Market Research Report : Server Market in India 2012

Server Market – India
March 2012

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 India
Competition AMD India Acer India
VMWare India Dell India

SERVER MARKET - INDIA.PPT 2

•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

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 upgrades

Source: x


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 2015e
Source: x


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
• XXX

Source: x


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
• Aaa

Source: x


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
• xxx

Source: x


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
period

Source: x


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% e

Source: x


Cutting edge server technologies help in enhanced and
effective management of IT operations
xxx Servers
SAMPLEyyy Servers

•xxx •yyy

Source: x


SWOT Analysis – xxx Servers
SAMPLE
Strength Weakness
•A •A
•B •B
•C •C
•D
•E

SWOT

Threat Opportunity
•A •A
•B •B
•C •C
•D

Source: x


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 Servers

Source: x


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 xxx

Source: x


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 required

Source: x


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 XX

Source: x


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 cvb

Source: x


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
20
Source: x


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 company

Source: x


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 yyy
Source: x


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 yyy

Source: x Note: All figures are in INR mn and are based on the latest financials available


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 Solutions

Source: x


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 9.68

Indicators 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 12.24

Source: x Improved Decline


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 • abc

Source: x


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 kkk

Source: x Note: All figures are in INR mn and are based on the latest financials available


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 Designation

Source: x Note: The list of products and services is not exhaustive


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


Business Highlights
SAMPLE
Description News

Overview • xxx

xxx xxx

Source: x


Channel Partners by Metros and Non-Metros (1/xx)
SAMPLE
Server Channel Partners – Metro Cities
City Channel Partner Name Correspondence Address

Source: xxx


Strategic Recommendations
SAMPLE
xxx

Push xxx sales Gear up for xxx service

• xxx • xxx

Source: Netscribes Analysis


Appendix
SAMPLE
Ratio Calculations Ratio Calculations
(Operating Current Assets / Current
Operating Margin Current Ratio
Income/Revenues)*100 Liabilities

Net 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 Equity
Return 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 Assets
Return on Assets (Net Income / Total Assets)*100
Asset Turnover Sales / Total Assets
Return on Fixed Assets (Net Income / Fixed Assets) *100

(Operating Expenses / Sales) Current Asset Turnover Sales / Current Assets
Operating Costs (% of Sales)
*100

Administration Costs (% of (Administrative Expenses / Sales) Working Capital Turnover Sales / Working Capital
Sales) *100

Interest Costs (% of Sales) (Interest Expenses / Sales) *100 Capital Employed Turnover Sales / Shareholders Equity


Thank you for the attention
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more detailed information or customized research requirements please contact:

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E-Mail: sales@netscribes.com

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