Lenovo gets the rest of IBM’s X86 hardware

As we expected Lenovo has managed to buy IBM’s low-end server business for $2.3 billion.

The Chinese outfit famously bought a huge chunk of Biggish Blue as the outfit turned into a software services company and got out of hardware ten years ago.

Lenovo turned the money-losing ThinkPad business for $1.75 billion, eventually becoming the world leader in personal computers in 2012.

The deal would increase Lenovo’s share in the server market to 14 percent from two percent and will need clearance from the Committee on Foreign Investment in the United States (CFIUS), which protects US national security.

Lennovo’s purchase of IBM’s notebook division faced scrutiny before approval, and this time it is expected to be easier. Lenovo was well known in the United States and the System X server, among the systems to be bought by Lenovo, is based on commoditised technology and components from the land of the free.

The ever shrinking not-so-big-Blue said this month it would spend more than $1.2 billion to build up to 15 data centres on five continents to expand its cloud services and reach new clients and markets.

It also wants to invest more than $1 billion to establish a new business unit for Watson to offer cloud services to businesses and consumers.

Lenovo wants to remodel itself as a force in mobile devices and data storage servers. However first it will have to turn around IBM’s low-margin server business which has been posting losses for the last seven quarters as clients move to the cloud.