Market Research Report : Server Market in India 2012


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Server market in India is currently undergoing through a phase wherein the market can be characterized with steady growth and a cut-throat competition among players operating in the market space. Prime factors influencing growth in the market happen to be the increase in the number of data transactions across major industry verticals such as BFSI, manufacturing, retail and IT/ITeS among others. The huge presence of SMBs (Small and Medium Business) on a pan India basis further drives the market by leaps and bounds. A majority of SMBs are investing significantly in order to revamp their IT infrastructure, which in turn is providing server vendors with a fertile market place.
The market can be segregated according to various aspects such as the form factor, CPU type and price band. As of now, servers can be availed on the basis of its form factor, pricing and CPU type. Growing demand for higher computing power to facilitate faster and real-time data transaction catalyze growth in the market by manifolds.

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Market Research Report : Server Market in India 2012

  1. 1. Server Market – IndiaMarch 2012
  2. 2. Executive Summary The overall server spending in India stood at INR xx bn in 20-- and is expected to attain a CAGR of 10.6% to reach INR yy bn by 20-- SMB server spending in India hovered at INR xx bn in 20-- and is expected to grow at a CAGR of 16.3% to reach INR yy bn by 20-- Market A rapid growth in the amount of data transaction by virtue of business growth across key industry verticals is mainly driving the market by manifolds Currently, competition in the market can be characterized with stiff competition amongst players, wherein constant product innovation and changes has become a mandate for vendors in order to survive competition Tremendous advancement in the field of technology ahs primarily resulted in the emergence of state-of-the-art Server technologies which has brought about paradigm changes in the server market Some of the advanced technologies which are currently experiencing fast adoption comprise of the following:Technology xyz abc Trends identified in the market comprise of the following: Growing popularity of cloud and virtual servers Trends Incorporation of ARM based servers Shift towards green servers Key Server Vendors IBM India HP IndiaCompetition AMD India Acer India VMWare India Dell India SERVER MARKET - INDIA.PPT 2
  3. 3. •Introduction•Server Market Overview SMB Overview Import and Export Highlights•Server Technology•Government Regulations•Market Influencers•Market Opportunity•Purchase Criteria•Market Trends•Major Server Player Profiles•Key Channel Partners by Metros and Non- Metros•Strategic Recommendation•Appendix SERVER MARKET - INDIA.PPT 3
  4. 4. Introduction - An Ideal Server SAMPLE An Ideal Server – Typical Characteristics Performance: Reliable uptime, ability to operate 24*7, speed of processor, adequate memory capacity, energy efficiency Scalability: Affordable parts, minimum upgradation cycle of 6-7 years Route to Market: Channel partners for entry level servers, direct for mid and high end level servers Support & Service: Prompt response, online support, resolution within 24 hours of token being booked, single point of contact and remote manageability for mid and high end servers Operating System: Windows happens to be more user friendly, Linux requires advanced skill set for operations Features: High-end security features, sufficient storage capacity and auto back up features Price: Discounts and affordable upgradesSource: x SERVER MARKET - INDIA.PPT 4
  5. 5. Exponential growth in the number of data transactions is primarily driving the server market in India India Server Market - Overview • Skyrocketing trade activities globally coupled with demand for increased computing power is primarily driving the demand for servers in the Indian market SAMPLE Enterprises and firms are gradually shifting towards the usage of real-time based data transmission which further accelerates the demand for high end servers in the market Massive presence of businesses pertaining industry verticals such as manufacturing, BFSI, IT/ITeS and the government sector also fuel growth in server adoption • Currently, the market is flooded with established foreign vendors who have managed to garner a strong foothold in the market Technological advancements and stiff competition has forced players to surface with newer and better products which in turn further inject development in the market Server Shipments – India Server Spending – India Units ‘000 INR bn a xyz a abc b b c c d 0 0 2010 2011 2012e 2013e 2014e 2015e 2010 2011 2012e 2013e 2014e 2015eSource: x SERVER MARKET - INDIA.PPT 5
