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Neha Kapoor

The server market in India and Singapore recorded a positive year-on-year growth, while the picture is less rosy for other countries in the Asia-Pacific region, says a recent Gartner Dataquest report.

INDIA and Singapore are the only two countries in the Asia-Pacific (APAC) where the server market has actually recorded a positive year-on-year (y-o-y) growth, says a recently released Gartner Dataquest report.

The final Asia-Pacific Server Market statistics report for the first quarter of 2002 puts the growth of the server market in India at two per cent in 2001-02, while Singapore has witnessed a growth of 25.9 per cent during the same period.

Overall revenues within APAC, excluding Japan, grew slightly under one per cent for Q1 2002 when compared to Q1 2002. Quarter-on-quarter (q-o-q), the report says, the picture was less rosy with revenues falling at around 10.6 per cent due to the usual seasonal cycle.

In Singapore, the strong growth has been attributed to demand in government, manufacturing and biosciences sector. The report says that though the results are encouraging, it is still too early to determine if the market has recovered. Incidentally, the first quarter also marks the final quarter of the government fiscal year and this helps to boost the server market.

"In India," says Vinod Nair, Gartner India Analyst, Hardware Platforms, "even though unit shipment declined y-o-y for India, a few high value deals have helped achieve positive growth. In addition, there has been a trend towards shifting to higher server specifications compared to previous years. Given the dull economic situation, the customer's spending his dollar wisely, keeping the long-term perspective in mind."

From a unit perspective, APAC witnessed declining shipments both q-o-q and y-o-y at around 12 per cent and three per cent, respectively.

According to Gartner Dataquest's Regional Server Programme Manager and Principal Analyst, Matthew Boon, this is mainly due to the fairly significant decline in unit shipment into China from Q4 2001 to Q1 2002.

From a y-o-y perspective, the relatively flat unit shipment in China and large unit shipment decline in Korea, Taiwan and India resulted in the three per cent unit decrease across the region.

"There was certainly a lot of momentum in China during the build up to WTO acceptance in Q4 2001. Contrasting the busy last quarter of 2001 with a holiday rich Q1 of 2002, it is hardly surprising that we saw a little softness in server sales of China," says Boon.

"I believe this was an anomaly and server sales in China will pick up steam again as we move through the year."

"We continue to see some fairly significant activity across the region towards the high-end servers, which helps to maintain revenues figures at a steady to a slightly positive level. From a revenues perspective, it takes a lot of low-end Intel servers to match a single enterprise server sale," Boon says about the disparity in unit and revenue figures in the region.

The interest in high-end servers is driven by systems consolidation and upgrading, increased Life Sciences programmes, and a slight loosening of purse strings, as corporations witness more positive signs in the economy.

The revenue growth y-o-y is definitely a good sign, according to Boon, though he cautions that we need to see at least another two to three quarters of positive growth before we are out of the woods.

"A number of countries across the region such as Australia are looking positive, and we may well see some of the early Y2K replacers hit refresh mode. The continuing push for server and system consolidation will also help to drive revenue growth through the rest of the year," he says.

As for vendor performance in the region, positions of the top four server vendors — IBM, HP, Sun and Compaq — remained fairly static in the first quarter of 2002 compared to Q1 2001.

Despite the uncertainty around the HP and Compaq merger, Compaq managed to increase its market share slightly y-o-y from a revenue perspective, while HP grew at around two per cent.

"At the end of the day, customers have stuck by HP and Compaq, and signs are indicating that things will probably remain this way.

The combination of these two organisations from a server perspective is pretty much business as usual with no great surprises in the announced roadmaps," says Boon.

nehak@thehindu.co.in

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