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US regulators OK sale of IBM's x86 server biz to Lenovo

Now all that remains is for gov't offices to ban the boxes

Internet Security Threat Report 2014

US regulators have given the thumbs-up to IBM's sale of its x86-based System x server business to China's Lenovo, Big Blue announced on Friday.

"The approval of the $2.3 billion sale to Lenovo enables IBM to focus on system and software innovations that bring new kinds of value to IBM clients in areas such as cognitive computing, Big Data and cloud, and provides clarity and confidence to current x86 customers that they will have a strong partner going forward," IBM said in a brief but breathless press release.

The sale had been under review by the US Treasury Department's Committee on Foreign Investment in the United States (CFIUS), which examines whether the sale of US businesses to foreign parties could have national security implications.

In June, the Wall Street Journal reported that the CFIUS review was dragging out because US security officials were concerned that Lenovo could give Chinese spies access to IBM servers, perhaps by installing backdoors during routine maintenance.

US officials were reportedly also worried about China getting its hands on IBM clustering technology, which they believed could give the Middle Kingdom a boost in high-performance computing.

The latter concerns were probably unfounded, since China already claims the title of the world's most powerful supercomputer. But some Reg readers may recall that regulators raised similar security issues when Lenovo bought IBM's PC business in 2005.

CFIUS ultimately approved the PC division sale, but even that wasn't enough to satisfy the US State Department, which banned the use of Lenovo-built PCs on secure government networks anyway, over China's objections. Australia, Canada, New Zealand, and the UK reportedly did the same.

There's been no word yet from government sources as to whether these bans will now also extend to System x servers, but in June HP cheekily claimed that it had already won "hundreds" of customers away from IBM since the Lenovo deal was announced in January.

The System x sale was approved by China's Ministry of Commerce in July, which left the CFIUS review as the final government hurdle it needed to clear before going forward.

"The parties now look forward to closing the transaction," IBM said. ®

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