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26 Mar 2019

India Server Market revenue declines Y/Y by 17.2% to reach $308.2 million in Q4 2018: IDC India Report

NEW DELHI, 26th March 2019 - The overall server market in India witnessed a year-over-year (YoY) decline of 17.2 percent in terms of revenue to reach $308.2 million in Q4 2018 versus $372.1 million in Q4 2017, according to the latest IDC Asia/Pacific excluding Japan (APEJ) Quarterly Server Tracker, Q4 2018 . The x86 server market accounts for 86.7 percent of the overall server market in terms of revenue. The contribution in the x86 market mostly came from the professional services vertical followed by manufacturing, telcos, and Government.

Investments in the infrastructure remain as the top priority for enterprise business applications, data management, content and collaboration, web infrastructure and application development and testing workloads.

The Intel-based x86 platforms are robust and provide the price-performance balance for enterprises looking to deploy these applications for their end users. However, the large enterprises from the data-intensive industries such as banking and telcos still prefer to use the non-x86 platforms to run their core applications demanding higher availability and performance.

The x86 server market in terms of revenue declined YoY by 17.2 percent to reach $267.1 million in Q4 2018 from $322.6 million in Q4 2017. Professional services, manufacturing, communications and media, and Government accounted for 84.8 percent of overall x86 server market revenue. Government saw the biggest Y/Y growth of 104.4 percent owing to the investments coming from various federal government departments and local state Government projects. The blade and rack servers which contributes for 78.6 percent revenue share has seen a surge in their ASPs due to the higher core, memory and processing configurations for newer workloads demanding higher IOPS.

The non-x86 server market also declined YoY by 17.1 percent to reach $41.1 million revenue, in Q4 2018. IBM tops the market with a revenue share of 74.3 percent, followed by HPE with share of 23.9 and Oracle with 1.8 percent during Q4 2018. Banking remains top vertical with 52.0 percent revenue share followed by manufacturing and professional services with 18.9 percent, and 9.0 percent respectively, during Q4 2018.

“In India, the “cloud-first” approach is gaining traction for new-age applications where investments on cloud infrastructure are focused towards building scalability, agility, simplified orchestration and minimizing cost,” says Ranganath Sadasiva , Director, Enterprise Solutions, IDC India.

Vendor Highlights:

Notes: IDC APeJ Quarterly Server Tracker, Q4 2018

In Q4 2018, Dell Inc. and Hewlett Packard Enterprise (HPE) tied for the pole position in the India x86 server market with revenue share of 25.3 percent and 24.6 percent to reach $67.6 million and $65.7 million respectively. Dell Inc. continued to show its good performance throughout 2018, as a result their business grew YoY by 44.2 percent at end Q4 2018. Cisco was able to register the revenue share of 8.1 percent followed by Lenovo who stood at 6.6 percent revenue share at the end of Q4 2018. ODM direct continued supporting the DC capacity expansion of tier-1 cloud providers in India and now accounts for 26.2 percent revenue share in Q4 2018.

“The increase in server ASPs across major verticals such as Professional services, telcos and banks indicates that newer workloads are gaining traction allowing the scale-up approach, resulting in the higher configuration of servers,” says Harshal Udatewar , Market Analyst, Server, IDC India.

IDC India Forecast

Spending from Central Government was an all-time high in Q4 2018 owing to the initiation of new projects related to various ministries under the central Government. First quarter of 2019 is expected to be big due to large projects in the Government sector across education and smart cities segments, while the general election in 2019 would slow down the overall growth of server market during 2019.

We are expecting telecommunications spending to come from the initiatives such as IMS stack for VoLTE, VRAN, 5G testbed programs towards 5G development and network expansion. Some of the banks refresh are expected to keep banking vertical stable for 2019 whereas manufacturing spend would be focussed towards implementation of ERP, SCM and CRM applications.

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