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Lenovo Set To Close $2.1 Billion Server Deal With IBM

Posted by samzenpus on from the power-up dept.

An anonymous reader writes Lenovo has announced that it will be closing the acquisition deal of IBM's x86 server business on October 1. The closing purchase price is lower than the $2.3 billion announced in January because of a change in the valuation of inventory and deferred revenue liability, Lenovo said. Roughly $1.8 billion will be paid in cash and the remainder in stock. Lenovo says it had "big plans" for the enterprise market. "We will compete vigorously across every sector, using our manufacturing scale, and operational excellence to repeat the success we have had with PCs," the company added.

3 of 49 comments (clear)

  1. Re:Server Admins Everywhere are Saying... by ArcadeMan · · Score: 5, Interesting

    In the near future, there's gonna be a "War Games" happening inside every fucking hardware component of our systems. Over 50% of the energy will be wasted on spyware fighting each other, 45% will be waste heat, 4% will be wasted by non-military tracking by Google/Facebook/etc and only 1% of the energy will go toward actually doing something useful.

    --
    Get free satoshi (Bitcoin) and Dogecoins
  2. Re:IBM is dying by alexander_686 · · Score: 5, Interesting

    IBM's stated goal is to ditch the low end commodity business and invest in high end high touch business. i.e. custom solutions provide by consultants and custom hardware. IBM has been shedding their commodity business for years. When Lenovo bought their desktop / laptop business – servers where not commodities. Now the x86 servers are – so away they go.

  3. Re:IBM is dying by timeOday · · Score: 4, Interesting
    Which can easily result in the business streamlining itself out of existence:

    Clayton Christensen explains why the basic thinking taught in business schools and promulgated by consultants is killing innovation and the US economy:

    Christensen retells the story of how Dell progressively lopped off low-value segments of its PC operation to the Taiwan-based firm ASUSTek - the motherboard, the assembly of the computer, the management of the supply chain and finally the design of the computer. In each case Dell accepted the proposal because in each case its profitability improved: its costs declined and its revenues stayed the same. At the end of the process, however, Dell was little more than a brand, while ASUSTeK can-and does-now offer a cheaper, better computer to Best Buy at lower cost.

    Why is this happening? According to Christensen, the phenomenon is being

    "driven by the pursuit of profit. That's the causal mechanism for these things... The problem lies with the business schools which are at fault. What we've done in America is to define profitability in terms of percentages. So if you can get the percentage up, it feels like we are more profitable. It causes us to do things to manipulate the percentage....

    Thus when a firm calculates the rate of return on a proposal to outsource manufacturing overseas, it typically does not include:

    • The cost of the knowledge that is being lost, possibly forever.
    • The cost of being unable to innovate in future, because critical knowledge has been lost.
    • The consequent cost of its current business being destroyed by competitors emerging who can make a better product at lower cost.
    • The missed opportunity of profits that could be made from innovations based on that knowledge that is being lost.

    cite