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IDC India pegs the overall India server market at over $800 million in FY2011, of which the non-x86 Unix server market is expected to contribute over $250 million. In terms of absolute revenue growth, the market is said to have to grown by 9.1 percent during 2010, and is projected to grow at 10 percent during the current fiscal.
“The slowdown in 2008 and 2009 saw the server market revenue dip by as much as 28 percent during 2009. In 2008-09 the server market didn’t do well and declined by $100 million, so the performance in 2010 has brought the market to the 2008 level. 2011 will see normal growth but not as much as in 2010,” says Leo Joseph, Vice President, Systems-x, STG, IBM India/SA.
Numbers apart, several trends have emerged over the past two years in the Indian server market. Here are some of them.
Virtualization
Almost everyone agrees that virtualization has been the key driver of growth in the server market. “Server virtualization has become one of the biggest trends this year. Enterprises see the benefits of virtualization: increased utilization of resources; reduced space, power and cooling; reduced TCO; increased ROI for servers; improved IT agility; and reduced provisioning time,” explains Mehul Doshi, Head, Enterprise Server Business, Fujitsu India.
However, since the primary reason for enterprises to opt for virtualization has been that they will need to invest in fewer servers, vendors confirm that it’s affecting absolute numbers though it has increased the sales of high-end servers. Joseph explains the paradox: “Virtualization does affect the unit-wise sales of servers, but from a revenue perspective it helps in the sales of higher-configuration, higher-capability servers, so the effect gets squared off. Thus, instead of selling a large number of small-capacity servers, we end up selling high-end servers.”
This has prompted IDC to forecast revenue growth from high-end (priced in excess of $5,000) blade and rack servers to be around 60 percent for the year.
“With the advent of server consolidation, customers have started opting for high-end servers. Over the past year Dell has seen blade server revenue double. We have seen similar growth rates in high-end rack servers,” says Bobby Mon, Head, Enterprise Business, SMB, Dell India.
Desktop virtualization is also driving growth for servers. Since desktop virtualization requires that all data and applications which traditionally reside on desktops be moved to a centralized environment, customers are forced to buy high-end servers.
Micro servers
Last year HP launched the micro server category with pre-bundled Microsoft Windows Small Business Server. Priced at around Rs25,000 on the street, the server ships with an AMD Athlon II processor. At the time of launch HP had said that the idea of launching the server range was to expand the market in the SMB segment and in B- and C-class cities. “Today, small networks use desktops as servers, and the fundamental reason has been price. We have created a value proposition with the micro server,” says Rajesh Dhar, Director, Industry Standard Servers, HP India.
While other vendors did not publicly launch servers in this category, in cases where customers require such servers they were willing to make special offers.
But partners, especially in tier-1 cities, are not too excited about micro servers. “Micro server sales are not picking up because they are considered desktops. People are much inclined toward rack and blade servers,” says Apoorva Shah, CEO, Innova Systems.
By contrast, partners in smaller cities do see value. “The HP Micro Servers are server class. Though the Athlon processor is entry level, the server has features such as ECC memory support and hot pluggable drives. HP is selling the server without OS at less than Rs15,000 which makes it very appropriate when we set up a less-than-10 PC network,” says Vel Mugran KV, CEO of the Madurai-based Techno Systems.
Racks and blades
According to vendors and partners, customers are increasingly interested in buying racks and blades, and are replacing towers with these horizontal form-factors. “Earlier, large enterprises were going in for servers and SMBs were talking about mini and micro servers. But now the SMBs, in their effort to provide better services to their customers, are looking for high-capacity servers. Even a travel agent with 10 seats is going in for rack servers and storage, which means even the smaller SMBs are going in for better and more reliable computing,” observes Doshi.
Partners agree. “Rack servers with the x86 platform are selling the most. We’re seeing demand for two-way rack models more than uniprocessor models,” says VS Varadarajan, Director, Mukesh Infoserve, Chennai. Apart from savings in terms of space, cost factors are also favoring rack models. “Earlier, vendors used to price their rack models at a premium over towers. Today, they are pricing similar configurations of racks and towers at similar rates. In fact, HP offered one or two rack models at prices which were lower than those for tower models with similar configurations.”
