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Archive for January 2014

In a deal that is a win-win for all concerned, Chinese PC maker, Lenovo Group Ltd. will purchase IBM’s low-end, commodity x 86 Server portfolios, related resources and operations for $2.3 billion, which includes $2.07 billion cash with the remainder in stocks.

The sale of the IBM x86 servers has been rumored for well over a year as Big Blue grappled with continuing pressure on its low-margin x86 servers. In its most recently completed fourth quarter, IBM’s revenue dropped 5.5% to $27.7 billion. Slumping hardware sales was the chief culprit for the revenue miss. IBM’s x86 server sales declined by 16% in the fourth fiscal quarter alone, following seven straight quarterly revenue declines.

Under the terms of the agreement, Lenovo will purchase:

  • IBM’s System x servers
  • The BladeCenter and Flex System blade servers and switches
  • The x86-based Flex integrated infrastructure systems
  • The NeXtScale and iDataPlex servers and associated software
  • IBM’s blade networking and maintenance operations

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Pardon the pun, but there’s nothing elementary about IBM’s newly formed, New York City-based Watson Business Unit (BU).

IBM is committing $1 billion and 2,000 employees, as well as its considerable research and development (R&D) talents and marketing muscle to Watson, thus putting the full weight of its global technology and services brand behind the newly formed BU and initiative.

IBM CEO Virginia Rometty said that Michael Rhodin, most recently SVP of IBM’s Software Solutions Group, will take charge of the Watson Group. According to Rometty, the company established Watson as a separate BU based on the strong demand for cognitive computing. The IBM Watson Group will develop cloud-based technologies that can power services for businesses, industries and consumers.

Rometty also said the new IBM Watson Group notably integrates design, services, core functions, technologies, and a fully formed ecosystem which includes a design lab as well as hundreds of outside external partner applicants, foundations and advisors. All of these elements are crucial if Watson is to succeed.

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