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IBM Reportedly Wants Out of x86 Server Hardware

Lenovo is likely to buy it since it’s the only company in active acquisition negotiations

IBM reportedly wants to dump its x86 server business and, according to CRN, Lenovo, the Chinese company that bought its PC operation in 2004 and now wants to grow its server interests, is likely to buy it since it's the only company in active acquisition negotiations.

Big Blue will supposedly only deal with companies it doesn't consider a threat to any part of its business.

Later Thursday the Wall Street Journal jumped on the story saying it heard the companies were in advanced discussions, but of course there's no way of knowing if a deal will be clinched. It noted that it would be CEO Ginni Rometty's first major divestiture.

Both papers claim multiple sources with knowledge of the situation.

Lenovo would get IBM's System x line with its Intel- and AMD-based tower, rack and blade servers.

IBM is reportedly asking $5 billion-$6 billion.

CRN heard from a separate source that IBM has already told employees in its server product engineering lab in Research Triangle Park in North Carolina that they will be Lenovo employees on June 1.

Lenovo's North American headquarters are down that a way.

IBM will reportedly still service the machines.

System x sales were down 3.7% last year.

The castoff is supposed to be part of IBM's Roadmap 2015, widely known internally as Roadkill 2015, intended to boost earnings to $20 a share and get revenue out of cloud, analytics and Smarter Planet widgetry.

EMC is selling storage embedded with Lenovo servers and Lenovo is reselling the networked storage solution in China.

CRN says rumor have swirled around IBM selling its x86 servers off for years.

Meanwhile, IBM means to cut 14% of its French workforce over the next two years or 1,200-1,400 people to reduce expenses in a weak economic sector, according to Agence France Presse, which got it from the French Democratic Confederation of Labor. IBM would rather play in promising markets like Africa.

More Stories By Maureen O'Gara

Maureen O'Gara the most read technology reporter for the past 20 years, is the Cloud Computing and Virtualization News Desk editor of SYS-CON Media. She is the publisher of famous "Billygrams" and the editor-in-chief of "Client/Server News" for more than a decade. One of the most respected technology reporters in the business, Maureen can be reached by email at maureen(at)sys-con.com or paperboy(at)g2news.com, and by phone at 516 759-7025. Twitter: @MaureenOGara

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