Lenovo is buying IBM's x86 server business


— 9:21 AM on January 23, 2014

Lenovo acquired IBM's PC business way back in 2004. IBM retained its server division, but part of that will now be sold to Lenovo, as well. The two firms have reached a "definitive agreement" for Lenovo to acquire IBM's x86 server business. The sale is worth $2.3 billion, most of which will be paid in cash. Regulators still need to sign off on the agreement, though.

As part of the deal, Lenovo will get IBM's System x, BladeCenter, and Flex System blade servers and switches. x86-based Flex integrated systems, NeXtScale, and iDataPlex servers are also part of the package. IBM will keep its System z mainframes, storage products, and all PowerPC-based gear. The firm will continue to develop x86 software for both Windows and Linux, as well.

Lenovo plans to take over "customer service and maintenance operations" for x86 servers after the acquisition is complete. However, the actual maintenance will continue to be provided by IBM for "an extended period of time." "Customers should see little change in their maintenance support," Lenovo says.

According to IBM Seniour VP Steve Mills, the company is shedding its x86 server business 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." The press release notes that IBM recently invested $1.2 billion to expand its global network of cloud data centers and $1 billion to create a new Watson Group tasked with developing cognitive applications for so-called big data. Selling its x86 server business should net IBM enough to offset those expenditures.

   
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