The overall server market in India witnessed a year-over-year (YoY) decline of 22.3% in terms of vendor revenue to reach $272.0 million in Q2 2020 (April-June) versus $350.2 million in Q2 2019, according to the latest IDC Worldwide Quarterly Server Tracker , Q2 2020 (September 2020 release).
The x86 server market accounts for 85.6% of overall server market in terms of revenue. The contribution to x86 server market continues to come from the professional services, telecommunications, followed by manufacturing and banking verticals. For the telecommunications vertical, spending was observed from several on-going projects and network expansion projects. For the banking sector, spending from nationalized and private banks were focused on digital transformation, business continuity, and providing robust banking platforms to the customers. Manufacturing spend was largely driven by global players for their research related projects during Q2 2020.
The x86 server market in terms of revenue declined YoY by 26.0% to reach $232.9 million in Q2 2020 from $314.8 million in Q2 2019. This decline was largely due to lower spend of hyperscalers compared to Q2 2019. Also, banks, telecom, and manufacturing verticals witnessed a sharp YoY revenue decline owing to operational constraints and financial challenges posed due to the pandemic. We expect market recovery in second half of CY2020 owing to deal spill-over and order backlogs. In addition, we observe spend coming from in from telecom vendors, banks, federal government agencies, and global hyperscalers to support compute and SaaS requirements of large customers and to support the growing demand for virtual and business continuity solutions.
The non-x86 server market grew YoY by 10.3% to reach $39.1 million revenue, in Q2 2020. IBM continues to dominate the market accounting for 69.1% of revenue share, during Q2 2020 with a revenue of $27.0 million. Hewlett Packard Enterprise (HPE) came at second position followed by Oracle with a revenue share of 25.2% and 5.7% respectively.
In Q2 2020, HPE emerged as the top vendor in the India x86 server market with a revenue share of 30.3% and a revenue of $70.6 million. Key wins for HPE came from telecom vendors, IT and ITeS companies, high-tech semiconductor manufacturing companies, and banking organizations. Dell Technologies came at second spot with a revenue share of 22.9% and a revenue of $53.4 million. Dell Technologies picked up large orders from IT and ITeS customers, manufacturing companies, telecom vendors, and banks. At number three is Cisco with a revenue share of 10.0% and a revenue of $23.2 million. Lenovo came in fourth accounting for a revenue share of 7.2% and a revenue of $16.7 million.
“During 2020Q2, the server market witnessed lack of spend across major verticals, but this was offset by spike in the spend from global public cloud service providers. The trend of enterprises moving towards SaaS based solutions was also observed to ensure business continuity. We expect market to show signs of recovery in the form of on-going projects, tech refresh, and greenfield projects in H2 2020,” says Harshal Udatewar, Market Analyst, Server, IDC India.
IDC India Forecast
India’s economy was ailing well before beginning of pandemic and what lies after COVID-19 is an industry-wide slow down resulting in the contraction of GDP. The lifting of the lockdown in a phase-wise manner did not help in growing the industrial output of the manufacturing sector, which negatively impacted the small and medium businesses causing the outlook to be pessimistic for the rest of 2020. Spending from large enterprises and big conglomerates is expected to offset the decline which otherwise would have caused havoc in the country. From an enterprise spending point of view, we anticipate investments to emerge from public and private nationalized banks to continue supporting users with their robust banking platform and delivering efficient customer experience through multiple digital touch points. Telecommunications vertical looks positive in terms of spend towards on-going projects, greenfield projects related to network modernization, and value-added services (VAS). At present, India x86 server market is expected to witness a YoY decline in value by 13%, during the period 2019-2020, according to the latest IDC Worldwide Quarterly Server Forecast, Q2 2020, (September 2020 Release).
