The servers and workstations market performance in 1998-99
was influenced by higher user demand levels and increased preference for Intel-based
systems over RISC systems, a trend in evidence last year and more accentuated this year.
With corporate users finding price/performance benefits from the Intel platform, RISC
vendors found growth elusive.
The prospects of this segment are hitched to the fate of
manufacturing, government and R&D user segments. Since none of these sectors worked
wonders, servers and workstations did not pick up. Also, with the improving performance of
Intel processors and the launch of the Pentium III, PC servers and workstations have
cannibalized market segments away from RISC/Unix to Intel/Unix or Intel/NT platforms.
High-end servers
The high-end category is defined as non-Intel servers with an ASV of Rs 4 crore
and above. This segment experienced a slight unit growth and double value growth, which
means the ASV shot up to Rs 646 lakh from Rs 449 lakh in 1997-98. The segment was
characterized by S/390 from IBM. In India this segment has seen the monopoly of IBM and
the absence of global majors such as SGI, Hitachi Data Systems and Fujitsu.
The shift from bipolar CMOS technology in mainframe market
has offered a cost-effective alternative to customers. Frequent introduction of new
systems by IBM has contributed to the transition to CMOS. Although CMOS technology has
enabled vendors to design lower cost systems, there is a compromise in terms of
performance. Moreover, as the software costs associated with OS/390 are lower, the outlook
for the high-end server market seems to be optimistic.
Also, though the sanctions on India have been lifted by the
US government, the latter is averse to exporting potentially dual-use high-end servers to
India, which means customers like research organizations will continue to suffer.
Midrange and low-end servers
The medium range servers are defined as non-Intel systems with an ASV between Rs
40 lakh and Rs 400 lakh, while the low-end servers have an ASV below Rs 40
lakh. These two
segments account for almost the entire RISC/Unix-based shipments in the market. The
segment has shrunk in unit terms from 2412 to 2141 and in value from Rs 689 crore to Rs
459 crore. Sun and HP retained their dominance in the market. In the overall server
segment, HP notched up almost 30% of the market and 33.8% in value terms. Calling it the
"most powerful system in open systems computing," HP announced the availability
of the V2500 Enterprise Server, part of the HP9000 family of servers, which has been the
engine driving HP's exceptional server performance. Also coming from the HP stable was the
N-Class-a PA 8500 RISC processor-based enterprise server that can be upgraded to the
much-awaited 64-bit processor from Intel (IA-64) when it becomes available.
Sun maintained its lead, increasing the share from 31% to
37% of the market. To check its vulnerability in the lower-end of the workstation market
it launched the competitively priced Ultra 5 and Ultra 10 workstations. Sun also
introduced a range of competitively priced SPARC-based servers and workstations.
HP has replaced SGI in the second slot for traditional
workstations and its presence in both the workstation segments ensures the top slot for it
by a substantial margin. HP has a wide range to offer in the traditional market, including
the B-class workstations suitable for the lower end, especially for 2D CAD, C-class
machines for 3D modeling and simulation, and J-class at the high end suitable for
computational analysis. HP cornered a significant 37% of the personal workstation market.
Its decision to rebrand the high-end Vectra PC and add the Kayak XA workstations to the
existing range ensured this share.
Last year SGI recorded unit sales of 355 and a market share
of 26.4% as against the previous year's 28%. Last year SGI tried to outgrow its dependence
on film and animation industry and develop new areas. The launch of PC workstations SG320
and SG540 at price points of Rs2.65 lakh and upward could have turned around its fortunes
but SGI started shipping the systems only late in the last quarter. And the looks, price
and capability of these machines combined will likely give the likes of Kayak rougher
waters to ride.
Compaq and Digital together were ranked second for personal
workstations, while Digital was fourth in the traditional segment. The Alpha architecture
supported three lines of workstations, namely, au-series, a-series and i-series, ranging
from Alpha/Unix platforms to NT. These, along with Compaq's Professional Workstation 5000
series and PW 6000, have ensured this market share. Compaq's strength in personal
workstations is expected to grow due to its strong relationship with software vendors,
value-added resellers and systems integrators.
ASVs of traditional workstations are likely to dip further
in a bid to compete with personal workstations. But once the Merced, code name for IA-64,
is launched there is likely to be a shift of the medium and lower end market to the new
platform, leaving only the very high end to traditional workstation vendors. Most of the
orders for traditional workstations are likely to come from the already installed based.
Some new applications such as animation and digital content creation may create some
demand in India, though.
PC servers
This category includes Intel-based systems with hardware modifications to support
networking and client-server applications. PC servers are positioned so that high-end
systems compete in terms of price/performance with low-end RISC/Unix servers in the
domestic market. Shipment of PC servers went up by 37.9% and in value terms it escalated
by 32% over the previous fiscal. Compaq has scored a dramatic gain in the PC server market
by shipping the highest number at 4,500 units, which is almost a fifth of the market.
Given its high average selling value (ASV), in value terms it accounted for 29.2% of the
market. HCL slipped to the second slot with 3,700 units, though in units terms it grew 13%
over the 3,268 units sold in the previous year.
