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LOT-406 IBM Notes & Domino 9.0 Social Ed. System Admin A

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LOT-406 exam Dumps Source : IBM Notes & Domino 9.0 Social Ed. System Admin A

Test Code : LOT-406
Test denomination : IBM Notes & Domino 9.0 Social Ed. System Admin A
Vendor denomination : IBM
: 114 true Questions

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IBM IBM Notes

Why Did IBM promote Lotus and other utility products to HCL? | killexams.com true Questions and Pass4sure dumps

IBMIBM beefed up its traffic collaboration providing today with an acquisition of XCC. picture: Michael Coté

earlier this month, IBM and HCL announced a deal worth $1.eight billion, wherein HCL will buy a bunch of IBM software items. The transaction, anticipated to nearby mid-2019, addresses a viable market of more than $50 billion. The products encompass:

  •  Appscan for cozy software building.
  •  BigFix for cozy apparatus administration.
  •  Unica (on-premise) for advertising and marketing automation.
  •  Commerce (on-premise) for omnichannel eCommerce.
  •  Portal (on-premise) for digital journey.
  •  Notes & Domino for email and low-code quick software development.
  •  Connections for workstream collaboration.
  • HCL and IBM absorb existing partnerships for five of these items, two of which can live core to the a brace of traffic digital workplaces that absorb invested in Notes, Domino and Connections. The ecommerce providing is too a key utility for many. “The products they are acquiring are in giant growing market areas dote safety, advertising and marketing and commerce, which can live strategic segments for HCL. a lot of these items are smartly considered by way of customers and positioned in the perquisite quadrant by traffic analysts,” HCL president and CEO C Vijayakumar pointed out in a statement. “The huge-scale deployments of those products provide us with a much probability to gain and serve heaps of world organisations throughout a wide purview of industries and markets."

    youngsters, the query bar nonexistent and sundry is asking is why did IBM sell, in view that during the last five years it has never overlooked an opening to flaunt its software credentials? The sale was introduced not lengthy after huge Blue purchased crimson Hat for an fabulous $34 billion, leaving many to request yourself if the HCL deal may live a means to cover a tiny Part of the charge. in bar nonexistent probability, but that doesn’t address the foremost issues and upheaval that IBM has been facing over the final three years.

    related Article:  6 issues to learn about IBM's $34B Acquisition of red Hat

    promoting Legacy utility

    Tony Byrne, analyst and founding father of true narrative group, has been observing and writing about a lot of these apparatus for the previous 15 years. In his company weblog, he outlined 4 take-aways from the deal:

  • Declining toolsets: RSG evaluates a number of of these choices and they bar nonexistent had this in commonplace, they are by and big legacy offerings, in lengthy-time age decline, in keeping with Byrne.
  • cash in legacy: there is a traffic mannequin round buying growing dilapidated platforms and housing them more or less to their demise. This will too live very ecocnomic.
  • Licenses: It isn't limpid that HCL in reality knows how to execute easily on the license mannequin that IBM has used. among different things, will they now freeze out competing integration companions? 
  • strains continue to blur: the line between giant outsourcing/integration organisations and conventional utility carriers has been getting blurry, and this simply continues that trend. capabilities businesses are envious of the habitual salary streams that companies see, exceptionally with newfangled cloud fashions. 
  • MarketsandMarkets, a earnings repercussion analysis and advisory enterprise concentrated on excessive-growth niche markets, stated that HCL’s purpose is to stream faraway from a labor-intensive utility capabilities company to an intellectual property (IP)-driven traffic the consume of the IBM items. The result is that IBM’s historic salary coalesce has become HCL’s newfangled revenue mix.

    despite the fact, HCL administration has a vast project ahead proving it may turn the bought items of IBM perquisite into a profitable funding for its stakeholders.

    related Article:  How Will the $34B IBM Acquisition impress pink Hat clients? 

    Declining Revenues

    Francois Koutchouk is one of the original participants of the Lotus Notes engineering group fashioned in 1989. As a groupware evangelist, product supervisor and expertise accomplice recruiter, he had direct visibility into most tremendous agencies adopting Notes. Koutchouk stayed with IBM as a consultant after the acquisition, he then moved on to attend groups gain off Lotus Notes.

