Servers IBM sold USD 2.3 Billion by Lenovo

Lenovo agreed to buy a low-end server business unit of IBM. With a value of USD 2.3 billion, the biggest acquisition record acquisition of technology by Chinese companies.

For last decade, Lenovo bought IBM's PC business unit of ThinkPad. The acquisition helped Lenovo pushed into position over the largest computer manufacturer in the world.

The acquisition still requires approval from the U.S. government that would allow IBM to focus on services and software that is more profitable. While Lenovo hopes the acquisition of Lenovo's server market share increase to 14 % from the previous 2 %.

Sales of low-end server division of IBM proved true shift from hardware to software business. This month, IBM said it would spend $ 1.2 billion to build 12 data centers in several countries.

Reuters on Friday ( 01/24/2014 ), it is not easy for Lenovo to generate server business unit bought from IBM. In addition to the small profit margins , the business unit loss in 7 consecutive quarters.

"To reduce costs, Lenovo had to move a lot of IBM manufacturing processes that currently exist in Virginia to Asia and still retains much of the research and development in the United States," said Warren Lau, an analyst at Maybank.

Lenovo purchased the business unit produces x86 server and compete with HP and Dell, but lost sales than both.

The IBM dominated the high end server market with market share of 57 %, according to a study from research firm Canalys. IBM will maintain the business unit and will continue to develop software and applications for latform x86.

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