CIO Today

CIO Today Network Sites:   Top Tech News  |   CIO Today   |   Mobile Tech Today   |   Data Storage Today
Daily Briefing for Technology's Top Decision-Makers
Welcome to the new I.T.
One that streamlines service delivery
Learn how with new I.T. from BMC

Discover it here: www.bmc.com
Saturday, April 19th 
Real-time info services with Neustar
Trending Topics:   Security Heartbleed Big Data Cloud Computing Windows XP Data Centers OS X Mavericks
Home
Enterprise Software
Enterprise Hardware
Big Data
Network Security
Cloud Computing
CRM Systems
Data Storage
Operating Systems
Communications
CIO Issues
Mobile Tech
Chips & Processors
World Wide Web
Business Briefing
After Hours
Press Releases
 
Free Newsletters
Top CIO News
 
Mobile Tech Today
 

Business Briefing

Lenovo, Back for More, Buys IBM's x86 Server Business

Lenovo, Back for More, Buys IBM
January 23, 2014 10:48AM

Bookmark and Share
The purchase of IBM's x86 server business shows Lenovo is willing "to invest in businesses that can help fuel profitable growth and extend our PC Plus strategy," said Lenovo Chairman and CEO Yang Yuanqing. That strategy seeks to make China-based Lenovo the largest maker of any kind of computer, not just PCs.

Your Next Generation Data Center Is Here! Vblock™ Systems: the world's most advanced converged infrastructure are built on the Cisco Unified Computing System with Intel® Xeon® processors. Vblock™ Systems deliver extraordinary time to market, ROI and TCO, and flexibility to meet your continually changing demands with 5X faster deployment, 96% less downtime, and 1/2 the cost. Click here to learn more.

Having had great success with its purchase of IBM's PC business, Lenovo has now returned for more. On Thursday, the company announced it has entered into an agreement to buy IBM's x86 server business.

The x86 purchase includes System x, BladeCenter and Flex System blade servers and switches, as well as x86-based Flex integrated systems, NeXtScale and iDataPlex servers and associated software, blade networking and maintenance operations. The price is about $2.3 billion, with $2 billion in cash and the rest in Lenovo stock.

According to The New York Times, negotiations began early in 2013 and IBM initially wanted $4 billion. Dell and Fujitsu were also interested in the division, but, since Lenovo began analyzing the purchase a year ago, it was able to more quickly offer an acceptable bid.

Strategic Relationship

During the transition, IBM will continue with maintenance for an unspecified period of time, so the changeover will not affect customers.

IBM will keep System z mainframes, Power Systems, Storage Systems, Power-based Flex servers, and PureApplication/PureData appliances. The two companies will also engage in a strategic relationship that includes global OEM and reseller agreements for a variety of IBM products, including entry and midrange Storwize disk storage systems, tape storage systems, and some components of IBM software, such as Systems Director and Platform Computing solutions.

The purchased business currently employs 7,400 IBM workers globally, and the two companies said Lenovo expects to offer jobs to all of them.

Lenovo Chairman and CEO Yang Yuanqing said in statement that the purchase shows the company is willing "to invest in businesses that can help fuel profitable growth and extend our PC Plus strategy." That strategy seeks to make Lenovo the largest maker of any kind of computer, not just PCs. He expressed confidence that Lenovo could grow this x86 server business, "just as we have done with our worldwide PC business." In 2005, Lenovo bought IBM's PC division for $1.75 billion.

'A Diminishing Business'

For its part, IBM Senior Vice President and Group Executive Steve Mills told news media that the divestiture allows his company "to focus on system and software innovations," including cognitive computing, Big Data and the cloud. IBM recently announced it was investing more than $1 billion in the new IBM Watson Group, plus $1.2 billion to expand its global cloud computing data centers.

Roger Kay, an analyst with Endpoint Technologies Associates, told us that "IBM is leaving commodity hardware," focusing on higher-end hardware and, especially, software and professional services.

He said IBM "has handed Lenovo a diminishing business, and Lenovo has made the pitch that it is good" at competing in commodity computing products. Lenovo is currently the world's largest PC maker. In theory, Kay added, "this is a win-win for both companies."

Two of Lenovo's biggest competitors -- HP and Dell -- "have both PCs and servers," he pointed out, so this purchase "fills out Lenovo's line." As the PC business continues its slump, Lenovo has also expanded into tablets and smartphones.

