IBM To Sell Its Server Business To Lenovo


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Lenovo is one of the biggest players in the computer hardware industry. Its line of PCs and tablets have proven to be popular thanks to their affordability and excellent build quality. Now the company wants to get into the server business.

IBM announced this morning that Lenovo plans to acquire its server business for $2.3 billion. The transaction will include IBM's System x, BladeCenter and Flex System blade servers and switches, x86-based Flex integrated systems, NeXtScale, and iDataPlex servers and associated software. What Lenovo won't get is IBM's System z mainframes, Power Systems, Storage Systems, Power-based Flex servers, and PureApplication and PureData appliances.

“This acquisition demonstrates our willingness to invest in businesses that can help fuel profitable growth and extend our PC Plus strategy,” said Yang Yuanqing, chairman and CEO, Lenovo. “With the right strategy, great execution, continued innovation and a clear commitment to the x86 industry, we are confident that we can grow this business successfully for the long-term, just as we have done with our worldwide PC business.”

Lenovo notes that this latest acquisition is just the latest in its close partnership with IBM. The company previously purchased IBM's PC business in 2005. Despite no longer owning its hardware business, IBM will continue to work with Lenovo on developing software for x86 systems.

“This divestiture allows IBM to focus on system and software innovations that bring new kinds of value to strategic areas of our business, such as cognitive computing, Big Data and cloud,” said Steve Mills, Senior Vice President and Group Executive, IBM Software and Systems. “IBM has a proven record of innovation and transformation, which has enabled us to create solutions that are highly valued by our clients.”

So, how will this purchase affect those currently on the receiving end of IBM's server business? Lenovo will take over customer service and maintenance operations upon completion of the transaction, but IBM will continue to "provide maintenance delivery on Lenovo's behalf" for the foreseeable future.

As for employees of IBM, Lenovo says that it intends to offer employment to the 7,500 employees affected by the transaction.

Image via Wikimedia Commons