market research report : server market in india 2012

Server Market – India

March 2012

Executive Summary

Market

Server

Technology

� Tremendous advancement in the field of technology ahs primarily resulted in the emergence of state-of-the-art

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:

� xyz

� 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--

� 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

2SERVER MARKET - INDIA.PPT

Technology

Trends

Competition

� xyz

� abc

Key Server Vendors

IBM India HP India

AMD India Acer India

VMWare India Dell India

� Trends identified in the market comprise of the following:

� Growing popularity of cloud and virtual servers

� Incorporation of ARM based servers

� Shift towards green servers

•Introduction

•Server Market Overview�SMB Overview

�Import and Export Highlights

•Server Technology

•Government Regulations

•Market Influencers

•Market Opportunity


•Market Opportunity

•Purchase Criteria

•Market Trends

•Major Server Player Profiles

•Key Channel Partners by Metros and Non-Metros

•Strategic Recommendation

•Appendix

SAMPLE Introduction - An Ideal Server

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


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

SAMPLE

India Server Market - Overview

Exponential growth in the number of data transactions is

primarily driving the server market in India

• Skyrocketing trade activities globally coupled with demand for increased computing power is primarily driving the

demand for servers in the Indian market

� 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


Source: x

inject development in the market

Units ‘000

a

b

c

d

0

xyz

2015e2014e2013e2012e20112010

INR bn

a

b

c

0

abc

2015e2014e2013e2012e20112010

Server Shipments – India Server Spending – India

SAMPLE Market Segmentation – Various Categories (1/x)

Server Market – Vendor Share (2011) Server Market – Price Range (2011)

12% 3%

36%

34%

15%

e

b

a

d

c

35%

22%

43%

CA

B


Source: x

• 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

SAMPLE Market Segmentation – Various Categories (2/x)

Server Market – CPU Type (2011) Server Market – Form Factor (2011)

62%

38%

ba21%

43%

36%

ghi

abc

def


Source: x

• Xyz• Abc• Zzz• Aaa

SAMPLE India SMB Server Market – Vendor Strategies & SMB

Preferences

• 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

Vendor Strategy


Source: x

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

SAMPLE Import and Export – India Server Market

•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


2009-10

INR bn

a

b

c

d

0

2008-09

xxx

2010-11 2008-09

INR bn

a

b

c

d

e

f

0

yyy

2010-112009-10

* 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

SAMPLE India Server Market (Import) – Top 5 Countries

2008-2009

5.8%8.6%

14.7%

31.9%

39.1%

e

d

c

b

a

2009-2010

26.9%

11.2%

11.3%

15.6%

34.9%

b

d

c

ea


2010-2011

11.5%

7.7%

32.9%

40.9%

7.0%

ea

c

b

d

2011-2012

7.6%

23.5%

49.4%

7.8%

11.7%

b

a

e

d

c

Source: x

SAMPLE Cutting edge server technologies help in enhanced and

effective management of IT operations

xxx Servers yyy Servers


•xxx •yyy

Source: x

SAMPLE SWOT Analysis – xxx Servers

• A

• B

• C

• D

• E

Strength

• A

• B

• C

Weakness


Source: x

SWOT

• A

• B

• C

• D

Opportunity

• A

• B

• C

Threat

SAMPLE Case Study – Cloud Servers

Case: Cloud platform used for the launch of distribution of online digital content

SolutionRequirements Benefit

Client Organization Server Vendor

xxx xxx

Industry

Education


Source: x

• Owing to massive amounts of

digital data to be distributed

amongst students, a unified

cloud based platform was

required, so as to facilitate

quicker and easier process

• Improved administrative

process

• On-time delivery of digital

contents

• High security

• Any time availability

• A solution under the name

‘CertiTrac’ was developed

• The company selected

Microsoft Azure platform

• Microsoft Azure includes cloud

service supporting operating

system and SQL Azure

Solution Used

xxx Servers

SAMPLE Government Regulations – India Server Market

Eyeing the national security & integrity concerns, the

government has put forward certain norms for the market

•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


Source: x

• xxx

• Canada based, xxx• It is also expected to that xxx

SAMPLE Drivers and Challenges

• Primarily, the exponential rise in the usage of

computing across the globe is propelling the server

market in India tremendously

Drivers

• The server market faces some minute hindrances

which hamper the growth in the market

• Some of the factors can be summarized as below:

