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IBM Turns Attention to Cognitive Computing, Big Data, and Cloud with Sale of x86 Server Business


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Lenovo and IBM announced on January 23 that they had entered into a definitive agreement in which Lenovo will acquire the x86 server business from IBM, including IBM 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.

The purchase price is approximately $2.3 billion, approximately two billion of which will be paid in cash and the balance in Lenovo stock. IBM will retain its System z mainframes, Power Systems, Storage Systems, Power-based Flex servers, and PureApplication and PureData appliances. 

IBM to focus on cognitive computing, big data and cloud

“This divestiture allows IBM to focus on system and software innovations that bring new kinds of value to strategic areas of our business, such as cognitive computing, big data and cloud,” said Steve Mills, Senior Vice President and Group Executive, IBM Software and Systems.

IBM said it will continue to develop and evolve its Windows and Linux software portfolio for the x86 platform. IBM is a leading developer of software products for x86 servers with thousands of products and tens of thousands of software developer and services professionals who build software for x86 systems. 

Lenovo and IBM plan to enter into a strategic relationship which will include a global OEM and reseller agreement for sales of IBM’s entry and midrange Storwize disk storage systems, tape storage systems, General Parallel File System software, SmartCloud Entry offering, and elements of IBM’s system software portfolio, including Systems Director and Platform Computing solutions. 

IBM to provide maintenance for customers for a time

Following the close of the transaction, Lenovo will assume related customer service and maintenance operations. IBM will continue to provide maintenance delivery on Lenovo’s behalf for a time to enable a smooth transition in terms of customers’ maintenance support. 

Approximately 7,500 IBM employees around the world, including those based at major locations such as Raleigh, Shanghai, Shenzhen and Taipei, are expected to be offered employment by Lenovo. 

Announcement follows $1 billion investment in Watson Group

This agreement follows recent announcements by IBM that it will invest more than $1 billion in the new IBM Watson Group, and $1.2 billion to expand its global cloud computing footprint to 40 data centers worldwide in 15 countries across five continents. 

The transaction is subject to the satisfaction of regulatory requirements, customary closing conditions and any other needed approvals. Subsequent local closings will occur subject to similar conditions, agreements and the information and consultation process in applicable countries. 

For more information, go to www.lenovo.com.


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