India server revenue grows at 23.6 per cent YoY in Q1 2005: Gartner

16 Jun 2005

1

Mumbai: The Asia / Pacific region (excluding Japan) experienced the strongest growth rate compared to other regions in the first quarter of 2005, according to Gartner, Inc. Total server vendor revenue in Asia / Pacific totalled $1.37 billion in the first quarter, a 8.9 per cent increase over the same period last year. China contributed 40 per cent of the total revenue in the region.

"Due to the optimistic economic outlook for most countries in the region, the momentum of the markets in Asia / Pacific began moving positively in 2004 and has continued through the first quarter of 2005," said Annie Chung, principal analyst for enterprise systems research in Asia / Pacific for Gartner. "Telecommunications and government sectors were the main drivers for server demand this quarter."

China, South Korea and Australia were the top three markets in Asia/Pacific, accounting for more than 60 per cent of the total server revenue within the region in the first quarter (table 1). China remained the biggest server purchasing market, achieving a 26.8 per cent yearly growth, while South Korea and Australia came second and third respectively.

Table 1

Server revenue market share by country in Q1 2005

Company

1Q04 market share (%)

1Q05 market share (%)

1Q05-1Q04 growth rate (%)

Australia

11.2

9.7

-5.8

China

34.3

40.0

26.8

Hong Kong

3.9

4.4

20.7

India

7.5

8.5

23.6

Indonesia

2.1

1.7

-12.8

Korea

19.0

16.4

-6.4

Malaysia

3.4

2.7

-14.6

New Zealand

1.3

1.2

-0.3

Philippines

0.9

0.7

-19.9

Rest of Asia/Pacific

1.0

1.0

5.1

Singapore

4.6

4.3

2.0

Taiwan

6.7

6.9

12.4

Thailand

3.6

2.3

-30.4

Vietnam

0.4

0.5

15.1

Asia/Pacific Total

100.0

100.0

8.9

Source: Gartner (June 2005)

"In South Korea, heated competition among the vendors resulted in lower average selling prices," Annie Chung added.

Negative growth in most South Asia countries, including Indonesia, Malaysia, Philippines and Thailand, during the first quarter was caused by a strong rebound in the first quarter of 2004, when companies already did most of their spending. x86 servers were the main revenue contributors in these countries. Server revenue in Singapore continued to grow steadily at two per cent, with the public sector being the key market followed by banking and telecommunications sectors.

"The decline of vendor revenue in different markets across the region was due to fewer high-end servers were being sold; a drop in average selling price and most units were sold at the mid-low range servers," Annie Chung added. "In some markets, the variations of exchange rate might also have played a role in final vendor revenue."

IBM, Hewlett-Packard and Sun Microsystems continued to be the market leaders, although Sun lost market share in the region (table 2). Dell followed closely behind these companies with yearly growth of 54.6 per cent in revenue. The company did especially well in Taiwan and Malaysia, where more than 100 per cent growth was reported.

Table 2

Top 5 server vendors in Asia / Pacific based on revenue estimates in Q1 2005

Company

1Q04 Market Share (%)

1Q05 Market Share (%)

1Q05-1Q04 Growth Rate (%)

IBM

36.7

35.2

4.5

Hewlett-Packard

31.6

33.0

13.9

Sun Microsystems

13.6

9.4

-24.4

Dell Inc.

5.4

7.6

54.6

Fujitsu/Fujitsu Siemens

1.7

1.8

11.1

Other Vendors

11.0

12.9

27.7

Total

100.0

100.0

8.9

Source: Gartner (June 2005)

Server revenue running on the Linux platform increased just over 50 per cent compared to a year ago, with 35 per cent coming from China alone.

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