Although the server market has dipped, especially in the second half of 2008, the government and education sectors have emerged as a strong opportunity pocket in 2008.
The government and education sectors control over a fifth of total server spending, according to a new server report by AMI-Partners.
"This proportion has every possibility to increase in 2009 as the government is showing keen interest in strengthening its defense mechanism in light of terror threats. There has been lot of e-governance-related activities happening in various cities, and government contributions to the server market were significant, especially in cities like Hyderabad, Delhi, Chennai, and among tier-II cities like Chandigarh, Jaipur and Cochin," said Partha Sarathi Sengupta, Manager, Strategic Market Analysis, AMI.
According to the study, the current situation has led companies to re-evaluate their budgets and review criticality and timelines of IT projects. "Businesses in recent years have been buying only the IT infrastructure they need, and they don't have unused IT infrastructure equipment sitting around," added Sengupta.
Enterprise software implementation dropped in the second half of 2008 and this has affected server traction. The UNIX market has remained healthy, controlling nearly 40 percent of the revenue share, whereas x86 growth declined in the second half of 2008.
IBM maintained the lead in the overall server market with 38 percent market share, closely followed by HP. However, Dell has performed well in the western and eastern regions of the country.
On the other side, IBM lost market share to Dell in the last half of 2008 in x86 space. Dell PowerEdge 2900 & 2950 are competing with IBM3400 & HP ML350 in the entry-level bracket.
Adding more to it, Lenovo's entry in the server market may lead IBM to discontinue manufacturing of its entry-level X-series servers and directly compete with Lenovo.
Blade server is making strong inroads in the traditional tower and rack market. SMBs would open up a huge opportunity for blade servers. They are buying rack-mount, blade server and storage arrays all in the same chassis.
Delhi, Mumbai, Bangalore, Chennai & Pune have already a substantial market share of blade servers. IBM has a better hold in the blade space.
