x86 server market in India plummets 16.8% in Q4 2016

Article By : EE Times India

Revenue, however, has grown 4.2% quarter-on-quarter, thanks to sales of high-density servers.

India's server market has dropped by 16.8% quarter-on-quarter in the last three months of 2016, with 30,501 units shipped compared to the 36,668 units in the third quarter of 2016, according to a new report from International Data Corporation (IDC).

Revenue, however, grew 4.2% quarter-on-quarter, thanks to sales of high-density servers.

Enterprise initiative towards digital transformation, analytics, cloud, BI and data centre consolidation are the key trend observed in Indian server market. Pricing and tailor-made solutions has become crucial for the vendors as they are frequently challenged by ODM’s and white box players. Amidst of all these industry concerns, ERP upgrades in manufacturing and tech refreshes in banking were the major contributors for server market demand during Q4 2016.

The non x86 server market also declined by 31.0% quarter-on-quarter in terms of unit shipments and 34.7% in terms of revenue in Q4 2016. Banking, manufacturing and telecommunication verticals were the major contributors to the non-x86 market. IBM dominated the market in terms of revenue with the share of 62% at end Q4 2016, according to IDC.

“The market corrected itself, owing to the absence of large multi-million dollar deals. Growing SMB’s, IT investments from enterprises towards data centre consolidation are boosting the growth of the server market. Deals from government towards digitalisation, e-governance, smart city and surveillance projects are in pipeline that would fuel the growth of Indian server market in the coming quarters," said Harshal Udatewar, server market analyst at IDC India.

"The Indian server market witnessed a difficult quarter, as organisations continue to consolidate their prevailing workloads on fewer servers. We are also seeing increased acceptance of cloud among the SMBs, resulting in new buyer segments and demand for third party data centres," said Rishu Sharma, associate manager for enterprise infrastructure.

IDC India server (cr)
Figure 1: x86 server vendor market share (Source: IDC APeJ Server Tracker Q4 2016)

HPE maintained its lead in India's x86 market with 35% share in terms of unit shipment in the fourth quarter of 2016, followed by Dell with a market share of 27%. Lenovo’s market share dropped from 12% to 9% year-on year, while Cisco’s market share increased by 13.6% year-on-year, and Huawei and Acer accounted for the market share of 3.3% and 2.7% respectively, at end Q4 2016.

On the revenue front, HPE led with 38% market share, followed by Dell at 31% market share. Cisco registered market share of 10%t overtaking Lenovo who accounts for 6% of market share by revenues during Q4 2016.

Analysts at IDC India expect that government-led digitisation initiatives will pick pace in the coming quarters, while SAP HANA opportunities, investments in HPC and DR implementations will pull the market further in the next months of 2017.

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