    Koutchouk famous one wonderful competencies of Lotus Notes is its resiliency: servers and customers flee unattended for years. as a result, many customers easily opted to stop paying IBM for upgrades and aid expenses. Most additionally iced over evolution of Notes apps, drying out associated revenues for outside consultants dote IBM world capabilities and IBM partners.

    For neatly over 10 years most giant corporations absorb feverishly tried to circulate away from Notes. From an estimated 10 million apps at its height, the first seven years noticed a reduction to 2 million or so apps — by and big through attrition and facile migrations to Microsoft SharePoint. The remaining apps are the most useful, extra intricate and more durable to migrate due to the pleasing and proprietary expertise powering Notes. “What IBM didn't order HCL is that the remaining few years absorb seen the apparition of recent structures enhanced faultless emigrate Lotus Notes apps and its clients, corresponding to Salesforce and Microsoft PowerApps,” he spoke of. “This, mixed with newfangled applied sciences to automate migrations, is dropping the weigh (and value) of ultimate apps at an unprecedented expense. IBM is offloading Lotus Notes because $1.8 billion is some huge cash for an site in ground racing to zero revenues in just a few years."


    IBM promoting Lotus Notes/Domino company to HCL for $1.8B | killexams.com true Questions and Pass4sure dumps

    IBM introduced remaining night that it's promoting the closing add-ons from its 1995 acquisition of Lotus to Indian arduous HCL for $1.8 billion.

    IBM paid $3.5 billion for Lotus back within the day. The big items listed here are Lotus Notes, Domino and Portal. These absorb been a huge a Part of IBM’s enterprise traffic for a long time, but ultimate year massive Blue bar nonexistent started to draw back, promoting the building part to HCL, whereas retaining control of sales and advertising and marketing.

    This announcement marks the finish of the road for IBM involvement. With the evolution of the platform out of its handle, and in want of cash after spending $34 billion for pink Hat, in bar nonexistent probability IBM without hardship decided it not made feel to support any a Part of this in-residence.

    As for HCL, it sees an opening to continue to build the Notes/Domino business, and it’s seizing it with this buy. “The significant-scale deployments of these items give us with an excellent probability to gain and serve hundreds of world organizations throughout a wide purview of industries and markets,” C Vijayakumar, president and CEO at HCL technologies, mentioned in a press release saying the deal.

    Alan Lepofsky, an analyst at Constellation research who keeps near watch on the enterprise collaboration area, says the sale could characterize a spotless birth for application that IBM hasn’t definitely been paying shut consideration to for some time. “HCL is far more interested in Notes/Domino than IBM has been for a decade. they are investing closely, making an attempt to rejuvenate the company,” Lepofsky advised TechCrunch.

    while this software may additionally admiration lengthy within the tooth, Notes and Domino are nevertheless in consume in lots of corners of the business, and here is very proper in EMEA (Europe, middle East and Africa) and AP (Asia Pacific), Lepofsky referred to.

    He brought that IBM appears to live fully exiting the collaboration space with this sale. “It looks that IBM is executed with collaboration, out of the video game,” he noted.

    This flood makes feel for IBM, which is stirring in a special path as it develops its cloud company. The purple Hat acquisition in October, in specific, indicates that the traffic desires to involve deepest and hybrid cloud deployments, and older utility dote Lotus Notes and Domino don’t really play a job in that world.

    The deal, which is subject to regulatory approval methods, is expected to near within the core of next year.


    IBM Sells Notes, Domino and Portfolio of commercial enterprise Apps To HCL for $1.8B | killexams.com true Questions and Pass4sure dumps

    domestic   →   information   →   IBM Sells Notes, Domino and Portfolio of enterprise Apps To HCL for $1.8B Posted December 19, 2018 with the aid of Sean Michael Kerner     remarks

    IBM obtained Lotus utility returned in 1995 for $3.5 billion. it live now divesting the know-how, together with six other one-time cornerstone enterprise functions.

    There changed into a time when Lotus Notes and Domino were the cornerstones of IBM's application portfolio, enabling enterprise collaboration and productiveness. these days are actually in the past, as IBM is divesting these property, together with a few different functions, to HCL technologies.

