Lenovo snaps up IBM's server business for $2.3 billion

Lenovo finally gets IBM's servers

IBM's x86 server business has been up for bidding over the past few days and, while Fujitsu and Dell were also in the running, China's Lenovo Group has emerged as the winner, parting with $2.3 billion (£1.39 billion, or AU$2.62 billion) in the process.

The purchase of its server infrastructure division will diversify the Beijing-based company's product line-up. Lenovo was recently rated as the No.1 PC maker by analysts IDC and Gartner.

In an emailed statement, Giorgio Nebuloni, research manager at IDC Europe, said that a powerful new vendor could potentially be born out of the deal, with Lenovo gaining customer bases, a skilled sales force, channel relationships and brand recognition.

IBM's System Z mainframes, Power Systems, Storage Systems, Power-based Flex servers and PureApplication and PureData appliances will all be retained by the firm.

IBM look to the clouds

Steve Mills, Senior vice president at IBM, said that the acquisition would allow IBM to work towards its plans on Big Data and the cloud, following its recent investments in the new IBM Watson Group and plans to expand its global cloud footprint.

IBM and Lenovo will enter into a strategic partnership that includes a reseller agreement for IBM's Storwize and tape storage systems and parts of IBM's system software portfolio, including Platform Computing solutions. The two have collaborated before; the Chinese company entered the global computing market in 2005 by acquiring IBM's PC unit.

On paper, the deal works for the broader strategy of both vendors, according to Nebuloni, who said that Lenovo's path to diversity from computing has been opened up, while IBM is free to continue its move into becoming a leading cloud provider.