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The end of an era for IBM selling x86 server line to Lenovo

International Business Machines Corp. (IBM) has agreed to sell their x86 server business to Lenovo for $2.3 billion.

IBM CEO Ginni Rometty shown here speaking at the FORTUNE Most Powerful Women Summit in 2013
Photo by Paul Morigi

Rumors had been circulating for months that Lenovo and IBM were talking about the deal. A press release on Thursday confirmed that Lenovo and IBM have entered into a definitive agreement. Lenovo plans to acquire IBM’s x86 server business. IBM will hold onto their mainframe computer division.

IBM focuses on software

In a move that clearly shows IBM's shift from hardware to software, Senior Vice President Steve Mills stated, "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."

The sell off of the x86 server division marks the end of an era for IBM.

The term x86 refers to the Intel based platform where IBM made a name for themselves in the 1980s and early 1990s establishing the standard for "IBM compatible computers." IBM sold their x86 personal computer line to Lenovo on 2005.

Lenovo diversifies

When Lenovo purchased IBM’s personal computer business in 2005, they acquired the well known and respected ThinkPad line of computers. The move to acquire the x86 servers from IBM will help Lenovo to strengthen their position in the business enterprise market.

As the world's largest personal computer vendor in an era of declining PC sales Lenovo has begun diversifying their product line beyond the traditional desktop computer.

Recently Lenovo announced their entry into smartphones, and made their presence known in the area of tablets with the release of the Lenovo MIIX 2 tablet series as a serious alternative to the Microsoft Surface 2 tablets.

The Chinese multinational Lenovo Group Limited is currently the largest PC maker worldwide. Lenovo has corporate offices in Beijing, China, and Morrisville, North Carolina.


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