Server Market Gets Innovative

According to an IDC report, the overall revenue of the server market touched
$727 million in 2007 recording a 24 percent increase over 2006. A recent joint
study conducted by IDC and AMI Partners reflected that there are 1.9 million
SMBs and 30,000 mid-market entities in India. Also, as per analyst estimates,
SMBs in India will spend up to $8 billion to beef up IT infrastructure, to a
robust 24 percent from last year.

The changing trends

Emerging market trends and the surging need for energy efficient data
centers and virtualization are the prime factors that have been propelling the
server industry in the country. The increasing number of servers accelerates the
heat generation and thereby raises the issue of cost efficiency. India being a
growing economy, a lot of pro­gress is happening here in the areas of building
infras­tructure, government initiatives and retail revolution. All the growth
factors clubbed with the necessity to build up an energy efficient and cost
saving IT implementation is driving the server industry on a large scale.

Vendors are making all efforts to harness maximum profitability out of the
emerging trends and are coming up with servers that yield better performance and
are easy to manage.

Speaking on the availability of energy efficient servers, Mukul Mathur,
Director-Channels and Marketing, IBM India/South Asia said, “With our System x
and System p servers, we can help cut costs, increase performance and help
control power usage. And, by consolidating and virtualizing on IBM System x and
BladeCenter servers, customers can increase the utilization of their hardware
and decrease the number of physical assets they need to watch over. This
translates into real savings through better energy conser­vation and IT resource
usage across the data center.”

Non-traditional vertical

Telecom, BFSI and manu­fac­turing have been the traditional drivers of
servers in Indian market. However, the year 2007 saw retail and construction as
the emerging verticals. In addition to that vendors are observing growth in the
adoption of server technology in government, media and enter­tainment
industries. Specific industry segments including education, retail and banking
are witnessing a constant demand for servers that undertake specific
applications for print, e-mail, etc that ensure that a downtime in one doesn't
affect entire system.

Vendors are observing growth in the adoption of server technology in government, media and enter­tainment industries

“Even the government sector is now posing as a major contributor for the
server market in the country. With the increasing number of schools,
computerization happening at different scales and e-gov projects coming up at
large scale, the entire server sector is seeing a boost. IT and ITeS are another
sector that contribute to the growth of server industry. The next huge demand is
coming from construction and real estate business,” commented Ashish of Sun
Microsystems.

Virtualization ahead

The reasons blade servers are doing better business in the market is because
they perform their better than the traditional servers and it optimizes space
utilization for data centers, besides being energy efficient. With power cooling
becoming the most talked about technology, blade servers have been able to
create a better market in the server segment. Virtualization still comprises a
small marketshare but the server players agree that this is the next big thing
happening in the server domain. Virtualized servers have the capacity to
increase utiliza­tion of a server by 20 to 25 percent and observing the
non-utilization of energy by tradi­tional servers and increa­sing computing
across all the verticals, they promise profitable business.

Commenting on the adoption rate of virtualized server, George Paul, EVP-Marketing,
HCL Infosystems said that it was slow till key OS vendors announced
virtualiza­tion support as a standard feature, this has led to the increa­sed
propagation of virtualization to a larger segment of the market. Indian players
under­stand the efficiency that virtualization can bring to their organizations
and the adoption rate signifies the maturity level at customer's end.

The main factors that drive the virtualization segment is the infrastructure
flexibility and lower costs. It enables the organizations to run multiple
applications and workloads on single systems safely-radically increasing
efficiency and utilization rates while lowering overall costs.

Pallavi Kathuria, Director-Server Business Group, Microsoft India shared that
in near future, virtualization to a great extent will depend upon the
application scenarios that will dominate the market. “A key factor to determine
the market scenario in the next few years will be application dependency that is
to establish the various application environments suitable for virtualization.
This will further pave the way for software vendors to decipher and develop
virtua­lization solutions that enable and support these scenarios. This is the
only way virtualization can impact the business of its customers from a short
term and large term perspective. Additio­nally, good technical support is a
crucial aspect for all enterprises driving virtualization techno­logies,” she
added.

Emerging technologies

Different vendors are taking different initiatives to establish a front role
in the server industry. IBM is finding increased acceptance in its recently
launched z10 Mainframes in India. On the other hand power efficiency, and green
are the new mantras across ICT infrastruc­ture. HCL is meeting the demand in the
space with new age computing solutions across its range of products.

“RoHS compliance has become a mandatory com­pliance standard for all IT
equipments. HCL has led this shift by becoming one of the first in the industry
to have their entire range of desktops and laptops to be RoHS compliant,” said
Paul.

Also, Linux in the server market has been more widely adopted with a greater
chunk of solution vendors going for the platform to deploy business critical
solutions.

Challenges at SMB front

With the increasing adoption of ERP and other business applica­tions, SMBs
have emerged as the key focus area for the server domain. However, in the SMB
environment, complexity of IT is a matter of concern, and procuring, deploying,
managing and cost implications prevent enterprises to deliberate on decisions.
Managing energy in the data center is a growing concern across companies of all
sizes in India. “SMB is a major market but it has its own limitations. Lack of
quality manpower in SMB space to manage the IT infrastructure is an issue and
therefore, the vendors have to simplify IT to an extent that it is managed
easily by the available resources,” said Pallab Talukar, Director-Enterprise
Solutions Group, Dell India.

SMBs today are looking for customized solutions and products that cater to
their unique IT requirements. This has led to an increase in the IT spending
among SMB com­panies. Kathuria from Microsoft said that keeping their
requirements in mind, Microsoft is looking forward to announce the launch of
Small Business Server 2008 and Essential Business Server 2008 later this year,
which have been specifically designed for SMB customers with built-in
virtualization capabilities.

Vendors need to focus on continuous learning and training programs for their
partners to enable them to provide the desired consultancy to the business
organizations.

Amrita Tejasvi

amritat@cybermedia.co.in