With the data center market booming, blade server shipments have also shot up. “Many benefits that blades offer, such as reduced cabling, rapid hardware provisioning and management automation, are also applicable to SMBs and branch offices,” says Rajesh Rege, Senior Vice President, Data Center, Cisco India.
White box servers
Over the past six months, Intel and AMD have tried to reinvigorate the white box server market by introducing several models and new schemes. AMD, along with Asus, has been offering single- and dual-processor motherboard bundles through Rashi.
Intel has introduced new models around the Intel Xeon 1200 series specifically targeted at SMB customers. The company has also launched its next generation Xeon platforms—E3 and E7. The E3 platform allows white box server manufacturers to configure an entry-level tower model for less than Rs30,000. “The Intel server board S1200BT takes advantage of the architecture capabilities of Sandy Bridge. Because of their deployment and configuration flexibility, S1200BT products enable resellers to offer customized solutions for their small business customers at aggressive price-points,” explains R Ravichandran, Director, Sales, Intel South Asia.
Cores
Except for micro server models, the standard entry-level models are all being shipped with quad-cores. “Today, 85 percent of the servers we sell are quad-core, the rest are above-quad-core,” informs Varadarajan. AMD had launched 12-core processors last year, and is expecting to launch 16 cores in September this year. Intel has announced 10 cores, and is lagging behind in the race for cores at the moment.
Partners note that AMD has gained significant ground over the past year or so. “Though we sell only Intel-based models, we believe AMD has made gains in low-end (through micro servers) and high-end models,” says Shah. Partners also see more traction for 4-way and 8-way models largely because of server consolidation and virtualization projects.
Applications
Many organizations are passing through technology refresh phases as new business models are evolving. SMB customers have started implementing ERP solutions, while larger organizations are deploying the next generation of ERP software. “There are applications for automation in the SMB space which are specific to micro verticals such as hospital management. In order to stay ahead of the competition, companies are adopting these new applications and buying servers to run them,” says Mon. Adds Chetan Patel, Director Technical, Ocean Inc, “We see customers with more than 60 users deploying servers for specific applications such as mail and ERP. They have not yet experimented with the cloud or virtualization, and they continue buying more servers.”
RISC for SMBs
HP and IBM have been pushing their own RISC-based architecture for the SMB market. HP, which has been cornered with Oracle discontinuing support for Itanium, has been extra-aggressive with Itanium-based SKUs, forging a strong alliance with Microsoft for the SMB market. Partners have reported special price clearances at less than Rs4 lakh, which corresponds to the price of a high-end x86 server.
IBM has introduced models that start at Rs5 lakh on its new Power 7 microprocessor platform. Says Joseph, “We are seeing customers with less than 100 users buying Power 7 because of the performance and scalability which we offer, and the robustness of the AIX platform.”
Cisco and Oracle
Cisco is the latest server vendor to enter the Indian market, and it is expected to be a game changer in the coming days. The company is clearly focused on the enterprise and data center market, and does not offer products which are based on pedestal and tower models. “According to Gartner’s x86 blade server summary, Cisco (at 9.6 percent) has moved past a close competitor into the No 3 position in worldwide x86 blade servers for Q1CY11 based on shipments. Gartner estimates Cisco’s x86 YOY growth at 433 percent,” says Rege. In India so far Cisco has focused on the larger national systems integrators, with around three partners gaining certification to competently sell the Cisco UCS platform.
Though Sun lost many partners during the turbulent three quarters following its acquisition by Oracle, the news in the market is that Oracle has started talking again to the former partners.
