IBM will sell its x86 server business to Lenovo for $2.3 billion.
The deal includes IBM's 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 retain its System z mainframes, Power Systems, Storage Systems, Power-based Flex servers, and PureApplication and PureData appliances.
IBM said it will continue to develop and evolve its Windows and Linux software portfolio for the x86 platform.
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.
“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 has a proven record of innovation and transformation, which has enabled us to create solutions that are highly valued by our clients.”
“This acquisition demonstrates our willingness to invest in businesses that can help fuel profitable growth and extend our PC Plus strategy,” said Yang Yuanqing, chairman and CEO, Lenovo. “With the right strategy, great execution, continued innovation and a clear commitment to the x86 industry, we are confident that we can grow this business successfully for the long-term, just as we have done with our worldwide PC business.”
In 2005, when Lenovo acquired IBM’s PC business, which included the ThinkPad line of PCs. In the period since the companies have continued to collaborate in many areas. The companies are planning 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.
Earlier this month, IBM announced plans to invest $1.2 billion to expand its cloud business and build on its acquisition of Softlayer data centers last year. The plans call for 15 new data centers worldwide, including new Softlayer facilities in Washington D.C., Mexico City, Dallas, China, Hong Kong, London, Japan, India and Canada. The expansion will bring the number of IBM cloud data centers to about 40 worldwide.
IBM agreed to acquired SoftLayer Technologies, which operates 13 data centers in the United States, Asia and Europe, last summer. SoftLayer allows clients to buy enterprise-class cloud services on dedicated or shared servers, offering clients a choice of where to deploy their applications. The company is based in Dallas, Texas, and serves approximately 21,000 customers.
IBM also announced plans to invest $1 billion in a new initiative to deliver Watson services over the cloud. The company has established a new IBM Watson Group in NYC to build additional cognitive computing services, software and apps into the marketplace that analyze, improve by learning, and discover answers and insights to complex questions from massive amounts of disparate data. IBM plans to invest more than $1 billion in the initiative.
Some highlights of the X6 architecture:
- Integrated eXFlash memory-channel storage -- an industry first, this DIMM-based storage provides up to 12.8 terabytes of ultrafast flash storage close to the processor, increasing application performance by providing the lowest system write latency available, essential for analytics applications. X6 can provide significantly lower latency for database operations, which can lower licensing costs and reduce storage costs by reducing or eliminating the need for external SAN/NAS storage units;
- A modular, scalable design that supports multiple generations of CPU -- another industry first -- and can reduce acquisition costs, up to 28 percent in comparison to one competitive offering.  X6 provides stability and flexibility through forthcoming technology developments, allowing users to scale up now and upgrade efficiently in the future;
- Resiliency features for cloud delivery models of mission-critical applications -- memory and storage increase virtual machine capacity to allow SaaS delivery of applications. Autonomous self-healing CPU and memory systems maximize application uptime by proactively identifying potential failures and taking action to correct them. In addition, Upward Integration Modules can help reduce the cost and complexity of system administration by allowing operators to perform management tasks through virtualization tools.