Lenovo to close US$2.1bn IBM x86 server deal

Company set to complete acquisition this week

29 September 2014 by Hollie Luxford - DatacenterDynamics

Chinese PC giant Lenovo said it is expecting to close its US$2.1bn acquisition of IBM’s x86 server business on Wednesday (October 1) making Lenovo the third-largest player in the $42.1bn global x86 server market.

Lenovo is acquiring all the Intel-based servers including System x, BladeCenter and Flex System blade servers and switches, x86-based Flex integrated systems, NeXtScale and iDataPlex servers and associated software, blade networking and maintenance operations.

IBM will still make servers, at the high end. It will retain its System z mainframes, Power Systems, Storage Systems, Power-based Flex servers, PureApplication and PureData appliances.

The deal requires IBM to carry on maintaining and supporting the servers for an extended period of time, to ease customers' concerns.

Lenovo has big plans, according to Gerry Smith, president of Lenovos' enterprise business group: “Over time, we will compete vigorously across every sector, using our manufacturing scale and operational excellence to repeat the success we have had with PCs."

IBM's x86 server staff will transfer to Lenovo’s enterprise business group. Adalio Sanchez led the x86 server business at IBM and will now report to Smith.

The deal will close in different countries on different dates. All major markets will be covered on Wednesday, with most other countries following later this year, and a few stragglers following in early 2015.

IBM said in January it was focusing its efforts on its Watson Group, which is established to push cloud-delivered cognitive innovations and expanding its global cloud footprint which includes its $1.2bn investment in building 40 data centers in 15 countries.

Also announced in January was a strategic alliance between the two companies where Lenovo will resell selected products from IBM’s storage and software portfolio.

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