India Server Market grew Y/Y with Revenue growth of 33.7% in Q1 2018

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The overall server market in India witnessed a year-over-year (YoY) increase of 33.7% 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) Quarterly Server Tracker, Q1 2018. The x86 server market grew significantly accounting for 92.0% 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.

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.

The non x86 server market grew by 42.8% 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% of market share, followed by HPE with its share of 21% during Q1 2018. Banking remains top vertical with 51.7% revenue share followed by education, insurance and manufacturing with 12.8%, 8.5% and 8.1% respectively, during Q1 2018.

The x86 server market in terms of revenue witnessed a YoY growth of 33.0% 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% 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.

“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.

Vendor Highlights:

In Q1 2018, Dell and HPE jointly lead the India x86 server market. Dell registered market share of 28.3% while HPE accounted for 27.6% 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%age 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% in Q4 2017 to 22.1% 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.

IDC India Forecast

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.

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.

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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 wholly-owned subsidiary of International Data Group (IDG), the world's leading media, data and marketing services company.