IBM and Lenovo have inked a licensing deal allowing Lenovo to manufacture and sell some Big Blue x86 servers.

IBM hopes that the agreement will help expand its footprint in the server market, particularly in SME segment.

The deal grants Lenovo a manufacturing license for one- and two-socket tower and rack servers, and will be the company's first foray into the worldwide server market outside China.

Unlike Lenovo's absorption of IBM's PC arm, IBM insists that it is not exiting the server market and that the System x brand, as well as volume and high-end x86 systems, will continue to be an area of focus.

Lenovo's servers will feature their own branding, with a Lenovo-managed supply chain, including service and support, and a configuration and setup utility and systems management suite chosen by Lenovo.

IBM will support Lenovo's server sales with financing, maintenance and service contracts through IBM Global Technology Services and IBM Global Financing.

Marc Godin, currently vice president of marketing for the worldwide notebook business unit, will lead the new server business unit.

The new range is expected to appear in the channel towards the end of the year, which should be prefect timing as analysts are predicting that x86 server sales in China will skyrocket over this year.

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