INDIA: According to an IDC report, the overall revenue of the server market touched $727 million in 2007 recording a 24 percent increase over 2006. A recent joint study conducted by IDC and AMI Partners reflected that there are 1.9 million SMBs and 30,000 mid-market entities in India. Also, as per analyst estimates, SMBs in India will spend up to $8 billion to beef up IT infrastructure, to a robust 24 percent from last year.

The changing trends
Emerging market trends and the surging need for energy efficient data centers and virtualization are the prime factors that have been propelling the server industry in the country. The increasing number of servers accelerates the heat generation and thereby raises the issue of cost efficiency. India being a growing economy, a lot of progress is happening here in the areas of building infrastructure, government initiatives and retail revolution. All the growth factors clubbed with the necessity to build up an
energy- efficient and cost saving IT implementation is driving the server industry on a large scale.

Vendors are making all efforts to harness maximum profitability out of the emerging trends and are coming up with servers that yield better performance and are easy to manage.

Speaking on the availability of energy efficient servers, Mukul Mathur, Director-Channels and Marketing, IBM India/South Asia said, "With our System x and System p servers, we can help cut costs, increase performance and help control power usage. And, by consolidating and virtualizing on IBM System x and BladeCenter servers, customers can increase the utilization of their hardware and decrease the number of physical assets they need to watch over. This translates into real savings through better energy conser­vation and IT resource usage across the data center."

Non-traditional vertical
Telecom, BFSI and manufacturing have been the traditional drivers of servers in Indian market. However, the year 2007 saw retail and construction as the emerging verticals. In addition to that vendors are observing growth in the adoption of server technology in government, media and entertainment industries. Specific industry segments including education, retail and banking are witnessing a constant demand for servers that undertake specific applications for print, e-mail, etc that ensure that a downtime in one doesn't affect entire system.

"Even the government sector is now posing as a major contributor for the server market in the country. With the increasing number of schools, computerization happening at different scales and e-gov projects coming up at large scale, the entire server sector is seeing a boost. IT and ITeS are the other sectors that contribute to the growth of server industry. The next huge demand is coming from construction and real estate business," says Ashish of Sun Microsystems.

Virtualization ahead
The reasons blade servers are doing better business in the market is because they perform better than the traditional servers and it optimizes space utilization for data centers besides being energy efficient. With power cooling becoming the most talked about technology, blade servers have been able to create a better market in the server segment. Virtualization still comprises a small market share but the server players agree that this is the next big thing happening in the server domain. Virtualized servers have the capacity to increase utilization of a server by 20 to 25 percent and observing the non-utilization of energy by tradi­tional servers and increa­sing computing across all the verticals, they promise profitable business.

Commenting on the adoption rate of virtualized server, George Paul, EVP-Marketing, HCL Infosystems said that it was slow till key OS vendors announced virtualization support as a standard feature, this has led to the increa­sed propagation of virtualization to a larger segment of the market. Indian players under­stand the efficiency that virtualization can bring to their organizations and the adoption rate signifies the maturity level at customer's end.

The main factors that drive the virtualization segment is the infrastructure flexibility and lower costs. It enables the organizations to run multiple applications and workloads on single systems safely-radically increasing efficiency and utilization rates while lowering overall costs.

Challenges at SMB front
With the increasing adoption of ERP and other business applications, small and medium businesses (SMBs) have emerged as the key focus area for the server domain. However, in the SMB environment, complexity of IT is a matter of concern, and procuring, deploying, managing and cost implications prevent enterprises to deliberate on decisions.

Managing energy in the data center is a growing concern across companies of all sizes in India. "SMB is a major market but it has its own limitations. Lack of quality manpower in SMB space to manage the IT infrastructure is an issue and therefore, the vendors have to simplify IT to an extent that it is managed easily by the available resources," said Pallab Talukar, Director, Enterprise Solutions Group, Dell India.

SMBs today are looking for customized solutions and products that cater to their unique IT requirements. This has led to an increase in the IT spending among SMBs. Kathuria from Microsoft said that keeping their requirements in mind, Microsoft is looking forward to announce the launch of Small Business Server 2008 and Essential Business Server 2008 later this year, which have been specifically designed for SMB customers with built-in virtualization capabilities.

Vendors need to focus on continuous learning and training programs for their partners to enable them to provide the desired consultancy to the business organizations.