Conclusion
The server landscape in India is going through major changes. While the absolute numbers may not be growing much with server consolidation and the cloud being the top considerations of enterprises, revenue growth is positive because customers are betting on high-end servers. With massive technology adoption by SMB customers, there’s growth coming in from this segment. Customers are also seeing the benefits of buying blade and rack models over tower and pedestal models. Overall, there are plenty of opportunities for the server reseller.
source : crn
“The slowdown in 2008 and 2009 saw the server market revenue dip by as much as 28 percent during 2009. In 2008-09 the server market didn’t do well and declined by $100 million, so the performance in 2010 has brought the market to the 2008 level. 2011 will see normal growth but not as much as in 2010,” says Leo Joseph, Vice President, Systems-x, STG, IBM India/SA.
Numbers apart, several trends have emerged over the past two years in the Indian server market. Here are some of them.
Virtualization
Almost everyone agrees that virtualization has been the key driver of growth in the server market. “Server virtualization has become one of the biggest trends this year. Enterprises see the benefits of virtualization: increased utilization of resources; reduced space, power and cooling; reduced TCO; increased ROI for servers; improved IT agility; and reduced provisioning time,” explains Mehul Doshi, Head, Enterprise Server Business, Fujitsu India.
However, since the primary reason for enterprises to opt for virtualization has been that they will need to invest in fewer servers, vendors confirm that it’s affecting absolute numbers though it has increased the sales of high-end servers. Joseph explains the paradox: “Virtualization does affect the unit-wise sales of servers, but from a revenue perspective it helps in the sales of higher-configuration, higher-capability servers, so the effect gets squared off. Thus, instead of selling a large number of small-capacity servers, we end up selling high-end servers.”
This has prompted IDC to forecast revenue growth from high-end (priced in excess of $5,000) blade and rack servers to be around 60 percent for the year.
“With the advent of server consolidation, customers have started opting for high-end servers. Over the past year Dell has seen blade server revenue double. We have seen similar growth rates in high-end rack servers,” says Bobby Mon, Head, Enterprise Business, SMB, Dell India.
Desktop virtualization is also driving growth for servers. Since desktop virtualization requires that all data and applications which traditionally reside on desktops be moved to a centralized environment, customers are forced to buy high-end servers.
Micro servers
Last year HP launched the micro server category with pre-bundled Microsoft Windows Small Business Server. Priced at around Rs25,000 on the street, the server ships with an AMD Athlon II processor. At the time of launch HP had said that the idea of launching the server range was to expand the market in the SMB segment and in B- and C-class cities. “Today, small networks use desktops as servers, and the fundamental reason has been price. We have created a value proposition with the micro server,” says Rajesh Dhar, Director, Industry Standard Servers, HP India.
While other vendors did not publicly launch servers in this category, in cases where customers require such servers they were willing to make special offers.
But partners, especially in tier-1 cities, are not too excited about micro servers. “Micro server sales are not picking up because they are considered desktops. People are much inclined toward rack and blade servers,” says Apoorva Shah, CEO, Innova Systems.
By contrast, partners in smaller cities do see value. “The HP Micro Servers are server class. Though the Athlon processor is entry level, the server has features such as ECC memory support and hot pluggable drives. HP is selling the server without OS at less than Rs15,000 which makes it very appropriate when we set up a less-than-10 PC network,” says Vel Mugran KV, CEO of the Madurai-based Techno Systems.
Racks and blades
According to vendors and partners, customers are increasingly interested in buying racks and blades, and are replacing towers with these horizontal form-factors. “Earlier, large enterprises were going in for servers and SMBs were talking about mini and micro servers. But now the SMBs, in their effort to provide better services to their customers, are looking for high-capacity servers. Even a travel agent with 10 seats is going in for rack servers and storage, which means even the smaller SMBs are going in for better and more reliable computing,” observes Doshi.
Partners agree. “Rack servers with the x86 platform are selling the most. We’re seeing demand for two-way rack models more than uniprocessor models,” says VS Varadarajan, Director, Mukesh Infoserve, Chennai. Apart from savings in terms of space, cost factors are also favoring rack models. “Earlier, vendors used to price their rack models at a premium over towers. Today, they are pricing similar configurations of racks and towers at similar rates. In fact, HP offered one or two rack models at prices which were lower than those for tower models with similar configurations.”
