Servers and Workstations - Net Impact

The domestic servers market exhibited healthy growth over the

previous year, both in terms of units and value. Among the main drivers for

growth were the huge demand for mail servers, database servers and web servers.

While mail servers were mostly on the Windows NT platform, their demand was

across the breadth of corporate India. As the corporate segment embraced email

either through dial-up or leased lines, the need to manage messaging became a

critical network issue. Also, as corporate India went online, virus attacks and

security features on the server became more and more critical.

The server market, and the PC servers market in particular,

witnessed a decline in prices and this helped penetrate market segments for

applications like datawarehousing, front-office management and customer

relationship management. A better understanding of the cost of ownership of

servers brought the concept of server consolidation into focus. This meant that

enterprises with networks consisting of a large number of distributed severs,

could now be consolidated across a single centralized server. This helped drive

shipments of Unix servers into networks requiring server consolidation due to

unplanned growth of the network and increasing database and application sizes.

One of the main application drivers in the previous years, ERP, continued to

drive the sale of servers this year too, but to a reduced extent. Most of the

large ERP implementations this year were from projects initiated during the

previous years.

Server And Workstation Market Segmentation
	Units	1999-00 Value (Rs lakh)	ASV (Rs lakh)	Units	Units Value (Rs lakh)	ASV (Rs lakh)	Unit Growth %	Value Growth %	Change in ASV %
Unix Servers
Large	4	3,001	750	7	4,525	646	-43	-34	16
Medium	635	28,370	45	338	16,039	48	88	77	-6
Small	2,618	30,810	12	1,792	26,842	15	46	15	-21
Total	3,257	62,181	19	2,137	47,406	22	52	31	-14
Intel servers
PC servers	26,623	40,101	2	20,685	47,846	2	29	-16	-35
Workstations
Personal workstations	3,500	5,836	2	2,403	4,710	2	46	24	-15
Traditional Workstations	2,029	13,603	7	1,346	11,454	9	51	19	-21
Total	5,529	19,439	4	3,749	16,164	4	47	20	-19

A significant development in 1999-2000 was the release of

three-tier client server applications like mySAP.com. Prior to this, software

vendors had attempted web enabling their applications, but because of the

large client footprint this had not been successful across the internet and

most of the networks. The release of three-tier client server applications

meant that applications could be run from servers with only a small front-end

signature being downloaded across a network or the internet. Eastern Software

Systems released the three-tier version of its ERP and the concept of ‘apps

on tap’ was there to stay in the domestic industry. Applications on hire

introduced the concept of server farms, and while the corporate segment did

not take to the idea, server farms are definitely likely to drive server

shipments in the near future.

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Top Traditional Workstation Vendors
	Unit	Value (Rs. lakh)
SGI	449	5,103
Hewlett-Packard	590	3,500
Sun	450	2,100
Compaq	330	1,900
IBM	210	1,000

With private banks taking remote banking very seriously,

large investments were made for web, security and payment servers.

Applications deployed on servers included ecom services, internet banking, ATM

networking and online transaction services. With the number of Indian web

sites growing exponentially from a few hundred in the beginning of the year to

80,000 at the end, the need for content severs was another driver for server

shipments.

Top Personal Workstation Vendors
	Unit	Value  (Rs. lakh)
Hewlett-Packard	1,050	1,750
IBM	622	933
Compaq	1,200	1,850
SGI	193	778
IBM	210	1,000
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Top Unix Server Vendors
	Unit	Value  (Rs. lakh)
Hewlett-Packard	1,126	18,010
Sun	1,134	17,920
IBM	363	13,740
Compaq	500	9,900
SGI	134	2,610

Among the Unix vendors, Hewlett-Packard, with its HP9000

class of servers, was the top vendor. Amongst its major orders was shipment to

Bharat Petroleum for managing the latter’s SAP application, to BPL for its ISP infrastructure, and to ICICI Bank for its

datawarehousing and data retrieval facilities. Sun was the number two vendor

with its dotcom advertisement blitzkrieg and continued to remain strong in the

public, education and government market sectors. IBM also clinched multi-crore

deals with its AS400 and RS6000 range of servers including Telco, Tisco,

Kirloskar and UTI Bank. A prestigious order received by SGI for its Origin

servers was from DoT for the National Internet Backbone-I.

Looking at the operating systems shipped with Intel

servers, Windows NT emerged as the leading product, accounting for more than

90% of PC server shipments in 1999-2000. The balance shipments appeared to

have been shared among Novell Netware, SCO Unix and Linux.

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Top

PC Server Vendors

Rank Brands Units Value (Rs

lakh) 1 Compaq 7,082 12,000 2 HCL 4,700 9,050 3 IBM 4,648 7,800 4 Hewlett-Packard 1,700 3,000 5 CMS 3,498 1,938 6 Minicomp 1,740 1,700 7 Zenith 1,631 1,562 8 Siemens Nixdorf 500 1,440 9 Acer 500 900 10 DCM 236 300

The workstation market space, similar to the server space,

witnessed healthy unit and value growth. In the Unix workstation space, SGI

remained the top vendor with its range of O2, Octane and Onyx products. The

main market segments that SGI shipped to were manufacturing, entertainment and

internet start-ups and included clients like ONGC, Center for Medium Range

Weather Forecasting, NDTV, Jain Studios, Motorola, Escorts, Discrete Logic, among others. In the personal

workstation market space, Compaq was the top vendor followed by HP and IBM.

SGI also entered the space with its 320, 330, 540 and 550 classes of

workstations.

In the months ahead, competition in the server market space is likely to

get further intensified with the release of 64-bit Intel processors and the

relentless upswing of the Linux open source movement. Adding further fuel to

the fire is the expected release of the 64-bit version of SCO Unix from IBM

and SCO and the excellent scalability of Windows 2x enterprise edition. The

server market is in for a major sea-change.