Computer server sales growth signal recovery, says Gartner

Computer server sales growth signal recovery, says Gartner

Mumbai: Computer server sales in India in the three months ended 30 June increased by 7% over the preceding quarter, driven by the telecom, bank and government sectors, Gartner Inc. said on Thursday.

The growth “can be interpreted as early signs of initial recovery in the hardware market", said Naveen Mishra, senior research analyst at the technology research firm. “We believe the bottoming out has happened and the initial bounce back is on track, with similar momentum expected in the next quarter as well."

Between January and March, server sales declined 13% over the preceding quarter, before recovering to a 7.3% growth in the next quarter. However, at $141.5 million (around Rs685 crore), server sales in the second quarter were down 32% from the year-ago period.

In a boost to server sales, the information technology (IT) services and manufacturing sectors, too, show signs of demand and further movement in these is expected in the coming quarters, Gartner said.

The sequential growth was driven by traditional leaders in the Indian server market—International Business Machines Corp. (IBM), Dell Inc. and Hewlett-Packard Co.

The growth came despite higher prices for x86 servers—the most sold variety in India—following the introduction of feature-rich computers based on Intel Corp.’s Nehalem processors in late 2008.

“Over the last couple of months, we have seen the market levelling out and are expecting to see increased spend towards the end of the year," Shailesh Agarwal, vice-president, sales programmes, systems and technology group, IBM India and South Asia, said by email. “We have seen growth from sectors like telecom, BFSI (banking, financial services and insurance), public sector and government verticals, among others."

The Asia-Pacific server market grew 4.3% in the second quarter over the preceding three months, driven by government spending in Australia.

However, server shipments in Asia Pacific fell 17.2% year-on-year in the second quarter to 323,388 units. Server sales for the vendors in the second quarter reached $1.71 billion, down 15%.

Server sales in Hong Kong fell by 48% over a year ago, in Singapore by 37% and in Taiwan by 34%. But except for Singapore, the other countries saw marginal growth over the previous quarter, Gartner said.