Enter the “partnership”. IBM announces that they were are now in a development partnership with HCL. HCL cranks down and releases a new version under the IBM brand name, and the public face now shows Notes/Domino to be a living product. The sale to HCL now is a sale of a living product to the company that is the current developers of the newest version. This kills much of the fear that HCL isn’t capable of developing the product before the sale. HCL gets a more valuable product, (living application with a recent release vs. zombie product that was abandoned years ago) and IBM has a more valuable product to sell.
This may just be the conspiracy theorist in me, but my guess is that the sale was hammered out and ready to go before the HCL/IBM partnership announcement was made. IBM probably go ~10% more for Notes/Domino by sitting on ownership as a “partner”. HCL on the other hand likely received a software package that was worth 4x what it would have been worth if they had just purchased it without the “partnership” deal.
As users and developers, we can view the “partnership” period as a kind of probation period. With the release of v10, HCL has passed their probation and is ready to have the torch passed to them.
roberto
12th December 2018 - 20:09
Maybe you are right, but I guess we’ll never know.
Kevin Pettitt
12th December 2018 - 22:08
Roberto, good post. I had also been wondering about the possibility of a resurgent “Lotus” brand (which would be super convenient for me personally as well 🙂 ).
Would make a lot of sense insofar as HCL have almost no brand equity at this point. And I think any downsides associated with the Lotus brand would be outweighed by the compelling comeback story that could be easily woven by talented marketers. The earned media (i.e. free coverage in the news) resulting from that story would be worth many millions.
Richard Moy
13th December 2018 - 17:29
Scott,
I think that was the plan. It is good for IBM and HCL.