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IBM exploring sale of low-end server unit

Jan. 20, 2014 at 10:30 AM

ARMONK, N.Y., Jan. 20 (UPI) -- U.S. technology giant IBM is looking into the possible sale of its low-end server unit, sources close to the discussions told the Wall Street Journal.

A year ago, IBM was close to a deal to sell the low-margin business to Chinese technology firm Lenovo Group, but that deal fell apart when the two could not agree on a price, which was said to be around $2.5 billion, the Journal reported.

Currently, Dell Inc., which went private in 2013, is exploring the option of buying the IBM business unit that is facing challenges to remain profitable as several huge customers, such as Google, now construct their own systems and other companies have turned to cloud computing, which has reduced the need for on-site servers.

The low-end server business generated an estimated $4.9 billion in revenue for IBM in 2012 out of a total revenue of $15.4 billion IBM took in on all of its server sales, the Journal said.

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