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
3SERVER MARKET - INDIA.PPT
•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
4SERVER MARKET - INDIA.PPT
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
5SERVER MARKET - INDIA.PPT
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
6SERVER MARKET - INDIA.PPT
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
7SERVER MARKET - INDIA.PPT
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
8SERVER MARKET - INDIA.PPT
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
9SERVER MARKET - INDIA.PPT
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
10SERVER MARKET - INDIA.PPT
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
11SERVER MARKET - INDIA.PPT
•xxx •yyy
Source: x
SAMPLE SWOT Analysis – xxx Servers
• A
• B
• C
• D
• E
Strength
• A
• B
• C
Weakness
12SERVER MARKET - INDIA.PPT
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
13SERVER MARKET - INDIA.PPT
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
14SERVER MARKET - INDIA.PPT
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
15SERVER MARKET - INDIA.PPT
• 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
16SERVER MARKET - INDIA.PPT
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
17SERVER MARKET - INDIA.PPT
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
18SERVER MARKET - INDIA.PPT
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
19SERVER MARKET - INDIA.PPT
… 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
20SERVER MARKET - INDIA.PPT
�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
21SERVER MARKET - INDIA.PPT
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
22SERVER MARKET - INDIA.PPT
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)
23SERVER MARKET - INDIA.PPT
• 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
24SERVER MARKET - INDIA.PPT
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
25SERVER MARKET - INDIA.PPT
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
26SERVER MARKET - INDIA.PPT
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
SAMPLE Private: Domestic Company – xxx. (2/3)
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
27SERVER MARKET - INDIA.PPT
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
SAMPLE Private: Domestic Company – xxx. (3/3)
Business Highlights
Description News
Overview • xxx
28SERVER MARKET - INDIA.PPT
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
29SERVER MARKET - INDIA.PPT
Source: xxx
SAMPLE Strategic Recommendations
xxx
Push xxx sales Gear up for xxx service
30SERVER MARKET - INDIA.PPT
• 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)}
31SERVER MARKET - INDIA.PPT
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]
32SERVER MARKET - INDIA.PPT
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