Probably Compaq took full advantage of the unsaid but
common prejudice in the market that PC servers necessarily need to be an MNC brand. And
last year this sentiment was aided by the decline of price differentials between domestic
and MNC systems. Also, HCL's market in the corporate and government sectors did not live
up to expectations though the banking sector made substantial purchases. Zenith, ranked
sixth, had the best of both worlds, since it also sells HP and IBM servers. It has been
able to notch a fairly substantial figure at 1,455 of its brand with a share of 7% with a
share of 7%. Acer remains in the third slot just as it was last year, with the number of
its servers going up substantially to 2,900. Acer's repositioning exercise at the
beginning of the year seems to have worked well.
As unit shipment growth of HP and IBM was higher than the
average PC server market growth, there was an increase in market share of these two
vendors, especially so for HP, which had just 2.5% market share in 1997-98 but notched up
13.2% last year.
Compaq's rise to the number one slot is perhaps
attributable to a positive synergy between Compaq's medium and high end models such as
ProLiant 5500, 6000 and 7000 along with Digital's 3000, 5000 and 7000 series. The ASV of
the servers, too, went up sharply, with the result that the overall PC server revenue
growth almost doubled, to Rs139.48 crore.
Probably one of the best recognized servers in the market
today is Netfinity 3000. Launched last year, Netfinity 3000 helped IBM complete its server
range by filling up the gap at the lower end of the server range. Netfinity 3000 and 3500
now provide an alternative to the low-end models of Acer, Compaq and HP and offer another
option to the SME sector. Netfinity 3000 contributed almost half of the total earnings
from server shipments for the company. IBM's PC server shipments might have been more but
for the delay in the delivery of Netfinity 3000 in the first quarter.
Acer performed well in the PC server market though its
third rank for the second time running might not reflect that. In the first two quarters,
shipments grew 111% over the previous corresponding period. A majority of these shipments
went to large and medium businesses and the government. But since Acer does not have a
high-end PC server its ASV is low and it remains at a disadvantage in negotiating large
accounts.
PC server shipments of HP grew from 375 units to 2,700,
phenomenal by any standards. This was aided by strong vendor focus in the banking segment.
Moreover, success of the NetServer E50, launched in the first quarter, also helped HP
boost its server sales growth, accounting for almost 40% of the company's PC server sales.
HP won major orders from National Fertilizers, Indian Oil Corporation and Reliance
Industries. DQ
Unix Server Market Segmentation
1998-99 |
1997-98 |
||||||||||||
Units | Value rs lakh |
asv rs lakh | Units | Value rs lakh |
asv rs lakh | Units growth % |
Value growth % |
Change in ASV % |
|||||
High end range | 7 | 4525 | 646 | 6 | 2695 | 449 | 16.7 | 67.9 | 43.9 | ||||
Medium range | 338 | 16039 | 47 | 571 | 36181 | 63 | -40.8 | -55.7 | -25.1 | ||||
Low end range | 1792 | 26842 | 15 | 2082 | 30089 | 14 | -13.9 | -10.8 | 3.6 | ||||
Total | 2137 | 47406 | 22 | 2659 | 68965 | 26 | -19.6 | -31.3 | -14.5 | ||||
Intel PC Server | 20685 | 47846 | 231308 | 14991 | 36073 | 240631 | 38.0 | 32.6 | -4.0 |
Traditional and Personal Workstation Market
1998-99 |
1997-98 |
||||||||||||
Units | Value rs lakh |
asv rs lakh | Units | Value rs lakh |
asv rs lakh | Unit growth % |
Value growth % |
Change in ASV % |
|||||
Traditional | 1346 | 11454 | 8.5 | 2352 | 14515 | 6.2 | -42.8 | -21.1 | 37.9 | ||||
Personal | 2403 | 4710 | 2.0 | 3030 | 5665 | 1.9 | -20.7 | -16.9 | 4.8 |
PC Server Vendor Share
Units | Market Share% |
Value rs lakh |
Market Share% |
||
Compaq | 4500 | 21.8 | Compaq | 13948 | 29.2 |
HCL | 3700 | 17.9 | hcl | 8500 | 17.8 |
Acer | 2900 | 14.0 | hp | 6750 | 14.1 |
HP | 2700 | 13.1 | ibm | 5279 | 11.0 |
IBM | 2400 | 11.6 | Acer | 4663 | 9.7 |
Zenith | 1455 | 7.0 | Zenith | 1455 | 3.0 |
dcm | 850 | 4.1 | sni | 1230 | 2.6 |
sni | 820 | 4.0 | Others | 6021 | 12.6 |
Others | 1360 | 6.6 | |||
Total | 20685 | Total | 47846 |
Dell, Minicomp, Micron, Vel, Gateway, Nexus & Melstar
are included in Others.
The Year That Was |
* In a major realignment of its business, SGI unveiled its Intel-based graphics workstations running Windows NT at prices significantly lower than Unix-based visual computing workstations the company is largely known for. * IBM gave the AS/400 a new focus and a new name. The AS/400e is * Calling it the "most powerful system in open systems * Also coming from HP was the N-Class-a PA 8500 RISC * While everyone else in the business was busy announcing |
DATAQUEST