After last year’s failed attempt and the recent rumors of interest from other potential buyers such as Dell and Fujitsu, an agreement was reached between IBM and Lenovo to purchase IBM x86 server division for a total of about $2,3 billion. Of these, about $2 billion will be paid in cash and the rest in Lenovo shares. The company headed by Virginia Rometti will keep on developing its own both Windows and Linux software for those servers.

In essence, IBM sells to Lenovo 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.

At the conclusion of the transaction, Lenovo will assume the customer support and maintenance operations. IBM will continue to provide maintenance on behalf of Lenovo for an extended period of time, although not specified, so the transition can be as painless as possible.

Approximately 7,500 IBM employees in various parts of the world are expected to receive job offers by Lenovo. At least this is what was stated in the press release issued by IBM. Let’s hope for them that it’s true.

The relationship between IBM and Lenovo started in 2005, when IBM sold its PC division to Lenovo, making the Chinese company the first worldwide manufacturer in this field. Since then, the two companies have collaborated on other occasions and for that reason Lenovo was considered the favorite for this new deal since IBM announced its intention to sell the x86 server division to focus on its high-end ones.

The profits in the field of low-end servers, such as those based on x86 technology, meaning processors of types similar to those of common PCs, have been shrinking for some time for IBM but they’re still very attractive to Lenovo, which with this agreement significantly increases its share in the server market.

For IBM, it’s a new reorganization that will allow the company to focus on one part on its high-end servers but also on services connected to the supercomputer Watson, lately in great big expansion, and cloud services.

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