IBM, Lenovo server deal gets final clearance from US regulators

IBM, Lenovo server deal gets final clearance from US regulators

Summary: The Committee on Foreign Investment in the United States approved the $2.3 billion sale of IBM's x86 server business to Chinese PC maker Lenovo.

TOPICS: IBM, Security, Servers

IBM received good news from the Committee on Foreign Investment in the United States (CFIUS) on Friday regarding the proposed sale of its x86-based server business to Chinese PC maker Lenovo.

Following a period of intense scrutiny fueled by national security concerns, US regulators have approved the $2.3 billion sale, which gives Lenovo control of IBM's x86 servers, blade networking and maintenance operations.

The deal received approval in China last month.

While IBM says the sale of its low-end server business will allow the company to focus on system and software innovations such as cognitive computing, Big Data and cloud infrastructure, security concerns have hovered over the deal since it was first announced back in January.

The main issue revolves around the sensitive deployments of the x86 servers – they are not only used in the nation's communications networks, but also within the data centers that run the Pentagon's computer network.

Lenovo will now maintain those deployments, as per the terms of the deal, which critics say could lead to weakened security via hackers or Chinese spies.

But obviously US regulators found the threat to be minimal, and IBM and Lenovo said in a press release that they "look forward closing the transaction."

Topics: IBM, Security, Servers

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  • IBM selling (out) its server business to Lenovo.

    I have little doubt I am going to get severely hacked for saying this, goes anyway.

    It may be a profitable decision for IBM, but I think it is a big mistake (for everyone else) for it to offload this division to Lenovo, or anyone frankly. I believe that the latest news about Chinese-made cellphone's OS firmware having embedded malware coming from the factory. I think that providing the server operation to Lenovo will give them a larger, more powerful platform to contaminate with the same sort of plant and thus facilitate easier proliferation of attack platforms for data acquisition. It will be the same as handing them a fully prepped nuclear submarine (just add navigation and crew...). Given the aggressive nature of their penetration of western systems and networks (the US is not the only one to receive this attention), this additional weapon being added to their arsenal is more than a little worrisome, and ill advised.
    • I'd say that Lenovo won't get us preferences the way IBM did.

      and that for those situations where they are taking over government support contracts they will be undergoing close scrutiny.
  • IBM isn't "out" of the server business.

    IBM is leaving the low profit X86 server market.

    They still make some of the largest servers ever made, but these are based on the Power series. Much more powerful than what Intel has made.
  • Misfortune decision

    I find unhappy the permission given by US regulator that will give as result troubles, difficulties and intrigues in the future, has been allowed that the "vixen" enters in the "henhouse" of the business server IT, harming the domestic makers X86 gravely, that they will have even less margins of economic benefit, asphysiation the business, good play of IBM that eliminated competition, although to cost of the American business.
    luis river
    • So use an IBM server...

      They can handle more and securely.
      • RE: So use an IBM server...

        Some folks simply don't need that much horsepower. This may end up helping Dell, HP, and other x86 server vendors in the long run, as US companies may shy away from Lenovo. I can see there being lots of churn in the market segment in the next few years.
  • Huh?

    I for one find this disturbing.