Back to Buoyancy: What FY 18 Held for the Server Market

FY 18 saw the much-needed uptick in the Server market as the market posted double-digit growth. With a 56% growth in revenues, the overall Server market garnered Rs 8,450 crore as against Rs 5,400 crore.  Much of the growth in the x86 server space has come through aggressive buying form data center service providers, who upped the computing capacities to meet growing demand for public cloud services.

MARKET DYNAMICS

The OND 17 quarter posted most impressive performance. According to an IDC observation, it stated that: “The Q4 2017 quarter has been record-breaking for both non-x86 and x86 server product categories. Non-x86 platform remains at the top of mind for many end-users looking for data workloads such as databases, data warehouses, transaction processing, and high-performance computing. Banks are the primary buyers in this category and high availability with minimum downtime, maximum uptime are key considerations.”

IDC further stated that the x86 server market in terms of revenue witnessed a YOY growth of 89.3 percent to reach $321.9 million in Q4 2017 up from $170.1 million during Q4 2016. The growth was majorly driven by professional services, government, banking and telecommunications, while manufacturing continues to witness growth for the straight third quarter. Blade and rack-optimized servers together accounted for 75.1 percent of the overall x86 server market by revenues during Q4 2017. In the x86 product category, 99.7 percent were Intel-based processors sold in the volume, mid-range, and small server segment.

“Traditional three tier architectures are still at the mainstream of India enterprise infra market. We have seen professional services, and telcos as early adopters and innovators towards adoption of virtualization and using HCI approach for their DC strategy. New age workloads such as IoT, big data analytics, and AI are still at a nascent stage and requires significant efforts from vendors and OEM eco-system towards educating the end-users and its business outcomes.,” says Harshal Udatewar, Server Market Analyst, IDC India.

Blade and rack-optimized servers together accounted for 75.1 percent of the overall x86 server market by revenues during Q4 2017. In the x86 product category, 99.7 percent were Intel-based processors sold in the volume, mid-range and small server segment, as per IDC research.

VENDOR PLAY

HPE took the pole position, followed by Dell and Cisco. For HPE what worked to its favor is the ability to manage its server portfolio across domains and specific offering for Cloud and IoT did the trick, The company also offered – Density optimized servers, Mission critical servers, HPE Synergy and HPE SimpliVity. A look at FY 18 reveals that HPE closed the year with 30% revenue market share.

For Dell, it positioned its server offering oriented to managing complex workloads and demands for the digital age. It pitched on its PowerEdge servers and delivered the message that it can maximize operational effectiveness and optimize flexibility at any scale. Focused on accelerated performance, enhanced automation and simplified management, the PowerEdge line-up of servers can help you experience worry-free computing through greater IT efficiency, superior IT agility and better IT reliability.

Cisco meanwhile aimed at building on the architectural foundations, partnerships and rapid customer adoption of Cisco UCS to offer a more effective operating model for the data center. Sources say that ready to power customers’ digital transformation with its highest performing servers ever. Built on the new Intel Xeon Scalable processors, UCS M5 servers are ready to take on even more workloads, with up to double the memory capacity of previous systems. Cisco lab testing reveals that UCS M5 servers deliver up to 86% higher performance over the previous generation of UCS, delivering a significant step forward for data-intensive workloads such as real-time analytics and in-memory computing.

Cisco says that generic servers run generic businesses but digital transformation demands more: it requires critical applications to be delivered with industry-leading performance, availability, and security. Cisco created a computing architecture designed for IT innovation and business acceleration. Cisco UCS isn’t just a server, it’s a radically simplified solution for advanced application performance, increased operational velocity, and superior economics.

Meanwhile, IBM, which is now into the RISC - nonX86 server category, took onto a workload based server approach and its Power as well mainframes saw good mandates over the year. IBM offers a full range of server architectures, configuration options, operating systems, and databases to meet every business need. IBM servers deliver superb performance and high availability can be deployed in private or hybrid cloud environments, and are designed with a focus on security.

OUTLOOK

According to IDC, in its Q1, 2018 server tracker said that “ The economic scenario in India looks promising with private sector investments helping growth despite the slowdown effect earlier. The IT Server spend is expected to grow throughout 2018 through the Government’s effort to ramp up the work in smart cities and other digital India initiatives.”

“From a technology standpoint, AI, IoT, the blockchain, cloud, and analytics are becoming the new focus areas for the end-users as a result creating demand for high core and memory-based processors for robust compute platforms. Manufacturing customers are expected to infuse their investments across ERM, SCM, automation-based solutions towards accelerating operational processes and improving productivity, whereas telcos spending would be focussed towards network modernization and new-age network technology developments fuelling the growth of India server market in coming quarters.”