  6. 6. Market Segmentation – Various Categories (1/x) SAMPLE Server Market – Vendor Share (2011) Server Market – Price Range (2011) a A C 12% 3% 22% b B 36% 15% c 43% d e 35% 34% • Currently, the market is mainly dominated by established foreign vendors wherein they experience cut-throat competition • Constant product innovation and technological changes in products and service offered are the key strategies followed by vendors to survive the intense competition in the market • As of now, a and b enjoy the lions share in the market with c and d following closely behind • The servers available in the market can be segregated according to their price bands Xyz Abc • XXXSource: x SERVER MARKET - INDIA.PPT 6
  7. 7. Market Segmentation – Various Categories (2/x) SAMPLE Server Market – CPU Type (2011) Server Market – Form Factor (2011) a b abc 21% def 38% 43% ghi 62% 36% • Xyz • Abc • Zzz • AaaSource: x SERVER MARKET - INDIA.PPT 7
  8. 8. India SMB Server Market – Vendor Strategies & SMB Preferences Vendor Strategy SAMPLE • Considering the massive presence of xxx and the prevailing xxx in the market, an efficient strategy capable enough to garner a better customer base has become very crucial for vendors • xxx SMB Purchase Preference • Purchase preference of xxx usually depend on the type of business they conduct, wherein they shy away from xxx and hence tend to xxx in the market • xxxSource: x SERVER MARKET - INDIA.PPT 8
  9. 9. Import and Export – India Server Market SAMPLE •The Indian server market has been quite active in terms of export over the past four years •Below mentioned are the details of the EXIM trade carried so far: Total Import – India Server Market Total Export – India Server Market INR bn INR bn a a xxx b b yyy c c d e d f 0 0 2008-09 2009-10 2010-11 2008-09 2009-10 2010-11 * Figures for the year 2011-12 are taken for the period Apr – Jun INR xxx bn, whereas total export hovered at INR yyy bn during the same periodSource: x SERVER MARKET - INDIA.PPT 9
  10. 10. India Server Market (Import) – Top 5 Countries 2008-2009 SAMPLE 2009-2010 11.2% 8.6% 5.8% 11.3% 34.9% 39.1% 14.7% a e a e 15.6% b b c c 31.9% 26.9% d d 2010-2011 2011-2012 7.0% 7.6% 7.7% 7.8% 11.5% 40.9% a e 11.7% a b 49.4% b c c d 23.5% d 32.9% eSource: x SERVER MARKET - INDIA.PPT 10
  11. 11. Cutting edge server technologies help in enhanced and effective management of IT operations xxx Servers SAMPLEyyy Servers •xxx •yyySource: x SERVER MARKET - INDIA.PPT 11
  12. 12. SWOT Analysis – xxx Servers SAMPLE Strength Weakness •A •A •B •B •C •C •D •E SWOT Threat Opportunity •A •A •B •B •C •C •DSource: x SERVER MARKET - INDIA.PPT 12
  13. 13. Case Study – Cloud Servers Client Organization Industry SAMPLE Server Vendor xxx Education xxx Case: Cloud platform used for the launch of distribution of online digital content Requirements Solution Benefit • A solution under the name • Owing to massive amounts of • Improved administrative ‘CertiTrac’ was developed digital data to be distributed process • The company selected amongst students, a unified • On-time delivery of digital Microsoft Azure platform cloud based platform was contents • Microsoft Azure includes cloud required, so as to facilitate • High security service supporting operating quicker and easier process • Any time availability system and SQL Azure Solution Used xxx ServersSource: x SERVER MARKET - INDIA.PPT 13
  14. 14. Eyeing the national security & integrity concerns, the government has put forward certain norms for the market Government Regulations – India Server Market SAMPLE •Off late, the incidents of data breaches and the use of telecommunication technology to support terrorist activities in India has increased at an alarming rate Eyeing the seriousness of the scenario, the Government of India (GoI) has brought forward concrete norms for enterprises regarding server hosting •Below listed is the description and other details pertaining to the norms set forward by GoI • xxx • Canada based, xxx • It is also expected to that xxxSource: x SERVER MARKET - INDIA.PPT 14
