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Lenovo to buy IBM's low-end server unit for $2.3 billion | Reuters
It would not be easy for Lenovo turn around the server unit, however. IBM's low-margin server business has posted seven quarters of losses as clients move to the cloud. "To generate costs synergy, Lenovo will need to move most of the manufacturing from IBM's existing facility in Virginia to Asia while keeping some R&D in the U.S.," Lau said. The server business being sold by IBM, which produced low-cost x86 servers, competes with Hewlett-Packard Co and Dell but lags both in market share. + http://www.bloomberg.com/news/2014-01-23/lenovo-to-buy-ibm-server-unit-for-2-3-billion-amid-pc-slump.html "[S]egment’s gross margin -- the percentage of sales remaining after taking out production costs -- also is getting squeezed. It fell 3.5 percentage points to 36 percent last year. That compares with an 89 percent margin for its software business."
IBM  Lenovo  Cloudstorage  cloudcomputing  margin  commoditization  commodity  business  SaaS  Service  Industry  Enterprise  Services  IT  Industry 
february 2014 by asterisk2a

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