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.

Four Reasons Why CIOs Must Transform IT Into ITaaS To Survive

Four Reasons Why CIOs Must Transform IT Into ITaaS To Survive

CIOs Must Transform IT The emergence of the Cloud and its three delivery models of Infrastructure as a Service (IaaS), Software as a Service (SaaS) and Platform as a Service (PaaS) has dramatically impacted and forever changed the delivery of IT services. Cloud services have pierced the veil of IT by challenging traditional method’s dominance…

Personal Space And The Internet of Things (IoT)

Personal Space And The Internet of Things (IoT)

The Internet of Things (IoT) There is a long time concept of the personal area network or PAN. For all intent and purposes this is the maximum distance a Bluetooth device can move away from the host and still be functional. As I read the many wonderful pieces on the explosion of IoT and wearable…

The Importance Of Cloud Password Management

The Importance Of Cloud Password Management

Cloud Password Management A very obvious trend over the past few years has been organizations moving their business applications to the cloud. This trend has been talked about over and over again, including the benefits, drawbacks, implementation hurdles, etc. So what is the next step or advancement in cloud hosted applications? The next step is…

Are You Sure You Are Ready For The Cloud: Security

Are You Sure You Are Ready For The Cloud: Security

Cloud Security For the last several months, we have been discussing ways to make sure you are ready for the next step in your IT evolution: Cloud. When review the different steps of making sure you are ready, one that I have intentionally avoided was Security. I spoke to you about “Security of Business”, but…

Smart Umbrellas – Wearable, Portable and Stayable

Smart Umbrellas – Wearable, Portable and Stayable

They automatically open when it starts to rain. A rising tide lifts all boats. What does a deluge do? Lifts everything, docks, piers, boats and anyone standing in the way. IoT post the Consumer Electronic Show is no longer a rising tide it is a deluge. You can avoid a rising or surge tide unless…

New Smartphones From Apple, Samsung and HTC Promise To Light Up 2016

New Smartphones From Apple, Samsung and HTC Promise To Light Up 2016

New Smartphones from Apple, Samsung and HTC (Sponsored post courtesy of Verizon Wireless) The launch of the Galaxy S7 Edge at the Mobile World Congress in Barcelona during February was the first shot in a vintage year for mobile phones. The S7 is an incredible piece of hardware, but launches from HTC and Apple later in the…

Featured Sponsored Articles
How Successful Businesses Ensure Quality Team Communication

How Successful Businesses Ensure Quality Team Communication

Quality Team Communication  (Sponsored post courtesy of Hubgets) Successful team communication and collaboration are as vital to project and overall business success as the quality of products and services an organization develops. We rely on a host of business tools to ensure appropriate customer interactions, sound product manufacturing, and smooth back-end operations. However, the interpersonal relationships…

Featured Sponsored Articles
How To Develop A Business Continuity Plan Using Internet Performance Management

How To Develop A Business Continuity Plan Using Internet Performance Management

Internet Performance Management Planning CDN Performance Series Provided By Dyn In our previous post, we laid out the problems of business continuity and Internet Performance Management in today’s online environment.  In this article, we will take a look at some of the ways you can use traffic steering capabilities to execute business continuity planning and…

Featured Sponsored Articles

CloudTweaks is recognized as one of the leading influencers in cloud computing, infosec, big data and the 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.

Sponsor