IBM’s Low-end Server Business Acquired For $2.3 Billion

IBM’s Low-end Server Business Acquired For $2.3 Billion

IBM_logo

Lenovo has finally acquired IBM’s low-end server business, after a deal spanning over a year has finally come to a close. The final acquisition price came to $2.3 billion, making it the largest tech server acquisition by a Chinese company.

IBM has been trying to shift its x86 server business for a few years now, with more companies switching to cloud computing technology from traditional server-side infrastructure. IBM is looking to invest more money in high-margin servers, which still generate impressive revenue.

Lenovo has more reason to own low-end x86 servers, given their high reputation in China, it will be easier for the company to sell their servers to Chinese companies, who are looking to nationalize their servers with the recent U.S. surveillance outbreak. Lenovo may be able to boost revenues and margins on the x86 servers if they invest heavily in China. Most Western companies are now either moving to high-end servers, their own or cloud based infrastructure, adding more benefits to the user.

IBM has been a stepping stone for Lenovo’s success before, in 2005 the Chinese company acquired IBM’s ThinkPad PC business for $1.75 billion, bolstering their position in the PC market from unknown to first place.  This is not the first time Lenovo has tried to purchase the business, last year IBM offered it out to the company for $6 billion, but Lenovo declined. In one straight year, the price has dropped by more than half, analysts believe this is due to higher grossing cloud computing firms and more companies looking to newer and faster technologies.

Hewlett Packard is currently the major player in the x86 server business with IBM second, although their position may drop due to this large scale acquisition. Lenovo is currently not in the top five, but given the amount they are prepared to invest, we could see a repeat of the PC market battle.

Analysts predict the x86 servers bring in around $4 billion in revenue annually. As the PC market dwindles, Lenovo is looking to invest more in back-end technology and mobile, making sure they have their backs covered when the PC dies.

By Walter Bailey

Walter

Walter has been a technology freelance writer for several years. His focus is on Cloud Computing and Big Data.

Sorry, comments are closed for this post.

Comics

At CloudTweaks, we're plugged into the cloud, the internet of things and all that the web has to offer. From wearable technology, to mobile computing, cloud computing and big data, CloudTweaks is your source for updates and news on the most innovative technology.

Popular

Top Viral Impact

Cloud Infographic: Cloud Apps (A Buyers Guide)

Cloud Infographic: Cloud Apps (A Buyers Guide)

Cloud Apps (A Buyers Guide) SaaS has gained huge popularity over the last few years, with an increasing number of enterprises adopting it mainly due to the benefits like pay per use and on demand service. Cloud applications entail thorough testing for their integrity, different from that of on-premise applications. This involves testing of business…

5 Considerations You Need To Review Before Investing In Data Analytics

5 Considerations You Need To Review Before Investing In Data Analytics

Review Before Investing In Data Analytics Big data, when handled properly, can lead to big change. Companies in a wide variety of industries are partnering with data analytics companies to increase operational efficiency and make evidence-based business decisions. From Kraft Foods using business intelligence (BI) to cut customer satisfaction analysis time in half, to a…

Cloud Infographic – What Is The Internet of Things?

Cloud Infographic – What Is The Internet of Things?

What Is The Internet of Things? “We’re still in the first minutes of the first day of the Internet revolution.”  – Scott Cook The Internet of Things (IOT) and Smart Systems are based on the notions of Sensors, Connectivity, People and Processes. We are creating a new world to view and measure anything around us through…

Cloud Infographic: Cloud Public, Private & Hybrid Differences

Cloud Infographic: Cloud Public, Private & Hybrid Differences

Many people have heard of cloud computing. There is however a tremendous number of people who still cannot differentiate between Public, Private & Hybrid cloud offerings.  Here is an excellent infographic provided by the group at iWeb which goes into greater detail on this subject. Infographic source: iWeb About Latest Posts WalterWalter has been a…

IBM and SAP Announce Industry’s Largest Cloud Deal

IBM and SAP Announce Industry’s Largest Cloud Deal

IBM and SAP Announce Industry’s Largest Cloud Deal IBM and SAP have shaken the cloud computing world this afternoon with the announcement of one of the largest cloud deals in the industry’s history – bringing together two of the largest technology companies in a bid to offer a more holistic service to their clients. SAP…

Featured Sponsors

The Internet of Everything Opens Up The World

The Internet of Everything Opens Up The World

Shaping The World With New Technologies As a connected collection of intelligent objects, the Internet of Everything promises to open up those areas of the world hardest hit by economic, political and agricultural blights. Relatively inexpensive devices, paired with revolutionary energy sources and unprecedented access to information offer great promise to farmers and workers in…

Moving From Email Into The Cloud

Moving From Email Into The Cloud

Mobile Collaboration In The Cloud Imagine that you, as a manager, are told by the powers that be that you have to find “efficiencies” within your department that will result in one million dollars of savings annually. You struggle with this. You send an email to everyone on your senior team. “Where can we save…

2015 Advertising Opportunities - Find Out More!

Cloud Logo Sponsors

hp Logo CityCloud-PoweredByOpenstack-Blue square_logo_100x100-01
cisco_logo_100x100 vmware citrix100

Established in 2009, CloudTweaks is recognized as one of the leading influencers in cloud computing, big data and internet of things (IoT) information. Our goal is to continue to build our growing information portal, by providing the best in-depth articles, interviews, event listings, whitepapers, infographics and much more.

Contact

CloudTweaks Media
Phone: 1 (212) 763-0021

Join Our Newsletter