The overall server market in India witnessed a year-over-year (YoY) increase of 33.7 percent in terms of revenue to reach $354.8 million in Q1 2018 versus $265.3 million in Q1 2017, according to the latest IDC Asia Pacific excluding Japan (APEJ).
Legacy infrastructures and applications are getting modernized across organizations of all sizes and scale. Compute platform remains at the core of organizational priority to support various applications to serve customers across all facets of their journey. These are some of the key observations that are driving the India server market, according to IDC.
The economic scenario in India looks promising with private sector investments helping growth despite the slowdown effect earlier. The IT Server spend is expected to grow throughout 2018 through Government’s effort to ramp up the work in smart cities and other digital India initiatives, said IDC.
The x86 server market grew significantly accounting for 92.0 percent of overall server market in terms of revenue during Q1 2018, with major deals coming from tier-1 telcos, large IT, ITeS companies, banking and retail. The x86 server market in terms of revenue witnessed a YoY growth of 33.0 percent to reach $326.3 million in Q1 2018 up from $245.3 million during Q1 2017. Professional services, telecommunications and manufacturing were the top three verticals accounting for 76.9 percent of the overall x86 server market. In terms of form factor, Rack optimized servers have shown a strong adoption in end-users and accounts for 2/3rd of overall x86 server revenues in Q1 2018.
The non x86 server market grew by 42.8 percent YoY in terms of revenue to reach $28.5 million in Q1 2018. In terms of revenue, IBM leads the market, accounting for 59.3 percent of market share, followed by HPE with its share of 21 percent during Q1 2018. Banking remains top vertical with 51.7 percent revenue share followed by education, insurance and manufacturing with 12.8 percent, 8.5 percent and 8.1 percent respectively, during Q1 2018.
“Data in organisations is growing, and it has to be harnessed to deliver business outcomes. We expect Server market in India to grow providing enterprises the effective compute platform to harness data across various workloads. Thus, vendors must understand the business drivers and provide appropriate compute platforms for end Customers” says Ranganath Sadasiva, Director, Enterprise Research, IDC India.
Source: IDC APeJ Quarterly Server Tracker, Q1 2018
In Q1 2018, Dell and HPE jointly lead the India x86 server market. Dell registered market share of 28.3 percent while HPE accounted for 27.6 percent of x86 server revenues in Q1 2018. Dell has consolidated their business in existing EMC accounts which has resulted in Dell gain the market share by approx. 12 percentage points during Q1 2018.
The major deals for HPE came from telecommunications and professional services verticals. Lenovo has grown for third consequent quarter improving its share with new product portfolio and channel programs while major wins for Cisco came from professional services and banking. Also, ODM direct market share declined from 31.0 percent in Q4 2017 to 22.1 percent in Q1 2018.
“DX initiatives across industry’s demand robust infrastructure to support application and data availability, and resource utilization are some of the crucial factors which would continue to fuel the growth of the server market in 2018.,” says Harshal Udatewar, Market Analyst, Server, IDC India.
From technology standpoint, AI, IoT, blockchain, cloud and analytics are becoming the new focus areas for the end-users as a result creating demand for high core and memory based processors for robust compute platforms. Manufacturing customers are expected to infuse their investments across ERM, SCM, automation based solutions towards accelerating operational processes and improving productivity, whereas telcos spending would be focussed towards network modernisation and new-age network technology developments fuelling the growth of India server market in coming quarters.