Indian server market revenue increases by 14.2% in Q1 2017

The overall server market in India posted a 14.2 per cent quarter-on-quarter (QoQ) rise in revenue to reach $215.6 million as of the first quarter of 2017.

This compares with $188.8 million posted during the fourth quarter of 2016, according to IDC Asia Pacific excluding Japan (APEJ) Quarterly Server Tracker.

The x86 server market accounted for 90.7 per cent of the overall server revenue during Q1 2017 with growth being majorly driven by spending of public cloud service providers for their data centres.

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 per cent 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 optimised servers are mostly preferred for cloud workloads which are gaining traction, accounting for QoQ growth of 413.6 per cent in terms of revenue for Q1 2017 over previous quarter.

The non-x86 server market declined by 22.3 per cent YoY in terms of revenue to reach $20 million in Q1 2017. In terms of revenue, IBM-led the market, accounted for 50 per cent of market share, while HPE remained the only vendor who grew its share to 17.8 per cent during Q1 2017.

In non-x86 server market banking industry on its own contribute for 57.3 per cent of the revenue, followed by manufacturing and professional services verticals.

"Professional services, telecommunications and banking remained the top three verticals, accounting for about 70 per cent of the overall market. The market is likely to be driven by digital initiatives, SAP HANA implementations and cloud workloads in the coming quarters," said Rishu Sharma, Associate Manager, Enterprise Infrastructure at IDC.

In India x86 market, HPE increased its market share from 37.8 per cent in Q4 2016 to 40.3 per cent in Q1 2017 in terms of revenue, followed by Dell with a market share of 20.5 per cent 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.

IDC India Forecast
Digital transformation initiatives from government towards smart cities, skill India, e-records, education and healthcare are likely to drive the market.

Also, increased banking focus towards high compute to handle voluminous transaction, analytics, and Customer Relations Management 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.