IBM planning to sell off its low-end server business

20 Jan 2014

IBM is understood to be planning to sell off its low-end server business and one of the companies that might buy the division could be Dell.

Almost a year ago, IBM was in talks to sell its x86 server business to Lenovo for around US$2.5bn but talks broke down.

The low-end server business is a growing one and could give Dell greater economies of scale in the corporate IT market.

According to the Wall Street Journal, IBM is seeking to exit low-margin businesses like it did with its PC division, which it sold to Lenovo in 2005 for around US$1.75bn.

IBM’s low-end server business generated around US$4.8bn of IBM’s US$15.4bn overall sales in 2012, according to Morgan Stanley.

The business is a mainstay for the internet’s core infrastructure but major buyers like Google now manufacture their own x86 servers.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years