    HCL applied sciences will pay IBM $1.eight billion, with the deal anticipated to shut in mid-2019. in addition to Notes and Domino, HCL is acquiring a brace of other traffic functions, including: Appscan for comfy utility construction, BigFix for relaxed machine administration, Unica (on-premises) for marketing automation, Commerce (on-premises) for omni-channel eCommerce, Portal (on-premises) for digital journey, and Connections for workstream collaboration.

    "We believe the time is arrogate to divest these opt for collaboration, advertising and marketing and commerce application assets, which can live more and more delivered as standalone products," John Kelly, IBM senior vp, Cognitive solutions and analysis, wrote in a media advisory. " on the very time, they correspond with these products are a powerful strategic hale for HCL, and that HCL is smartly placed to force innovation and increase for his or her purchasers."

    IBM has more and more been entering into cloud and synthetic intelligence over the last 4 years, and has developed up different assets that it will focal point on.

    functions

    most of the functions being sold to HCL were initially acquired via IBM from different providers.

    IBM bought Lotus utility, maker of Notes and Domino, in 1995 for $3.5 billion, though the Lotus company wasn't dropped through IBM unless 2012.

    AppScan which is now being sold to HCL, turned into once the cornerstone of the IBM Rational application portfolio. IBM acquired the AppScan product portfolio as a Part of the acquisition of protection supplier Watchfire in June 2007.

    BigFix was got by way of IBM to become Part of its Tivoli operations division in July 2010, whereas Unica turned into obtained via IBM in August 2010 for $480 million.

    HCL technologies

    HCL technologies is based mostly in Noida, India, and positions itself as a digital transformation company. HCL and IBM had already been partnering on many of the obtained software property.

    "We continue to see high-quality alternatives available in the market to increase their Mode-three (products and platforms) offerings," C Vijayakumar, President & CEO, HCL applied sciences, wrote in a media advisory. "The items that we're acquiring are in huge growing to live market areas dote safety, advertising and Commerce, which might live strategic segments for HCL. many of these products are well considered through valued clientele and placed in the excellent quadrant by way of traffic analysts."

    Sean Michael Kerner is a senior editor at EnterpriseAppsToday and InternetNews.com. comply with him on Twitter @TechJournalist.


    LOT-406 IBM Notes & Domino 9.0 Social Ed. System Admin A

    Study guide Prepared by Killexams.com IBM Dumps Experts


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    LOT-406 exam Dumps Source : IBM Notes & Domino 9.0 Social Ed. System Admin A

    Test Code : LOT-406
    Test denomination : IBM Notes & Domino 9.0 Social Ed. System Admin A
    Vendor denomination : IBM
    : 114 true Questions

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    IBM Notes

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    Alas, destitute Lotus/IBM Notes, they knew ye well | killexams.com true questions and Pass4sure dumps

    dolphin-hotel-lotusphere-20126719572287l.jpg Every year, in January, the Notes and Domino true made the annual pilgrimage to Orlando and the Dolphin Hotel. To Notes professionals, this is hallowed ground. (Image: David Gewirtz)

    Although most folks today don't know, Lotus Notes was ahead of its time. It was inspired by the Plato Notes messaging system of the 1970s, developed as an early collaboration system in the early 1980s, and sold to IBM in the mid-1990s.

    Also: Best Green Monday 2018 deals: traffic deal Hunter's top picks

    Now, after a long and by far misunderstood life, Notes and its ally product, Domino, absorb been sold to India-based integrator HCL.

    Although I never actually used Notes at the enterprise level, I owe much (probably the majority) of my income from the early 1990s to the late 2000s to Notes and Domino. You see, companies relied on these two products. They were transformative.

    Also: IBM: still failing after bar nonexistent these years

    Notes came first. It mixed email with databases with insanely secure data replication and custom apps. Domino came later, adding server-level functions that increased in relevance as the internet was adopted by more and more people.

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    I got my start with Notes courtesy of Apple and The newfangled York Times. It was either late 1992 or early 1993 and my phone rang. When I picked up the phone, the head of IT for The newfangled York Times was on the other end. She told me that the Times used Notes (it was still a Lotus product at that time), but they wanted to site some sort of HyperCard-like lifelike front-end on it, had spoken to Apple, and Apple sent her to me.