  15. 15. Drivers and Challenges SAMPLE Drivers Challenges • The server market faces some minute hindrances • Primarily, the exponential rise in the usage of which hamper the growth in the market computing across the globe is propelling the server • Some of the factors can be summarized as below: market in India tremendously xxx • By virtue of increased xxx has also increased - xxx may attract costs up to INR xxx mn per dramatically hour xxx yyy: Running and operating a server incurs a xxx • xxx - Servers require xxx • The steady growth in nations economy has also - On an average companies shell out about INR played a major role xxx xxx mn for xxx for three years xxx - For a period of xxx years, a cost of around INR xxx mn is requiredSource: x SERVER MARKET - INDIA.PPT 15
  16. 16. Server Market – Industry Outlook Vertical xxx xxx xxx SAMPLE xxx xxx xxx Adoption is Description High growth IT adoption is Adoption is Rapid growth Growth is at directly owing to directly gradual and Growth and IT seen and nascent stage proportional external norms proportional to investment investments open to IT & adoption is to the and growing business depends on investments gradual maturity of business growth profitability business Regulations and Process Business Client needs Influence of yy Influence of zz Drivers numerous automation and operations and yyy and zz and xxx compliances yyy such as yyy Server Usage XX XX XX XX XX XXSource: x SERVER MARKET - INDIA.PPT 16
  17. 17. Scope in India – Market Segments India Server Market Segments – Business Type SAMPLE 16% a c b 45% 39% India Server Market Segments - Region Region 1 24% 35% Region 2 Region 3 Region 4 8% 34% India Server Market Segments – Industry Type Top 40 Cities A E 4% No. of 24% B F 2% SMBs Prominent Verticals 21% 3% C G aaa Xxx Xxc 19% D Xxx Abc bbb 27% ccc Xxx Xyc ddd xxx cvbSource: x SERVER MARKET - INDIA.PPT 17
  18. 18. Top 40 Cities Vendor Opportunity (2011) – Servers (1/x) Sl. No City Prominent Verticals SAMPLE No. of SMBs Server Shipment 1 A Manufacturing, BFSI, Professional Services, Retail, Hospitality, IT/ITES, Real Estate … … 2 B Manufacturing, BFSI, Construction & Real Estate, Healthcare, Retail, IT/ITES 3 C Manufacturing, BFSI, Real Estate, Retail, Healthcare, IT/ITES 4 D IT/ITES, Manufacturing, BFSI, Real Estate, Retail, Hospitality, Education 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20Source: x SERVER MARKET - INDIA.PPT 18
  19. 19. Server Purchase Criteria xxx SAMPLExxx A crucial criteria for server purchase happens to be … Based on the budget and requirement, the … xxx xxx Servers procured for supporting crucial functionalities A careful estimation of the number of … should use … xxx xxx … of the prospective server is another major issue If the server is procured to function as a cluster node which needs to be verified prior to purchase, wherein or a virtualization host server then the … the server must be … xxx xxx The … of the server is another important aspect which Servers procured for the purpose of a virtualization needs to be considered before buying. Adequate … host, … xxx xxx Servers equipped with xxx technologies such as ‘xxx’ Prior to server purchase, a compatibility check of all should be selected so as to reap maximum benefits existing xxx is a mandate for the companySource: x SERVER MARKET - INDIA.PPT 19
  20. 20. Sluggish global economy has resulted in companies to shift focus towards cost saving server hosting technologies Growing popularity of cloud and virtual servers •With the global economy dipping down recently, companies and organizations across the globe are experiencing a strong urgency to curtail costs and survive the crisis with maximum profitability xxx •To avert IT costs, advanced technology oriented cloud servers and virtual servers SAMPLE are fast gaining popularity amongst organizations •Shifting to either of these technologies brings forth numerous benefits such as reduced expenditure on IT infrastructure maintenance, diminished need for IT staff and personnel Apart from general cost savings, companies get a clear opportunity to focus more on their core business and enhance their productivity by a large extent Some Eminent Cloud and Virtual Server Adopting Companies Sl. No. Company name Technology selected 1 K Raheja Group Xxx 2 Fidelity Business Services Xxx 3 Infotech Enterprises Xxx 4 Infosys Yyy 5 The Essar Group Yyy 6 Aditi Technologies yyySource: x SERVER MARKET - INDIA.PPT 20