� xxx

Challenges


• By virtue of increased xxx has also increased

dramatically

� xxx

• xxx

• The steady growth in nations' economy has also

played a major role xxx

� xxx

- xxx may attract costs up to INR xxx mn per

hour

� yyy: Running and operating a server incurs a xxx

- Servers require xxx

- On an average companies shell out about INR

xxx mn for xxx for three years

- For a period of xxx years, a cost of around INR

xxx mn is required

Source: x

SAMPLE Server Market – Industry Outlook

xxx xxx xxx xxx xxx xxx

Growth and IT

investments

High growth

owing to

external norms

and growing

business

Rapid growth

seen and

open to IT

investments

IT adoption is

directly

proportional to

business

growth

Adoption is

gradual and

investment

depends on

profitability

Growth is at

nascent stage

& adoption is

gradual

Adoption is

directly

proportional

to the

maturity of

business

Drivers

Regulations and

numerous

compliances

Client needs

and yyy

Process

automation and

yyy

Business

operations

such as yyy

Influence of yy

and zz

Influence of zz

and xxx

Description

Vertical


compliancesand yyy

yyy such as yyyand zz and xxx

Server Usage XX XX XX XX XX XX

Source: x

SAMPLE Scope in India – Market Segments

India Server Market Segments – Business Type

45%

16%

39%

a c

b

India Server Market Segments - Region

35%24%

Region 2

Region 1


35%

8% 34%Region 4

Region 3

Region 2

India Server Market Segments – Industry Type

3%

24%4%

19%

2%21%

27%

E

C G

D

B F

A

aaa

bbb

ccc

ddd

Top 40 Cities

No. of

SMBs Prominent Verticals

Xxx Xxc

Xxx Abc

Xxx Xyc

xxx cvb

Source: x

SAMPLE Top 40 Cities Vendor Opportunity (2011) – Servers (1/x)

Sl.

NoCity Prominent Verticals 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


Source: x

9

10

11

12

13

14

15

16

17

18

19

20

SAMPLE Server Purchase Criteria

A crucial criteria for server purchase happens to be …

Servers procured for supporting crucial functionalities

should use …

Based on the budget and requirement, the …

A careful estimation of the number of …

xxx xxx

xxx xxx

xxx xxx


… of the prospective server is another major issue which needs to be verified prior to purchase, wherein the server must be …

Servers equipped with xxx technologies such as ‘xxx’

should be selected so as to reap maximum benefits

The … of the server is another important aspect which

needs to be considered before buying. Adequate …

If the server is procured to function as a cluster node or a virtualization host server then the …

Prior to server purchase, a compatibility check of all

existing xxx is a mandate for the company

Servers procured for the purpose of a virtualization host, …

xxx xxx

xxx xxx

Source: x

SAMPLE

Sluggish global economy has resulted in companies to shift

focus towards cost saving server hosting technologies

•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

•To avert IT costs, advanced technology oriented cloud servers and virtual servers

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

Growing popularity of cloud and virtual servers

xxx


�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

Source: x

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

Major Public Companies - Summary

1,000

1,500

2,000

2,500

3,000

Net Profit/Loss

Size of the Bubble represents Market Capitalization in INR bn

SAMPLE


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

-1,000

-500

0

500

-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

yyyxxx

SAMPLE

SAMPLE Public: Domestic Company – xxx. (1/3)

Company Information Offices and Centres – India

Corporate Address

Tel No.

Fax No.