    Up to this point, I'd been doing a lot of work with Apple, heading up some Apple programs on HyperCard and education. I knew a lot about HyperCard, but diminutive about Notes. I had read about Notes in the trade press, but that was about it. Although the Times' request sounded interesting, there wasn't really a way to marry HyperCard with Notes. I let her know, and they said goodbye.

    But then I started thinking. This Notes thing might absorb some legs. I made some calls and found out that Notes, back then still at Release 2, was in entrenched consume at organizations ranging from the Port of Gabon in Africa to the Royal Bank of Canada.

    It was enterprise software before enterprise software was cool.

    This was before the web, and information was far harder to find than it was now. No books on Notes were stocked at my local Barnes & Noble. As far as I could tell, no publications focused on it.

    51v9hyiehzl-sx386bo1204203200.jpg

    51v9hyiehzl-sx386bo1204203200.jpg

    The first traffic engage on Lotus Notes. ​

    And yet, as I continued to dig, I found that enterprise after enterprise, vast companies and all, were depending on Notes to transform how they did business. They never had anything to attend collaboration before. Notes opened up the opening for teams, departments, and even inter-company projects to communicate.

    Also: IBM bets on a multi-cloud future

    Notes was Salesforce before Salesforce. It was Dropbox before Dropbox. It was SharePoint before SharePoint. It was Atlassian before Atlassian. It was Zendesk before Zendesk. It was ServiceNow before ServiceNow. It was Workday before Workday. In some implementations, it was even Github before Github.

    It had web-like forms before there was a web, server apps before there were much in the way of servers, and shared distributed databases before such things had even been heard of by most IT folk. Plus, it had an intrinsic, built-in, automatic security even that protected data enterprise wide with a profound even of granularity.

    I wrote Lotus Notes 3 Revealed!, which was the first traffic engage on Lotus Notes. When the engage took off, I had the conception that a newsletter or publication might live effective. This was in the days before the web, when companies spent hundreds of dollars a year on specialized newsletters.

    workspace270w.jpg

    workspace270w.jpg

    They started this way before the web was the web. ​

    I reached out to The Cobb Group, a newsletter publisher I'd worked with in the past. I took a brace of trips to Louisville, where the Cobb Group was located, and they discussed a deal. I too flew down to my first of 15 Lotuspheres in Orlando and met with key Lotus execs. Together, and with input and support from Lotus, they started a publication called Workspace for Lotus Notes.

    Here's a shipshape point of trivia: TechRepublic, ZDNet's sister site, was formed by the very team that created The Cobb Group. The intuition there are still CBSi (our parent company) people working in Louisville is because of those Cobb Group roots.

    Also: How to Migrate IBM Notes data in Office 365 account? TechRepublic

    After Workspace for Lotus Notes, they acquired and I headed up The Notes Report, and even edited a CD-ROM-based Lotus Notes magazine for IBM.

    dominopower.jpg

    dominopower.jpg

    When it came time for the web to initiate eclipsing print newsletters, my then-future wife Denise Amrich and I started DominoPower. It would become the longest continually run, editorially-managed publication about IBM Lotus technologies and strategies. With more than 12,000 articles in its database, DominoPower counted among its readers and fans most of the key influencers and decision-makers in the IBM Lotus IT sphere.

    Notes and Domino supported me and my team for nearly 20 years. But it wasn't just me. The Notes and Domino community was something very, very special.

    Every year, we'd trek on down to Lotusphere, which was hosted at the Dolphin in Disney World. The timing of this was brilliant. The Lotus team was mostly based in Massachusetts and Lotusphere was in Orlando -- in January. A big percentage of the Notes user ground was located in northern climates, where a visit to an ice-free land in the middle of winter was incredibly welcome.

    im000019.jpg

    im000019.jpg

    (Image: David Gewirtz)

    At Lotusphere, there were sessions, exhibits, and parties. Lotus -- and then IBM -- used to rent out sections of Disney World and Universal Studios for private events, just the Notes and Domino folks.

    What many people outside the Notes world don't realize was that there was a vibrant aftermarket for Notes-related products and services. These were tool builders, folks who created specialized apps, management systems makers, and integrators.