  21. 21. Major Public Companies - Summary Net Profit/Loss 3,000 Size of the Bubble represents Market Capitalization in INR bn 2,500 2,000 1,500 SAMPLE 1,000 500 0 xxx yyy -500-1,000 -4,000 -2,000 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 22,000 24,000 26,000 Total income xxx yyySource: x Note: All figures are in INR mn and are based on the latest financials available SERVER MARKET - INDIA.PPT 21
  22. 22. Public: Domestic Company – xxx. (1/3) Company Information SAMPLE Offices and Centres – India Corporate Address Tel No. Noida Fax No. Website Year of Incorporation Ticker Symbol Stock Exchange Products and Services Head Office Category Products/Services Key People xxx Servers Name Designation Server SolutionsSource: x SERVER MARKET - INDIA.PPT 22
  23. 23. Public: Domestic Company – xxx. (2/3) Financial Snapshot SAMPLE Key Ratios y-o-y change Total Income Particulars 2011 2010 2009 2008 (2011-10) INR bn Net Profit / Loss INR bn Profitability Ratios a 4 Operating Margin -0.76 2.13% 2.89% 3.42% 3.76% 3 Net Margin -0.54 1.46% 2.00% 1.96% 2.47% b 2 Profit Before Tax Margin -0.87 2.00% 2.86% 2.86% 3.53% c Return on Equity -4.01 8.80% 12.81% 21.39% 30.24% 1 Return on Capital Employed -4.91 9.71% 14.62% 31.25% 45.82% 0 0 Return on Working Capital -3.70 7.89% 11.59% 20.81% 36.18% 2008 2009 2010 2011 Return on Assets -1.35 3.58% 4.94% 7.14% 9.89% Financial Summary Return on Fixed Assets -32.13 56.83% 88.97% 132.15% 187.21% Cost Ratios • The company incurred a net profit of INR xx bn in FY 2011, as Operating costs (% of Sales) 0.76 97.86% 97.10% 96.57% 96.24% compared to net profit of INR xx bn in FY 2010 Administration costs (% of 1.47 7.00% 5.53% 4.83% 4.49% • The company reported total Income of INR xx bn in FY 2011, Sales) registering a decrease of xx per cent over FY 2010 Interest costs (% of Sales) 0.37 0.70% 0.33% 0.36% 0.39% Liquidity Ratios • The company earned an operating margin of 2.13 per cent in FY Current Ratio 8.12% 1.98 1.83 1.57 1.41 2011 a decrease of 0.76 percentage points over FY 2010 Cash Ratio 26.98% 0.17 0.14 0.25 0.27 • The company reported debt to equity ratio of 1.46 in FY 2011, a Leverage Ratios decrease of 8.66 per cent over FY 2010 Debt to Equity Ratio -8.66% 1.46 1.59 2.00 2.06 Financial Summary Debt to Capital Ratio 27.95% 0.24 0.19 0.17 0.26 Interest Coverage Ratio -65.48% 3.08 8.92 9.40 9.68Indicators Value (--/--/2012) Efficiency Ratios Fixed Asset Turnover -12.75% 38.59 44.23 67.48 75.76 Market Capitalization (INR) 10,195.0 Asset Turnover -0.88% 2.43 2.45 3.64 4.00 Total Enterprise Value (INR) 10,544.2 Current Asset Turnover 1.37% 2.65 2.61 3.86 4.24 EPS (INR) 5.08 Working Capital Turnover -7.04% 5.36 5.76 10.63 14.64 PE Ratio (Absolute) 8.84 Capital Employed Turnover -6.15% 5.98 6.37 10.92 12.24Source: x Improved Decline SERVER MARKET - INDIA.PPT 23
  24. 24. Public: Domestic Company – HCL Infosystems Ltd. (3/3) Key Business Segments SAMPLE Key Geographic Segments a b c a b c d 73% 72% 70% 55% 68% 56% 54% 54% 27% 26% 28% 29% 31% 29% 28% 0% 0% 1% 1% 30% 13% 16% 16% 15% 5% 2008 2009 2010 2011 2008 2009 2010 2011 Key Recent Developments Description News Overview • xxx xxx • abcSource: x SERVER MARKET - INDIA.PPT 24
  25. 25. Major Private Companies - Summary Net Profit/Loss 7,000,000 Size of the Bubble represents Total Assets in INR mn 3,500,000 0 SAMPLE -3,500,000 -10,000,000 0 10,000,000 20,000,000 30,000,000 40,000,000 Total Income aaa bbb ccc ddd eee fff ggg hhh iii jjj kkkSource: x Note: All figures are in INR mn and are based on the latest financials available SERVER MARKET - INDIA.PPT 25
  26. 26. Private: Domestic Company – xxx. (1/3) Company Information SAMPLE Offices and Centres – India Corporate Address Tel No. Fax No. Website Year of Incorporation Head Office Products and Services Bangalore Category Products/Services Key People Name DesignationSource: x Note: The list of products and services is not exhaustive SERVER MARKET - INDIA.PPT 26
