It’s only been a month since International Business Machines Corp. announced India-based HCL Technologies Ltd. would acquire several IBM software products for $1.8 billion, including IBM’s on-premise commerce software, WebSphere Commerce, that retailers use to run their e-commerce platforms and omnichannel features.
In an interview with Internet Retailer, Darren Oberst, corporate vice president at HCL, shed a bit of light on the two companies’ relationship going back to 2015 and HCL’s plans for WebSphere Commerce. In the past, Oberst says, HCL typically would purchase the rights to the IBM source code for products and add features and functionality, taking on the responsibility for owning the roadmap and product improvements of the software. HCL and IBM would then both market and sell the products and share revenue from product sales.
But this latest sale marks a change to that formula in which HCL—for the first time—is outright purchasing several IBM software products ranging from the WebSphere Commerce e-commerce platform, which is used by 44 retailers in the Internet Retailer Top 1000, to IBM’s Unica on-premise marketing automation product. Internet Retailer Top 1000 merchants that use IBM for their e-commerce platforms include Carhartt Inc. (No. 754), David’s Bridal (No. 407), The Home Depot Inc. (No. 7) and Lowe’s Cos Inc. (No. 21).
WebSphere, Oberst says, is used by “hundreds of leading global retailers,” and HCL is planning to invest in new features and functionality. It also will honor any commitments IBM made to customers and planned features and function releases. Additionally, the IBM WebSphere team is moving become part of HCL , Oberst says.
“HCL has a good track record of working with IBM products,” Oberst says. “We’ve hired a lot of IBM people.” Oberst says retailer clients of IBM can expect consistency; for example, they will be working with the same employees they did when the product was owned by IBM.
“We don’t want to break anything or change what is working,” he says. “We are starting with a focused investment in the product. IBM is a huge company with a huge portfolio [of products], and we are a lot smaller so we can be more focused [on WebSphere].
WebSphere is an on-premise e-commerce platform, meaning retailers buy the e-commerce software and install and maintain it on their own servers. This model has been lagging in popularity as many retailers in recent years have opted to use cloud-based platforms that are also often called SaaS, or software-as-a-service, where a vendor hosts software used by multiple clients on the web. In a survey of 183 online retailers conducted in August, 40% of merchants that were planning to switch e-commerce platforms (the largest percentage) were most strongly considering a SaaS platform.
When asked if HCL planned to release a cloud-based version of WebSphere, Oberst hinted that such an offering may be on the horizon, but made clear that HCL doesn’t plan to move completely to a cloud-based offering. “We don’t want to come out to the community and say everyone needs to move to SaaS or we will always only be on-premise,” he says, noting that WebSphere’s latest version of its e-commerce platform, Version 9.0, incorporated many cloud technologies.
He also noted that going forward, HCL will be “really focused” on moving toward a microservices approach to its e-commerce platform. Microservices, which are growing in popularity as a way to build and manage e-commerce sites, are individual components or independent services that can be swapped out with ease to keep an e-commerce business current, more agile and able to deploy faster. A microservice can be any application or feature on a website—such as a site search tool, for example—and it will use an API as a calling card of sorts to connect with and pull data from a separate application, such as a product database. This approach, proponents say, enables businesses to be more agile and constantly iterate to better serve shoppers than a packaged, monolithic e-commerce platform.
While the sale has not yet been finalized, Oberst says many IBM WebSphere clients have been reaching out to HCL since the planned purchase was announced. “Some want to meet us. Some are saying, ‘these are the 10 things we absolutely want to see in the next release,’” Oberst says. “For now we just want to really listen and take guidance.”