Website

Year of Incorporation

Ticker Symbol

Noida


Key People

Products and Services

Stock Exchange

Category Products/Services

xxx Servers

Server Solutions

Name Designation

Source: x

Head Office

SAMPLE Key Ratios

Financial Summary

• The company incurred a net profit of INR xx bn in FY 2011, as

Net Profit / Loss

Total Income

INR bn

2

0

4

3

INR bn

1

a

b

c

0

2011201020092008

Particulars y-o-y change

(2011-10)2011 2010 2009 2008

Profitability Ratios

Operating Margin -0.76 2.13% 2.89% 3.42% 3.76%

Net Margin -0.54 1.46% 2.00% 1.96% 2.47%

Profit Before Tax Margin -0.87 2.00% 2.86% 2.86% 3.53%

Return on Equity -4.01 8.80% 12.81% 21.39% 30.24%

Return on Capital Employed -4.91 9.71% 14.62% 31.25% 45.82%

Return on Working Capital -3.70 7.89% 11.59% 20.81% 36.18%

Return on Assets -1.35 3.58% 4.94% 7.14% 9.89%

Return on Fixed Assets -32.13 56.83% 88.97% 132.15% 187.21%

Cost Ratios

Operating costs (% of Sales) 0.76 97.86% 97.10% 96.57% 96.24%

Financial Snapshot

Public: Domestic Company – xxx. (2/3)


• The company incurred a net profit of INR xx bn in FY 2011, as

compared to net profit of INR xx bn in FY 2010

• The company reported total Income of INR xx bn in FY 2011,

registering a decrease of xx per cent over FY 2010

• The company earned an operating margin of 2.13 per cent in FY

2011 a decrease of 0.76 percentage points over FY 2010

• The company reported debt to equity ratio of 1.46 in FY 2011, a

decrease of 8.66 per cent over FY 2010

Financial Summary

Indicators Value (--/--/2012)

Market Capitalization (INR) 10,195.0

Total Enterprise Value (INR) 10,544.2

EPS (INR) 5.08

PE Ratio (Absolute) 8.84

Operating costs (% of Sales) 0.76 97.86% 97.10% 96.57% 96.24%

Administration costs (% of

Sales)1.47 7.00% 5.53% 4.83% 4.49%

Interest costs (% of Sales) 0.37 0.70% 0.33% 0.36% 0.39%

Liquidity Ratios

Current Ratio 8.12% 1.98 1.83 1.57 1.41

Cash Ratio 26.98% 0.17 0.14 0.25 0.27

Leverage Ratios

Debt to Equity Ratio -8.66% 1.46 1.59 2.00 2.06

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

Efficiency Ratios

Fixed Asset Turnover -12.75% 38.59 44.23 67.48 75.76

Asset Turnover -0.88% 2.43 2.45 3.64 4.00

Current Asset Turnover 1.37% 2.65 2.61 3.86 4.24

Working Capital Turnover -7.04% 5.36 5.76 10.63 14.64

Capital Employed Turnover -6.15% 5.98 6.37 10.92 12.24

Improved DeclineSource: x

SAMPLE Key Business Segments Key Geographic Segments

Key Recent Developments

Public: Domestic Company – HCL Infosystems Ltd. (3/3)

70%

2009

0%28%

72%

2008

0%26%

73%

2011

1%31%

68%

2010

1%29%

cba

2010

15%

28%

56%

2009

16%29%

54%

2008

16%30%

54%

2011

5%13%

27%

55%

d

b

c

a


Key Recent Developments

Description News

Overview • xxx

xxx • abc

Source: x

3,500,000

7,000,000

Net Profit/Loss

Major Private Companies - Summary

Size of the Bubble represents Total Assets in INR mn

SAMPLE


Source: x

-3,500,000

0

-10,000,000 0 10,000,000 20,000,000 30,000,000 40,000,000

Total Income

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

aaa

ggg

bbb

hhh

ccc

iii

eee

jjj

ddd fff

kkk

SAMPLE

SAMPLE Private: Domestic Company – xxx. (1/3)

Company Information Offices and Centres – India

Corporate Address

Tel No.

Fax No.

Website

Year of IncorporationHead Office


Key People

Products and Services

Year of Incorporation

Category Products/Services

Name Designation

Note: The list of products and services is not exhaustiveSource: x

Head Office

Bangalore


Financial Snapshot Key Ratios

Particulars y-o-y change

(2011-10)2011 2010 2009 2008

Profitability Ratios

Operating Margin 0.18 99.25% 99.07% 98.59% N.A.

