Indian Server Market Revenue Increases by 14.2% in Q1 2017

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According to the latest IDC Asia Pacific excluding Japan (APEJ) Quarterly Server Tracker, Q1 2017, the overall server market in India witnessed a quarter-on-quarter (QoQ) increase of 14.2% in terms of revenue to reach $215.6 million in Q1 2017 as against $188.8 million in Q4 2016. The x86 server market accounted for 90.7% of the overall server revenue during Q1 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 revenue witnessed a year-over-year (YoY) growth of 3.9% to reach $195.6 million in Q1 2017 up from $188.2 million during Q1 2016.

The enterprise migration to cloud and role of emerging technologies such as Artificial Intelligence, 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 QoQ growth of 413.6% in terms of revenue for Q1 2017 over previous quarter.

The non x86 server market declined by 22.3% YoY in terms of revenue to reach $20.0 million in Q1 2017. In terms of revenue, IBM led the market, accounting for 50% of market share, while HPE remained the only vendor who grew its share to 17.8% during Q1 2017. In non x86 server market banking industry on its own contribute for 57.3% of the revenue, 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 Q4 2016 to 40.3% in Q1 2017 in terms of revenue, followed by Dell with a market share of 20.5% during Q1 2017.Though the market increased Y-o-Y in terms of revenue most of the major vendors failed to maintain their market share, while ODMs have been successful in growing their market share from 0.3 percent in Q1 2016 to 14.5% in Q1 2017 and Cisco increased its market share to 8.9% in Q1 2017, mainly driven by its blade revenue.

“ODMs have disrupted the India server market during Q1 2017 by strategically positioning themselves in public cloud and third party data center space and are challenging the established vendors with their attractive pricing,” says Harshal Udatewar , Server Market Analyst, IDC India

IDC India Forecast

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.

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International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,100 analysts worldwide, IDC offers global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. IDC's analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a subsidiary of IDG, the world's leading technology media, research, and Events Company.