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The overall server market in India witnessed a year-over-year (YoY) increase of 33.8% in terms of revenue to reach $310.6 million in Q1 2021 versus $232.1 million in Q1 2020 (Jan-Mar), according to the latest IDC Worldwide Quarterly Server Tracker , Q1 2021 (June 2021 release). The x86 server market contribution grew to 88.8% in terms of revenue, a growth of 3.5 percentage points over the last year’s same quarter. The highest contribution in the x86 market mainly came from the professional services and telecommunications verticals.
In the professional services vertical, the contribution of general-purpose servers was higher than the original design manufacturer (ODM) due to the investments from leading telcos, independent software vendors (ISV), system integrators (SI), IT and ITeS, and new-age IT companies. Investment from banking and discrete manufacturing were also high due to digitalization projects and application modernization. Government was one of the key verticals that contributed to this growth with multiple federal government and state government institutions investing in network infrastructure. However, most of these investments were pent-up demand that got deferred to 2021 due to the pandemic.
The x86 server market in terms of revenue increased YoY by 39.3% to reach $275.7 million in Q1 2021 from $197.9 million in Q1 2020. The growth largely came from the rack-optimised server category with revenue growth of 49.3% YoY. During Q1 2021, verticals such as resource industries, healthcare providers, and telecommunications witnessed the highest YoY growth in terms of revenue at 177.3%, 176.6%, and 132.7% respectively.
The non-x86 server market increased YoY by 1.8% to reach $34.8 million in terms of revenue in Q1 2021. IBM continues to dominate the market accounting for 57.6% of revenue share, during Q1 2021 with a revenue of $20.1 million. Oracle came at second position followed by Hewlett Packard Enterprise (HPE) with a revenue share of 11.8% and 10.5% respectively.
In Q1 2021, Hewlett Packard Enterprise (HPE) emerged as the top vendor in the India x86 server market with a revenue share of 35.8% and a revenue of $98.8 million. The top three verticals for Hewlett Packard Enterprise (HPE) were telecommunications, professional services, and discrete manufacturing. Dell Technologies came at second spot with a revenue share of 26.5% and a revenue of $73.0 million. Key verticals for Dell Technologies were professional services, banking, and discrete manufacturing. Lenovo and Cisco both shared the number three position with a revenue share of 7.9% and 6.9% and revenues of $21.7 million and $19.0 million respectively.
“Q1 2021 exhibited strong growth both in terms of units and revenues. We continue to expect the momentum for 2021 though it will be marked with a declining market for Q2 owing to the lockdown. However, market sentiments look positive as we expect CY2021 to witness a growth of 29.6% in terms of value during 2020-21,” says Dileep Nadimpalli, Senior Research Manager for Enterprise Infrastructure at IDC India.
IDC India Forecast
India’s economy was hit by the second wave of COVID-19 lockdown which led to certain deals stalling. The roll-out of coronavirus vaccines projects economic growth for 2021 and growth for the server market in the second half of 2021. From an enterprise spending perspective, we anticipate investments in compute to come from global hyperscalers and local DC players, telecommunications vertical, banking, and manufacturing verticals. Telecommunications spending would be focused on modernisation of network, network management, security, analytics, 5G and others. At present, India’s x86 server market is expected to witness a YoY growth in value by 29.6%, during the period 2020-2021, according to the latest IDC WW Quarterly Server Forecast, Q1 2021 (June 2021 Release).