With the data center market booming, blade server shipments have also shot up. “Many benefits that blades offer, such as reduced cabling, rapid hardware provisioning and management automation, are also applicable to SMBs and branch offices,” says Rajesh Rege, Senior Vice President, Data Center, Cisco India.
White box servers
Over the past six months, Intel and AMD have tried to reinvigorate the white box server market by introducing several models and new schemes. AMD, along with Asus, has been offering single- and dual-processor motherboard bundles through Rashi.
Intel has introduced new models around the Intel Xeon 1200 series specifically targeted at SMB customers. The company has also launched its next generation Xeon platforms—E3 and E7. The E3 platform allows white box server manufacturers to configure an entry-level tower model for less than Rs30,000. “The Intel server board S1200BT takes advantage of the architecture capabilities of Sandy Bridge. Because of their deployment and configuration flexibility, S1200BT products enable resellers to offer customized solutions for their small business customers at aggressive price-points,” explains R Ravichandran, Director, Sales, Intel South Asia.
Cores
Except for micro server models, the standard entry-level models are all being shipped with quad-cores. “Today, 85 percent of the servers we sell are quad-core, the rest are above-quad-core,” informs Varadarajan. AMD had launched 12-core processors last year, and is expecting to launch 16 cores in September this year. Intel has announced 10 cores, and is lagging behind in the race for cores at the moment.
Partners note that AMD has gained significant ground over the past year or so. “Though we sell only Intel-based models, we believe AMD has made gains in low-end (through micro servers) and high-end models,” says Shah. Partners also see more traction for 4-way and 8-way models largely because of server consolidation and virtualization projects.
Applications
Many organizations are passing through technology refresh phases as new business models are evolving. SMB customers have started implementing ERP solutions, while larger organizations are deploying the next generation of ERP software. “There are applications for automation in the SMB space which are specific to micro verticals such as hospital management. In order to stay ahead of the competition, companies are adopting these new applications and buying servers to run them,” says Mon. Adds Chetan Patel, Director Technical, Ocean Inc, “We see customers with more than 60 users deploying servers for specific applications such as mail and ERP. They have not yet experimented with the cloud or virtualization, and they continue buying more servers.”
RISC for SMBs
HP and IBM have been pushing their own RISC-based architecture for the SMB market. HP, which has been cornered with Oracle discontinuing support for Itanium, has been extra-aggressive with Itanium-based SKUs, forging a strong alliance with Microsoft for the SMB market. Partners have reported special price clearances at less than Rs4 lakh, which corresponds to the price of a high-end x86 server.
IBM has introduced models that start at Rs5 lakh on its new Power 7 microprocessor platform. Says Joseph, “We are seeing customers with less than 100 users buying Power 7 because of the performance and scalability which we offer, and the robustness of the AIX platform.”
Cisco and Oracle
Cisco is the latest server vendor to enter the Indian market, and it is expected to be a game changer in the coming days. The company is clearly focused on the enterprise and data center market, and does not offer products which are based on pedestal and tower models. “According to Gartner’s x86 blade server summary, Cisco (at 9.6 percent) has moved past a close competitor into the No 3 position in worldwide x86 blade servers for Q1CY11 based on shipments. Gartner estimates Cisco’s x86 YOY growth at 433 percent,” says Rege. In India so far Cisco has focused on the larger national systems integrators, with around three partners gaining certification to competently sell the Cisco UCS platform.
Though Sun lost many partners during the turbulent three quarters following its acquisition by Oracle, the news in the market is that Oracle has started talking again to the former partners.
Conclusion
The server landscape in India is going through major changes. While the absolute numbers may not be growing much with server consolidation and the cloud being the top considerations of enterprises, revenue growth is positive because customers are betting on high-end servers. With massive technology adoption by SMB customers, there’s growth coming in from this segment. Customers are also seeing the benefits of buying blade and rack models over tower and pedestal models. Overall, there are plenty of opportunities for the server reseller.
source : crn
