IBM unlikely to sell all x86 business: Analyst

Low-end x86 hardware will probably be the focus of talks between IBM and Chinese computer maker Lenovo Group Ltd., but it is unlikely that Big Blue intends to sell off its x86 business entirely, according to a tech industry analyst.

IBM was reported this week to be discussions with Lenovo about its server business, but it was not immediately clear whether a deal will materialize.

It is possible that IBM would want to get rid of its commodity x86 business where profits are currently low, Dan Olds, principal analyst for technology analyst and research firm Gabriel Consulting Group. However, he said, IBM will likely want to keep control of its higher-end x86 assets.
(The IBM PureData System)

The analyst said he could see IBM wanting to leave the commodity tower server market and the commodity one and two-way rack mount server space, but definitely not the x86 blades and specialize systems space such as the iDataPlex.

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These areas are where IBM has the opportunity to sell its “secret source” that differentiates it from its competitors, Olds told Networkworld.

iDataPlex is a family of servers that has a half-depth server design aimed at cutting cooling cost. The products are intended for big Internet companies and business building private clouds. PureSystems are servers based on both x86 and IBM Power Chips that are engineered to perform specific computing tasks such as data analysis and online transaction processing.

It was earlier reported by online technology news site CRN that IBM wants$5 billion to $6 billion for its server business.

In 2005 Lenovo purchased IBM’s PC business for $1.25 billion. IBM left the PC space after it experiences declining profits.

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