  27. 27. Private: Domestic Company – xxx. (2/3) Financial Snapshot SAMPLE Key Ratios y-o-y change Total Income Net Profit/Loss Particulars 2011 2010 2009 2008 (2011-10) INR mn INR mn Profitability Ratios Operating Margin 0.18 99.25% 99.07% 98.59% N.A. x 250 Net Margin 0.24 1.12% 0.88% 1.36% N.A. y 200 Profit Before Tax Margin 0.00 100.00% 100.00% 100.00% N.A. Return on Equity 2.60 22.54% 19.94% 27.13% N.A. 150 z Return on Capital Employed -112.82 -505.90% -393.08% -774.87% N.A. 100 Return on Working Capital 2.48 23.88% 21.40% 28.76% N.A. a 50 Return on Assets 2.60 22.54% 19.94% 27.13% N.A. Return on Fixed Assets 403.91 2642.46% 2238.55% 1649.57% N.A. 0 0 Cost Ratios 2009 2010 2011 Operating costs (% of Sales) N.A. N.A. N.A. N.A. N.A. Administration costs (% of N.A. N.A. N.A. N.A. N.A. Sales) Financial Summary Interest costs (% of Sales) N.A. N.A. N.A. N.A. N.A. • The company incurred a net profit of INR xxx mn in FY 2011, as Liquidity Ratios compared to net profit of INR xxx mn in FY 2010 Current Ratio 4.53% 1.19 1.14 1.27 1.16 Cash Ratio -36.37% 0.04 0.06 0.06 0.08 • The company reported total income of INR xxx mn in FY 2011, Leverage Ratios as compared to INR xxx mn in FY 2010 Debt to Equity Ratio N.A. N.A. N.A. N.A. N.A. • The company earned an operating margin of 99.25 per cent in Debt to Capital Ratio N.A. N.A. N.A. N.A. N.A. FY 2011 an increase of 0.18 percentage points over FY 2010 Interest Coverage Ratio N.A. N.A. N.A. N.A. N.A. Efficiency Ratios Fixed Asset Turnover -6.92% 2351.87 2526.67 1200.18 N.A. Asset Turnover -10.88% 20.06 22.51 19.74 N.A. Current Asset Turnover 15.50% 3.39 2.94 4.40 N.A. Working Capital Turnover -12.01% 21.25 24.15 20.93 N.A. Capital Employed Turnover -10.88% 20.06 22.51 19.74 N.A.Source: x Improved Decline SERVER MARKET - INDIA.PPT 27
  28. 28. Private: Domestic Company – xxx. (3/3) Business Highlights SAMPLE Description News Overview • xxx xxx xxxSource: x SERVER MARKET - INDIA.PPT 28
  29. 29. Channel Partners by Metros and Non-Metros (1/xx) SAMPLE Server Channel Partners – Metro Cities City Channel Partner Name Correspondence AddressSource: xxx SERVER MARKET - INDIA.PPT 29
  30. 30. Strategic Recommendations SAMPLE xxx Push xxx sales Gear up for xxx service • xxx • xxxSource: Netscribes Analysis SERVER MARKET - INDIA.PPT 30
  31. 31. Appendix SAMPLERatio Calculations Ratio Calculations (Operating Current Assets / CurrentOperating Margin Current Ratio Income/Revenues)*100 LiabilitiesNet Margin (Net Profit / Revenues) *100 {(Cash & Bank Balance + Cash Ratio Marketable Securities) / Current (Income Before Tax / Revenues Liabilities)}Profit Before Tax Margin *100 Total Liabilities / Shareholders Debt to Equity (Net Income / Shareholders EquityReturn on Equity (ROE) Equity)*100 {Total Debt / (Shareholders Debt to Capital Ratio EBIT / (Total Assets – Current Equity + Total Debt)}Return on Capital (ROCE) Liabilities)*100 Interest Coverage Ratio EBIT / Interest Expense (Net Income / Working Capital)Return on Working Capital *100 Fixed Asset Turnover Sales / Fixed AssetsReturn on Assets (Net Income / Total Assets)*100 Asset Turnover Sales / Total AssetsReturn on Fixed Assets (Net Income / Fixed Assets) *100 (Operating Expenses / Sales) Current Asset Turnover Sales / Current AssetsOperating Costs (% of Sales) *100Administration Costs (% of (Administrative Expenses / Sales) Working Capital Turnover Sales / Working CapitalSales) *100Interest Costs (% of Sales) (Interest Expenses / Sales) *100 Capital Employed Turnover Sales / Shareholders Equity SERVER MARKET - INDIA.PPT 31
  32. 32. Thank you for the attentionThe Server Market in India report is a part of Netscribes’ Information Technology Series. Formore detailed information or customized research requirements please contact:Kalyan BangaE-Mail: sales@netscribes.comNetscribes (India) Pvt. Ltd. is dedicated to disseminating information and providing quick insights on “hot” industries in India and otheremerging markets. Track our new releases and major updates in these industries onAbout NetscribesNetscribes is a knowledge-consulting and solutions firm with clientele across the globe. The company’s expertise spans areas of investment & business research, business &corporate intelligence, content-management services, and knowledge-software services. At its core lies a true value proposition that draws upon a vast knowledge base.Netscribes is a one-stop shop designed to fulfil clients’ profitability and growth objectives.Disclaimer: This report is published for general information only. Although high standards have been used the preparation, Netscribes (India) Pvt. Ltd. or “Netscribes” isnot responsible for any loss or damage arising from use of this document. This document is the sole property of Netscribes (India) Pvt. Ltd. and prior permission is requiredfor guidelines on reproduction. SERVER MARKET - INDIA.PPT 32