Net Margin 0.24 1.12% 0.88% 1.36% N.A.

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.

Return on Capital Employed -112.82 -505.90% -393.08% -774.87% N.A.

Return on Working Capital 2.48 23.88% 21.40% 28.76% N.A.

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.

Cost Ratios

Operating costs (% of Sales) N.A. N.A. N.A. N.A. N.A.

Net Profit/LossTotal Income

0

50

100

150

200

250

INR mn

x

y

z

a

0

INR mn

201120102009


Financial Summary

• The company incurred a net profit of INR xxx mn in FY 2011, as

compared to net profit of INR xxx mn in FY 2010

• The company reported total income of INR xxx mn in FY 2011,

as compared to INR xxx mn in FY 2010

• The company earned an operating margin of 99.25 per cent in

FY 2011 an increase of 0.18 percentage points over FY 2010

Operating costs (% of Sales) N.A. N.A. N.A. N.A. N.A.

Administration costs (% of

Sales)N.A. N.A. N.A. N.A. N.A.

Interest costs (% of Sales) N.A. N.A. N.A. N.A. N.A.

Liquidity Ratios

Current Ratio 4.53% 1.19 1.14 1.27 1.16

Cash Ratio -36.37% 0.04 0.06 0.06 0.08

Leverage Ratios

Debt to Equity Ratio N.A. N.A. N.A. N.A. N.A.

Debt to Capital Ratio N.A. N.A. N.A. N.A. N.A.

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.

Improved DeclineSource: x


Business Highlights

Description News

Overview • xxx


xxx xxx

Source: x

SAMPLE Channel Partners by Metros and Non-Metros (1/xx)

Server Channel Partners – Metro Cities

City Channel Partner Name Correspondence Address


Source: xxx

SAMPLE Strategic Recommendations

xxx

Push xxx sales Gear up for xxx service


• xxx • xxx

Source: Netscribes Analysis

SAMPLE Appendix

Ratio Calculations

Operating Margin(Operating Income/Revenues)*100

Net Margin (Net Profit / Revenues) *100

Profit Before Tax Margin(Income Before Tax / Revenues *100

Return on Equity (ROE) (Net Income / Shareholders Equity)*100

EBIT / (Total Assets – Current

Ratio Calculations

Current RatioCurrent Assets / Current

Liabilities

Cash Ratio

{(Cash & Bank Balance +

Marketable Securities) / Current

Liabilities)}

Debt to Equity Total Liabilities / Shareholders

Equity

Debt to Capital Ratio{Total Debt / (Shareholders

Equity + Total Debt)}


Return on Capital (ROCE) EBIT / (Total Assets – Current Liabilities)*100

Return on Working Capital(Net Income / Working Capital) *100

Return on Assets (Net Income / Total Assets)*100

Return on Fixed Assets (Net Income / Fixed Assets) *100

Operating Costs (% of Sales)(Operating Expenses / Sales) *100

Administration Costs (% of Sales)

(Administrative Expenses / Sales) *100

Interest Costs (% of Sales) (Interest Expenses / Sales) *100

Equity + Total Debt)}

Interest Coverage Ratio EBIT / Interest Expense

Fixed Asset Turnover Sales / Fixed Assets

Asset Turnover Sales / Total Assets

Current Asset Turnover Sales / Current Assets

Working Capital Turnover Sales / Working Capital

Capital Employed Turnover Sales / Shareholders Equity

Thank you for the attentionThe Server Market in India report is a part of Netscribes’ Information Technology Series. For more detailed information or customized research requirements please contact:

Kalyan BangaE-Mail: [email protected]


About Netscribes

Netscribes 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” is

not 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 required

for guidelines on reproduction.

Netscribes (India) Pvt. Ltd. is dedicated to disseminating information and providing quick insights on “hot” industries in India and other

emerging markets. Track our new releases and major updates in these industries on

market research report : server market in india 2012

Technology

market xxxsource

server market indiamarch

server market price

server market form factor

server adoption

xsampleserver market

server marketsome

smb server spending