Bangalore, July 03: India Inc has cut down spending on computer servers drastically. The cut is so steep that investments in the first quarter of 2009 have come down to Q2, 2006 levels, sounding off alarm bells for overall IT spends. And analysts warn the trend could continue.
India’s overall server market in Q1 declined 29.6% year-on-year to $154 million, the same figure as in Q2 of 2006. This is the second consecutive quarter of revenue declines, latest available data from industry tracker IDC India Ltd show.
Technology research firm Gartner India has also estimated a steep fall in Q1 server sales to $130 million from $150 million in Q4, 2008.
In absolute numbers too, server sales fell drastically in Q1 compared with the same quarter last year. x86 server shipments have contracted 26% to just 25,156 units, IDC numbers made available to DNA show.
The Indian server market is estimated variedly between $750 million and $800 million depending up on who you speak to. Servers based on the x86 architecture constitute the biggest chunk of the market with a share upwards of 50%.
“Market conditions worsened during Q1 as most enterprises either postponed or downsized their new strategic IT projects and ongoing infrastructure-refresh initiatives,” said IDC analyst Amit Dalal.
IT refresh in subsequent quarters too could be minimal, he said, adding large customers have cut down spending drastically. Thus Q2 would be flat, with sales in the same range as Q1.
The fall in Q1 comes on top of the 28% contraction in the December quarter when the slowdown in the wake of the Lehman Brothers’ debacle hit global IT spending.
–Agencies–