IBM still looking to sell low-end server business

Dell now flagged as potential buyer for Big Blue's x86 server business

IBM is renewing efforts to find a buyer for its low-end server business, with Dell now interested in acquiring it, according to sources said to be close to proceedings.

The giant IT firm was reported to be in talks with Chinese firm Lenovo last year regarding the transfer of its low-end server business, amid talk of dwindling profit margins. The deal eventually fell through, although the two firms were reported to have come close to a deal.

Now IBM is said to be pursuing a sale again, this time with Dell in the picture as a potential buyer, according to sources quoted by The Wall Street Journal.

But details are sketchy and while the rumours seem to centre on IBM's System X line of x86 servers, the firm has just announced an overhaul of these systems to add greater performance, scalability and resilience.

When V3 contacted the firm for confirmation, IBM declined to comment on whether it was looking to sell off the server business, with a spokesman simply stating that it did not respond to rumour or speculation.

The Wall Street Journal said Dell could be an interested party, since the acquisition could help it generate greater economies of scale as it shifts to focus more on large enterprise customers. But it also said it is unclear whether Lenovo is still a potential candidate or not.

Lenovo famously acquired IBM's PC division with its highly regarded ThinkPad laptop brand almost a decade ago and has continued to successfully market these to business customers. It is in fact one of the few PC vendors that is actually expanding sales of PCs. The firm also has its own x86 server business, which might get a boost by acquiring that of IBM.