SMBs spur growth in server market

Indian small and medium businesses (SMBs, or companies with up to 999
employees) are set to spur more than 20 percent growth in server spending amidst
concern of an overall server market slowdown in 2008. The increase in the number
of units shipped in the SMB segment will primarily be driven by the expansion of
new distributed computing workload deployments. The number of server units
shipped in the India SMB market is set to grow a healthy 15 percent according to
a recent study conducted by New York-based Access Markets International (AMI)
Partners.

“Server technology is constantly evolving to keep pace with ever-changing
business requirements and expansion needs of the SMBs,” said Partha Sarathi
Sengupta, Manager-Strategic Market Analysis, AMI-Partners. “There is hardly any
possibility of spending growth rate to drop significantly in the coming year as
the industry is in the phase of rapid infrastructure upgrades,” he added.

However, there is change in the outlook by this sector. SMBs, and especially
medium businesses (MBs, or companies with 100 to 999 staff) have definitely
moved up the value chain and are now looking at a consolidated approach where
the server should be able to do multi-level complex tasks resulting in higher
optimization of IT investments and lowering total cost of ownership (TCO).

The increase in the number of units shipped in the SMB segment will primarily be driven by the expansion of new distributed computing workload deployments

“Blade servers are making inroads into the traditional rack and tower
servers,” observed Sengupta. “These new-generation servers that consume less
power and occupy less space, are gradually gaining increased acceptance in the
Indian SMB marketplace as customers look to minimize their energy and
operational costs while expanding their IT infrastructure,” he informed.

“The x86 and x86-64 servers are emerging as the ideal server platforms for
Indian SMBs running enterprise applications,” added Sengupta. The trend of
server virtualization is also catching up among the Indian SMBs and the impact
of virtualization is more on x86 servers.

However, there is huge opportunity at the entry-level servers, especially
among small businesses (SBs, or companies with up to 99 staff). Small businesses
even in the upcountry markets are looking for a robust infrastructure for their
business needs and are investing in technology solutions.

A recent AMI study reveals that over 35 percent of PC-owning Indian small
businesses in the 20 to 99-employee segment are planning to purchase servers for
the first time this year. Apart from traditional vertical markets like BFSI,
telecom and manufacturing, businesses in the construction and
media/entertainment verticals will have a significant impact on server market
growth.