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

About Walter

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

View All Articles

Sorry, comments are closed for this post.

Increasing Efficiency and Reducing Cost with Managed Printing Services

Increasing Efficiency and Reducing Cost with Managed Printing Services

Managed Printing Services This is a sponsored post written on behalf of HP MPS.  Today’s business leaders recognize the value of shared services, significantly providing a wide range of enterprises with the sophisticated tools they need to compete with big business, while additionally driving costs down. But an area often overlooked in our tech-savvy world…

Curing Cancer With Big Data

Curing Cancer With Big Data

Cancer & Big Data The fight against cancer has been going on for centuries. Many leaders have tried and failed to bring about change to cancer treatment. Richard Nixon famously declared a War on Cancer with the National Cancer Act of 1971, and while the Nixon administration certainly increased research funding, they ultimately fell short…

IoT & Predictive Analytics In Healthcare

IoT & Predictive Analytics In Healthcare

IoT & Predictive Analytics In a report by Grand View Research Inc., it’s predicted that the global Internet of Things (IoT) healthcare market will reach nearly $410 billion by 2022, with mobile penetration, software automation, and innovation medical devices promising rapid testing, greater accuracy, portability, and user-friendliness. Chronic diseases such as obesity, diabetes, heart failure,…

What Do You Do With A Drunken Sailor? Look To The Cloud

What Do You Do With A Drunken Sailor? Look To The Cloud

Saferide App Petty officer Michael Daigle of the US Navy has rolled out an app to curb drunken driving in the Navy ranks. His Saferide ride-sharing service runs on Voxox’s Cloud Phone service which costs just $15 a month and is popular among US Service members abroad, where mobile phones are not permitted for use…

Red Hat Offers Container Native Persistent Storage for Linux Containers

Red Hat Offers Container Native Persistent Storage for Linux Containers

Red Hat Offers Container Storage Latest Red Hat Gluster Storage release enables greater agility and efficiency for OpenShift developers deploying application containers in production SAN FRANCISCO – RED HAT SUMMIT – June 28, 2016 – Red Hat, Inc. (NYSE: RHT), the world’s leading provider of open source solutions, today announced new storage innovations designed to enable developers to…

6 Tech Predictions To Have A Major Impact In 2016

6 Tech Predictions To Have A Major Impact In 2016

6 Tech Predictions To Have A Major Impact The technology industry moves at a relentless pace, making it both exhilarating and unforgiving. For those at the forefront of innovation it is an incredibly exciting place to be, but what trends are we likely to see coming to the fore in 2016? Below are six predictions…

The Internet of Things Lifts Off To The Cloud

The Internet of Things Lifts Off To The Cloud

The Staggering Size And Potential Of The Internet of Things Here’s a quick statistic that will blow your mind and give you a glimpse into the future. When you break that down, it translates to 127 new devices online every second. In only a decade from now, every single vehicle on earth will be connected…

Cloud Computing Price War Rages On

Cloud Computing Price War Rages On

Cloud Computing Price War There’s little question that the business world is a competitive place, but probably no area in business truly defines cutthroat quite like cloud computing. At the moment, we are witnessing a heated price war pitting some of the top cloud providers against each other, all in a big way to attract…

Is The Fintech Industry The Next Tech Bubble?

Is The Fintech Industry The Next Tech Bubble?

The Fintech Industry Banks offered a wide variety of services such as payments, money transfers, wealth management, selling insurance, etc. over the years. While banks have expanded the number of services they offer, their core still remains credit and interest. Many experts believe that since banks offered such a wide multitude of services, they have…

Utilizing Digital Marketing Techniques Via The Cloud

Utilizing Digital Marketing Techniques Via The Cloud

Digital Marketing Trends In the past, trends in the exceptionally fast-paced digital marketing arena have been quickly adopted or abandoned, keeping marketers and consumers on their toes. 2016 promises a similarly expeditious temperament, with a few new digital marketing offerings taking center stage. According to Gartner’s recent research into Digital Marketing Hubs, brands plan to…

5 Reasons Why Your Startup Will Grow Faster In The Cloud

5 Reasons Why Your Startup Will Grow Faster In The Cloud

Cloud Startup Fast-tracking Start-ups face many challenges, the biggest of which is usually managing growth. A start-up that does not grow is at constant risk of failure, whereas a new business that grows faster than expected may be hindered by operational constraints, such as a lack of staff, workspace and networks. It is an unfortunate…

5 Ways The Internet of Things Will Drive Cloud Growth

5 Ways The Internet of Things Will Drive Cloud Growth

5 Ways The Internet of Things Will Drive Cloud Growth The Internet of Things is the latest term to describe the interconnectivity of all our devices and home appliances. The goal of the internet of things is to create universal applications that are connected to all of the lights, TVs, door locks, air conditioning, and…