Tell Us What You Think
Comment:

Name:



 Business Briefing
1. Google, Rockstar Suit Stays in Calif.
2. Google Earnings, Sales Disappoint
3. Profit and Revenue Slip for IBM
4. Zynga Launches Mobile FarmVille
5. Tech Giant Alibaba Plans U.S. IPO




 Most Popular Articles
1. BlackBerry Drops T-Mobile After Nasty Spat
2. Cisco, IBM Launch Internet of Things Consortium
3. Salesforce CRM Gets Industry Specific for Internet of Customers
4. IBM Applies Big Data Analytics To Fight Against Fraud
5. Intel Bets on Cloudera for Big Data Analytics

Have an informed opinion on this story?
Send a Letter to the Editor.
We want to know what you think.
Send us your Feedback.

 Related Topics  Latest News & Special Reports

  Poll: A Mix of Feelings on Future Tech
  Google, Rockstar Suit Stays in Calif.
  Michaels: Nearly 3M Cards Breached
  'Like' Cheerios, Give Up Right To Sue
  Heartbleed Could Cost Millions

 Technology Marketplace

Business Intelligence
Get real-time, cloud-based information services with Neustar.
 
Cloud Computing
BMC's I.T. solutions unleash the power of your business
Next Generation Data Center Is Here! Vblock™ Systems from VCE
 
Contact Centers
HP delivers the future of the contact center with HP Qfiniti 10.
 
Data Storage
Next Generation Data Center Is Here! Vblock™ Systems from VCE
Barium Ferrite (BaFe) is the future of tape.
2.5" Enterprise-class SATA & SAS SSDs for server & storage applications
 
Enterprise Hardware
Barium Ferrite (BaFe) is the future of tape.
2.5" Enterprise-class SATA & SAS SSDs for server & storage applications
 
Enterprise I.T.
BMC's I.T. solutions unleash the power of your business
 
Hardware
Protect your network with APC Smart-UPS battery backup
 
Network Security
Protect your network with APC Smart-UPS battery backup
 

Network Security Spotlight
Michaels Says Nearly 3M Credit, Debit Cards Breached
Arts and crafts retail giant Michaels Stores has confirmed that a data breach at its POS terminals from May 2013 to Jan. 2014 may have exposed nearly 3 million customer credit and debit cards.
 
Heartbleed Could Cost Millions, Could Have Been Prevented
Early estimates of Heartbleed’s cost to enterprises are running in the millions. The reason: revoking all the SSL certificates the bug leaked will come at a very hefty price.
 
Google's Street View Software Unravels CAPTCHAs
The latest software Google uses for its Street View cars to read street numbers in images for Google Maps works so well that it also solves CAPTCHAs, those puzzles designed to defeat bots.
 

Enterprise Hardware Spotlight
Vaio Fit 11A Battery Danger Forces Recall by Sony
Using a Sony Vaio Fit 11A laptop? It's time to send it back to Sony. In fact, Sony is encouraging people to stop using the laptop after several reports of its Panasonic battery overheating.
 
Continued Drop in Global PC Shipments Slows
Worldwide shipments of PCs fell during the first three months of the year, but the global slump in PC demand may be easing, with a considerable slowdown from last year's drops.
 
Google Glass Finds a Home in Medical Education, Practice
Google Glass may find its first markets in verticals in which hands-free access to data is a boon. Medicine is among the most prominent of those, as seen in a number of Glass experiments under way.
 

Mobile Technology Spotlight
Google Releases Chrome Remote Desktop App for Android
You're out on a sales call, and use your Android mobile device to grab a file you have back at the office on your desktop. That's a bit easier now with Google's Chrome Remote Desktop app for Android.
 
Amazon 3D Smartphone Pics Leaked
E-commerce giant Amazon is reportedly set to launch a smartphone after years of development. Photos of the phone, which may feature a unique 3D interface, were leaked by tech pub BGR.
 
Zebra Tech Buys Motorola Enterprise for $3.45B
Weeks after Lenovo bought Motorola Mobility’s assets from Google for $2.91 billion, Zebra Technologies is throwing down $3.45 billion for Motorola’s Enterprise business in an all-cash deal.
 

Navigation
CIO Today
Home/Top News | Enterprise Software | Enterprise Hardware | Big Data | Network Security | Cloud Computing | CRM Systems
Data Storage | Operating Systems | Communications | CIO Issues | Mobile Tech | Chips & Processors | World Wide Web
Business Briefing | After Hours | Press Releases
Also visit these Enterprise Technology Sites
Top Tech News | CIO Today | Mobile Tech Today | Data Storage Today

Services:
FreeNewsFeed | Free Newsletters | XML/RSS Feed

About CIO Today Network | How To Contact Us | Article Reprints | Services for PR Pros (In partnership with NewsFactor) | Top Tech Wire | How To Advertise

Privacy Policy | Terms of Service
© Copyright 2000-2014 CIO Today. All rights reserved. Article rating technology by Blogowogo. Member of Accuserve Ad Network.