Not happy about that, but I guess it was inevitable.
Lenovo has been selling a "ThinkServer" line for quite a while, which are basically clones of the very low end System x towers and rack systems. I think it was branded as some kind of cross licensing deal, but I guess we know what was really going on.
Hopefully Lenovo will keep the design and engineering teams in North Carolina -- they're still working on most of the business-grade hardware designs for the PC business, and the System x/BladeCenter guys are there too, so it's a good fit.
I guess the only good thing is that even with the recent cheapening of the designs, the ThinkPads and ThinkCentres do retain a good chunk of the original IBM design...they're still my favorite laptop vendor. So hopefully, if Lenovo is smart, they won't mess around with quality too much. IBM's System x gear is (was?) top quality, easily as good as or better than the HP ProLiant. And at the high end of the range, their hardware designs are really interesting. The downside is that it's very expensive compared to Dell, slightly more than HP. For that price difference though, you get US-based tech support who really understands their stuff. I've never had a problem with IBM System x and BladeCenter support (It's a dedicated group sitting in Atlanta if you're in the US,) but have wanted to reach through the phone and strangle HP and Dell "support" representatives.
The fact that IBM is keeping FlexSystem, System z and System p in house seems to me like they're betting that everything will collapse into the cloud, either public or private, and no one will need physical x86 boxes anymore. FlexSystem is basically BladeCenter 2.0 + Cloud-in-a-box, and competes with the VCE stuff. It looks neat, but just like the VCE stuff, I can't afford it to play around with in the lab. However, I wonder what's going to happen with OpenStack gaining popularity now -- people won't be locked into VMWare or IBM and they'll actually want cheap x86 boxes that they can turn into a loose collection of VM containers. Plus, you have places like the one I work in, with highly distributed branches and crappy network connectivity all over the universe that can't do the consolidation thing cost-effectively who will be buying physical boxes for some time to come.
This is kind of a bummer to me though -- I live in New York, and IBM still has a fairly big presence here, since their HQ and main research lab are in Westchester and Dutchess counties respectively. Just like the rest of the US though, that presence keeps dropping with every physical product line they sell off. I don't wish ill on other countries, but part of me is hoping for a Chinese economic collapse just so MBA management consultants will stop telling executives that you can't manufacture physical products, for any price. Lack of physical products or selling that off to the lowest bidder means no long-term hardware innovation, and we're going to end up stuck in a rut forever. (I was a rust belt kid and watched all the manufacturing move to the South, then overseas. Not fun.)