IBM was tight-lipped on rumours that it is to sell its x86 server business to Lenovo as it talked through its Q1 results.
According to CRN US, Big Blue is in active negotiations to sell off its System x line, which includes Intel- and AMD-based tower, rack and blade servers. It cited multiple sources, including one "high-ranking industry executive", tracking the deal.
Lenovo, which bought IBM's PC division in 2005, has been fingered as the probable buyer, the publication said, adding that the asking price is reportedly $5bn-$6bn.
On a Q1 conference call, Big Blue stonewalled direct questions about the reported move – saying it does not comment on "rumours" – but it did hint that it will be doing some wheeling and dealing in the year ahead.
"Like all years, we have a number of actions planned to improve the business for the long term, acquiring and divesting businesses and rebalancing our resources," IBM CFO Mark Loughridge said on the call, a transcript of which can be found here.
According to the CRN US article, Lenovo would be a desirable candidate to buy IBM's x86 business because it does not compete with IBM's other activities in storage, networking and converged infrastructure. Employees at IBM's US server product engineering lab have apparently been told they will become Lenovo employees from 1 June, the article added.
In its Q1, which ended on 31 March, IBM saw hardware revenue drop 17 per cent year on year to $3.1bn as total sales fell five per cent to $23.4bn. GAAP net profit fell one per cent to $3bn.
EMEA revenue fell four per cent to $7.3bn.
Chief executive Ginni Rometty admitted the vendor did not achieve all of its goals in the period as several software and mainframe transactions moved into Q2.
"Looking ahead, in addition to closing those transactions, we expect to benefit from investments we are making in our growth initiatives and from the actions we are taking to improve underperforming parts of the business," she said.
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