    Also: Disney's hideous Trump robot is a faultless illustration of the uncanny valley problem facing robot designers

    Over the years, I got to know not only the Lotus (and then IBM) folks who managed Notes and Domino, but the developers who implemented them, the IT managers who ran their companies off them, and the entrepreneurs who built vibrant companies around Notes and Domino.

    im000021.jpg

    im000021.jpg

    A Lotusphere breakout session (Image: David Gewirtz)

    To a person, these were awesome people. They were friendly, funny, smart as heck, and dedicated to providing the best products and services to their customers and constituents. To this day, I weigh many of the people I met during my Notes and Domino years among my friends.

    Also: Edge computing: The state of the next IT transformation

    Over time, of course, the world changed. The conception of a distributed client software system, even one as revolutionary as Notes, became obsolete. The conception of client software, in general, has entered obsolescence in the kisser of cloud-based operations.

    lotusphere-20115413821357l.jpg

    lotusphere-20115413821357l.jpg

    One of the last Lotuspheres (Image: David Gewirtz)

    During that transition, many companies still relied on Notes implementations. Many users, who were starting to become snug with a much-changed IT environment, were forced to consume Notes-based legacy apps. These apps, while once world-changing and ahead of their time, were growing cumbersome and dated.

    As such, many of the more recent users of Notes and Domino absorb a less-than-positive perspective of the products. It's sad, because in their heyday, Notes and Domino were amazing.

    Also: How GitHub became the nexus of software automation

    As word about the HCL acquisition of Notes and Domino trickles out, I've been by far saddened to see some unkind comments about Notes and Domino. If those folks had seen what Notes and Domino meant to IT back in the day, they probably wouldn't absorb been nearly as dismissive about the consequence and relevance of these tools.

    That's why I'm writing this piece. If you're not close with Notes and Domino, or if you used them after their time, I want you to understand that, for many years, they were a really vast deal. For almost two decades, they helped get businesses more effective, helped teams communicate, and helped many left hands know what many perquisite hands were doing.

    To paraphrase Shakespeare, they hath borne us on their backs a thousand times.

    You can follow my day-to-day project updates on social media. live sure to follow me on Twitter at @DavidGewirtz, on Facebook at Facebook.com/DavidGewirtz, on Instagram at Instagram.com/DavidGewirtz, and on YouTube at YouTube.com/DavidGewirtzTV.

    Previous and related coverage:

    IBM sells software portfolio including Notes and Domino to HCL for $1.8b

    The Indian giant has claimed it is picking up products that are in big growing areas, but they too involve Notes.

    IBM aims to meld AI with human resources with Watson suite

    According to IBM, its suite of AI tools can attend HR become a growth engine to enable digital transformation.

    MillerCoors sues HCL Tech for $100 million over failure to implement ERP project

    It is still unclear as to why the project went awry, as is the case with many intricate ERP implementations.


    HCL Technologies Sees $1.8B IBM Deal A Win For Both Companies, Customers | killexams.com true questions and Pass4sure dumps

    HCL Technologies' planned acquisition of a number of IBM software applications will lead to growth of those applications for the company and clients as HCL continues their development, and in particular turns many of them into as-a-service offerings, company executives said.

    Those executives, speaking to monetary analysts early Friday, too said that HCL Technologies is getting a big team of IBM sales and evolution people which should attend smooth the transition of customers to the Noida, India-based global solution provider.

    The monetary analyst conference convoke came in the wake of HCL Technologies' Thursday announcement that it will acquire several IBM software products in the security, collaboration, and marketing automation spaces for $1.8 billion.

    [Related: 7 Things To Know About The $1.8B IBM-HCL Technologies Deal]

    The sale of the IBM software is not a intuition for alarm, said Joe Mertens, president of Sirius Computer Solutions, a San Antonio, Texas-based solution provider and long-time IBM channel partner.

    "The reality is, IBM has sold other legacy and end-of-life products, but they weren't really end-of-life, to HCL in the past," Mertens told CRN. "Typically, that was no issue for us. They continue to play in those markets."

