Hitachi's $9.6B Acquisition of GlobalLogic Shows Growing Value of Software

Monday, April 5, 2021

Recently Hitatchi Ltd. announced its $9.6 billion acquisition of GlobalLogic Inc, a leading Silicon Valley digital engineering services company with over 20,000 professionals across 14 countries.

GlobalLogic has a deep "chip-to-cloud" advanced software product engineering technology in addition to experienced design skills and vertical industry expertise.

According to the press release, this acquisition will accelerate the digital transformation of social infrastructure on a global scale by aligning GlobalLogic’s advanced digital engineering services with Hitachi’s Lumada portfolio.

Hitachi, Ltd. based in Tokyo, Japan, is focused on Social Innovation Business combining information technology (IT), operational technology (OT) and products. The company’s consolidated revenues for fiscal year 2019 (ended March 31, 2020) totaled 8,767.2 billion yen ($80.4 billion), and it employed approximately 301,000 people worldwide.

Hitachi drives digital innovation across five sectors – Mobility, Smart Life, Industry, Energy and IT – through Lumada, Hitachi’s advanced digital solutions, services, and technologies for turning data into insights to drive digital innovation. Its purpose is to deliver solutions that increase social, environmental and economic value for its customers. 

What does this tell us about the role of software within business strategy?

This business decision by Hitachi is another indicator that software is becoming a core competency to strategies of non-software companies. If a company has a distinctive "secret sauce," can codify it and scale it alongside digital platforms, the sky is the limit for ROI.

This practice is a challenge of course if a organization doesn't possess modern software development capabilities.

To embrace this mentality, organizations must first envision a software-driven future and both vertical industry and domain know-how, according to Forbes.

This was the case for Hitachi, but by reinventing themselves around a core modular software competency, they are built for rapid innovation, scalability, and resilience.

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