India's Server Market To Witness a Positive Growth

By VARINDIA - 2019-09-06

India's Server Market To Witness a Positive Growth

India's server market, the overall server market in India witnessed a year-over-year (YoY) decline of 16.2% in terms of revenue to reach USD 298.0 million in Q1, 2019 versus USD 355.8 million in Q1, 2018 and now it is expected to see 20 per cent growth in the current quarter (July-September), with Reliance Jio, Adani Enterprises, Hiranandani Group, L&T and Shapoorji Pallonji announcing plans to enter the space. As per the IDC.

 

“The impact of various domestic data centre players would be felt in Q2 (this quarter) and the later half of the year as well. Investments from Reliance would have immediate impact on the server market at the end of Q2. We are unclear about the Adani Group data centre investment plan. We are expecting QoQ (quarter-on-quarter) growth of 20 per cent for the x86 server market at the end of Q2,” said Harshal Tarkeshwar Udatewar, market analyst for servers at IDC India. The x86 server is largely deployed at traditional data centres, followed by private and public cloud providers.

 

This is good news for the overall server market in India, which saw a year-over-year (YoY) decline of 16.2 per cent in revenue to reach $298 million in Q1 (April-June) from the same period a year before, according to the latest IDC Asia/Pacific Quarterly Server Tracker. Experts said, earlier decline in the Indian server market to the absence of multi-million dollar deals from the information technology (IT) and IT-enabled services sectors.

 

Over the next three years, say sector experts, $7.1 billion (Rs 50,000 crore) would be spent in India on cloud infrastructure, the lion’s share of which would be to buy servers. They also believe these plans of large conglomerates would help in considerably bringing down prices. Which would help a host of smaller companies to host their data on cloud.

 

In the current scenario, enterprises of all sizes are investing in their DC to make it more agile, scalable, flexible thereby making business applications highly available. So, optimizing operational cost will be critical for these enterprises as their architecture evolves and grow,” says Harshal Udatewar, Market Analyst, Server, IDC India.

 

There is no sold investment could see from the global Cloud service providers, hence the growth seems to be less then 1%.When we see the performance of the vendors in this server market, it is absolutely rate race, like who could able to win the tender at the price point and balancing the APAC market deal sizes. It shows in Q1 Dell had achieved the No.1 position with 29.7% market share,where HPE had spotted in the second position with 25.6 % market share and CISCO and Lenovo in the third and Fourth position respectively.Q1 FY20 server demand fell due to telecom verticals .However, it is expected to grow to 20% QoQ growth in X86 server market in Q2FY20 as per IDC.

 

In Box: Decreasing use of the x86 server by players in the IT sector is also a contributing factor, as these were traditionally used by IT firms for hosting and testing in-house applications, an activity that is increasingly being shifted out to cloud spaces. As more businesses shift their data to cloud infrastructure, opportunity for Indian server providers will grow.

 

The non x86 server market increased YoY by 15.9% to reach USD 33.1 million revenue, in Q1, 2019. IBM tops the market with a revenue share of 76.5%, followed by Oracle with share of 17.9 and HPE with 5.6% during Q1, 2019. Banking remains top vertical with 45.8% revenue share followed by manufacturing and utilities with 22.0%, and 10.3% respectively, during Q1, 2019.

 

Lastly, the government’s push for data localisation has started showing its effects in the financial technology space. It is set to expand to other areas as well, as the demand for localising of citizen data across the board picks up pace.




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