    Included in the acquisition are such IBM products as IBM Appscan, a security-focused application for identifying and managing vulnerabilities in mission-critical applications; IBM BigFix endpoint management and security software; IBM Unica, a cloud-based enterprise marketing automation software; and IBM WebSphere Commerce, an omni-channel commerce platform for B2C and B2B organizations.

    IBM is too selling to HCL its IBM WebSphere Portal, a platform for developing enterprise web portals to attend businesses deliver highly personalized social taste to clients; the IBM Notes and IBM Domino collaborative client/server software platform; and IBM Connections, a platform for integrating email, activity and task management, instant messaging, and file and document sharing.

    The acquisition, expected to near in mid-2019, addresses a vast and growing market, especially areas dote security, marketing, and commerce, said company president C Vijayakumar in prepared remarks.

    "It's over a $50-billion product opportunity," he said. "Not just services. [The] software product traffic is a $50-billion product opening in these product areas that we've acquired."

    Many of the product areas related to the planned software acquisition are strategic to HCL, Vijayakumar said. "They bar nonexistent play to digital marketing operations, marketing automation, omni-channel commerce, and security. So they believe it's a very [important] coalesce to what they are doing."

    A vast Part of the acquisition is that HCL Technologies gets access to serve and grow over 5,000 global enterprises across a wide purview of industries and geographic markets, Vijayakumar said.

    HCL Technologies too anticipates that the addition of these software products to its products and platform traffic will too boost its services business, he said.

    Darren Oberst, corporate vice president of products and platforms for HCL Technologies, said during his prepared remarks that the worldwide enterprise software market is worth over $400 billion, with over $50 billion of that market addressed by the software products HCL Technologies is acquiring.

    "It is the largest profit pool in enterprise IT, and one that they believe they bring a lot of core competencies and very natural synergies with," Oberst said.

    Each of the products are in attractive markets, and are bar nonexistent growing by single-digit or double-digit growth rates, Oberst said. And there is a lot of overlap between the customers of those software products and HCL's own customer base, he said.

    During the question and confess period, Vijayakumar was asked how HCL will handle the fact that many of the acquired products were services-agnostic under IBM.

    Vijayakumar said HCL's core services strategy will continue to live product-agnostic, but that the company will get as-a-service offerings of many of its software available, giving it the skill to offer the perquisite version depending on customer requirements.

    "[Our] products and platforms is an independent traffic unit with its own sales channel and everything, so they way to operate this products traffic and services traffic with a inescapable even of separation," he said. "However, there are synergies by creating as-a-service offerings. The services sales teams can pick up products from any other provider as well. There are inescapable advantages to picking up the products that they have. That's how bar nonexistent the product and services companies operate."

    Oberst, responding to an analyst question about how the acquisition will repercussion IBM sales teams, said the transaction will involve the transfer of salespeople from IBM to HCL Technologies, with HCL Technologies taking over end-to-end sales responsibilities for both existing customer contracts and newfangled sales.

    HCL Technologies will too see the transfer of engineering resources from IBM for the two products in which it previously did not absorb an IP relationship IBM, particularly in the connections and commerce areas, Oberst said.

    HCL Technologies sees three type of customers in relation to the acquisition, Oberst said.

    The first type, and the largest category, includes clients who are focused on the products themselves. "As they see energy and focus and investment from HCL, they believe that the overwhelming majority of those customers will view this as a relatively smooth and neutral transition," he said.

    The second category of customers are those who are deeply committed to the product and will live excited by the profound commitment that HCL Technologies.

    "[They will live really excited by the fact that they see these products now in the hands of a vendor who is really passionate, who's going to live investing in viewing them as a top strategic priority," he said.

    The third category, Oberst said, will live customers are "deep-blue IBM customers where they probably will absorb to attain some work convincing those customers of the value that they can bring."

    Vijayakumar said HCL Technologies is currently enjoying strong growth, particularly in its products and platforms business. Second quarter fiscal 2019 revenue for that traffic has grown at a cumulative annual growth rate of 78 percent since fiscal 2016, and during the quarter crossed the $1 billion annual flee rate.

    The company is too seeing a strong traffic pipeline and organic growth momentum across bar nonexistent its service lines, he said.

    "And more importantly, speaking of across bar nonexistent service lines, live it their engineering services, infrastructure business, application business, and even the BPO business, across the board their teams are firing on bar nonexistent cylinders," he said.


