'There is hope for server market'

BANGALORE: In spite of all the negative growth for the server sector, there is hope in the domestic market with some of the key accelerators being the banking and telecom industry investing heavily, according to HP India Director, Sales and Enterprise Business Group, Nilam Dhawan. She was speaking at the IDC’s annual industry briefing session, Directions 2003. She added, "In fact, it was the finance and banking industry which pushed the IT market growth. Besides, SEBI and RBI have pushed the data recovery implementation to these industries, fuelling a further growth."

She said, "The other key drivers being the government and academic institutions who have increased their spending on hardware requirements. Besides the mobile service providers expanded their infrastructure due to increase in demand which in turn has fuelled the demand for storage and server consolidation."

"The fallout of the dotcom meltdown saw that outsourcing of software and ITES concept picket up here in India and is now a major revenue earner. However, the global economic downturn had an impact on the vertical industry particularly the manufacturing industries and the chain reaction spreading to general industry slowdown, have all contributed to the negative growth", she opined.

A quarterly analysis of Indian server market by the IDC group, from 1999 Q3 to 2002 Q1 shows a marginal increase and gradual dip in the revenue as well as unit shipment of servers. While in Q3 1999 6600 units were shipped and the revenue was $60.5 million, it bettered in Q1 2000 with 9000 units shipped and corresponding revenue being $68.4 million.

The report points out an the all time high growth in server market during Q1 2001 with 11400 units shipped and a revenue of $77.6 million. There is a sharp downfall in Q2 2001 as a result of post dot com recession and according to the report, with enterprises deciding to go for critical investment in select segments, there is a marginal increase in shipments (9800) and remarkably the revenue growth is $77.7 million. The first quarter of 2002 shows once again a gradual dip, owing to continued recession and tight budgetary controls. The report, however also forecasts that the server demand will rebound by 2003 in APAC market and China leading the bandwagon.

Addressing the gathering, IDC (India) manager, Computing products, A.S. Srinivas, said, "Storage solution is one of the industry segment to have greatly benefited from the 9/11 incident and our research shows that corporate plan on spending in disaster recovery (DR) solution has increased by 65 per cent. The reasons being increased awareness among enterprises that information was central to the organization’s revenue model and increased security threats in all forms. However, the plan may not convert to actual spending. Presently, we see a fragmented approach towards all the backup and DR solutions and there is a greater need for an integrated approach."

He said, "Though India is still in DAS stage, we see a SAN/NAS convergence and co-existence in short span of time as the awareness is increasing and the future is towards accessing the same storage in different ways for different application." The worldwide storage software market in high end segment is put at $4.55 billion with a CAGR of 11.2 per cent - from $2.68 billion. The storage resource management market is at $2.52 billion up from $1.12 billion.