India server market revenues up 14.2% in 1Q17, says IDC

The overall server market in India saw an on-quarter increase of 14.2% in terms of revenues to reach US$215.6 million in the first quarter of 2017 as against US$188.8 million in the fourth quarter of 2016, according IDC. The x86 server market accounted for 90.7% of the overall server revenues during the first quarter of 2017 with growth being majorly driven by spending of public cloud service providers for their data centers.

The public cloud uptake and digital transformation across banking and government verticals are driving the server market in India. The x86 server market in terms of revenues witnessed an on-year growth of 3.9% to reach US$195.6 million in the first quarter of 2017 up from US$188.2 million during the first quarter of 2016.

The enterprise migration to cloud and role of emerging technologies such as artificial intelligence (AI), IoT and analytics are attracting the global public cloud providers to expand their footprints in India. Density optimized servers are mostly preferred for cloud workloads which are gaining traction, accounting for on-quarter growth of 413.6% in terms of revenues for the first quarter of 2017 over the previous quarter.

The non-x86 server market declined by 22.3% on year in terms of revenues to reach US$20 million in the first quarter of 2017. In terms of revenues, IBM led the market, accounting for 50% of market share, while HPE remained the only vendor who grew its share to 17.8% during the first quarter of 2017. In non-x86 server market banking industry on its own contribute for 57.3% of the revenues, followed by manufacturing and professional services verticals.

Rishu Sharma, associate manager, Enterprise Infrastructure added, “Professional services, telecommunications and banking remained the top three verticals, accounting for about 70% of the overall market. The market is likely to be driven by digital initiatives, SAP HANA implementations and cloud workloads in the coming quarters.”

Major vendors

In India x86 market, HPE increased its market share from 37.8% in the fourth quarter of 2016 to 40.3% in the first quarter of 2017 in terms of revenues, followed by Dell with a market share of 20.5% during the first quarter of 2017. Though the market increased on year in terms of revenues, most of the major vendors failed to maintain their market shares, while ODMs have been successful in growing their market shares from 0.3% in the first quarter of 2016 to 14.5% in the first quarter of 2017 and Cisco increased its market share to 8.9% in the first quarter of 2017, mainly driven by its blade revenues.

“ODMs have disrupted the India server market during the first quarter of 2017 by strategically positioning themselves in public cloud and third party data center space and are challenging the established vendors with their attractive pricing,” said Harshal Udatewar, server market analyst, IDC India

Digital transformation initiatives from government towards smart cities, skill India, e-records, education, healthcare is likely to drive the market. Also, increased banking focus towards high compute to handle voluminous transaction, analytics, and CRM applications are vital factors leading towards the server market growth in the coming quarters. Professional services including IT, ITeS, third party datacentre and public cloud service providers would continue to fuel the server market growth in India.

Categories: IT + CE Server, IPC, cloud computing

Tags: 1Q17 2017 Cloud IDC India infrastructure revenues server x86

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