    HCL makes $1.8 billion pot with IBM software deal | killexams.com true questions and Pass4sure dumps

    HCL’s acquisition strategy contrasts that of its rivals in three indispensable ways. Photo: Mint

    HCL’s acquisition strategy contrasts that of its rivals in three indispensable ways. Photo: Mint

    New Delhi: HCL Technologies Ltd will spend $1.78 billion to buy eight software products from International traffic Machines Corp. (IBM), it announced on Friday, unveiling the single-largest acquisition by an Indian information technology (IT) services company and a buyout that is unlike any made by risk-averse home-grown IT firms.

    Significantly, the evolution implies that the billionaire Shiv Nadar-led HCL Tech is making its boldest pot on selling proprietary products and services, as the Noida-based company has spent a total of $3.02 billion in building up its software product traffic since the arduous stitched its first intellectual property (IP) partnership in August 2016.

    According to chief executive officer (CEO) C. Vijayakumar, HCL has in the last 28 months spent $1.25 billion in licensing IPs from companies such as IBM and DXC Technology Co, and then building products around them.

    Under the all-cash deal, HCL will consume $1.475 billion of its own cash and borrow $300 million to finance the transaction, which the management expects to near by mid-2019.

    HCL expects that the eight software products, such as IBM Notes, Domino and Appscan, will attend it garner $625 million in incremental revenue in the 12 months after completion of the deal. In a presentation made to analysts, HCL said these products absorb a market size of $110 billion and that five of them are notching up double-digit growth.

    HCL’s acquisition strategy contrasts that of its rivals in three indispensable ways.

    First, its investments are in software products while rivals such as Tata Consultancy Services Ltd, Infosys Ltd and Wipro Ltd continue to strengthen their presence in digital such as buying design studios.

    “The $1.8bn deal by HCLT of IBM product is unlike others, given it marks a foray into software with serious capital commitment,” Kunal Tayal of Bank of America Merrill Lynch wrote in a note on Friday.

    Second, there’s the size of the deal. Indian IT firms, proper to their DNA, absorb shied away from spending more than $600 million on any one acquisition.

    Finally, HCL continues to live reticent about the details of this transaction and its entire IP partnership. A case in point: The management declines to comment on how much revenue the company has recorded from having spent $1.25 billion in the past on IP partnerships. This, too, is unlike the acquisitions made by its rivals. The HCL management did not even hold a conference convoke with the media after it announced the acquisition.

    Understandably, some analysts were sceptical.

    “An aggressive strategy on M&A (mergers and acquisitions) could live construed as a need of any material acceleration in organic traffic in the near term,” Morgan Stanley analysts Parag Gupta and Gaurav Rateria wrote in a note.

    “Revenue sustenance in such deals remains a worry,” Diviya Nagarajan, an analyst at UBS Securities, wrote in a note to investors.

    HCL Technologies, which reported 12.4% growth to finish with $7.84 billion in revenue last year, surpassed Wipro Ltd to become India’s third-biggest software services provider in the three months to 30 June, marking the first change in the pecking order of the country’s $167 billion IT outsourcing industry in six years. The company expects to grow its dollar revenue by, at best, 10.4% in the current fiscal.

    Still, HCL’s management remains confident.

    “The software industry is near to $120 billion. They absorb barely scratched the surface. Just dote they found their way to drive growth in the infrastructure maintenance traffic over the last 10 years, I see growth in IP and product traffic across very similar lines. There is very diminutive presence of Indian origin players in proper software products business,” Vijayakumar said after the company declared its second quarter earnings on 23 October. “Any forward-looking company should solemnize to better utilize cash that they absorb to redefine themselves in the long term. They are in wonderful shape.”

    Investors though, will need some convincing.

    Since the start of the year, HCL shares absorb lagged the broader IT index: From 1 January until 7 December, the BSE IT Index returned 27.75%, as against only a 8% recrudesce for HCL shareholders.

    On Friday, HCL shares ended at ₹961.55, down 4.98%, even as the benchmark Sensex rose 1.02% to finish at 35,673.25 points.

    First Published: Fri, Dec 07 2018. 07 32 AM IST


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