Indian SME Server Market Sees 12% Growth YoY

The India SME server market is presently experiencing a healthy growth rate of 12 percent. Small and medium businesses (SMBs, companies with fewer than 999 employees) play a significant role in driving the all-India server demand. The current India SMB server market amounts to approximately $300M and is expected to grow to over $500 million by 2017. These are some of the key highlights of AMI’s soon to be published “2013 India SMB Server and Storage Study”.

India SMBs operating in the manufacturing and IT/ITeS space continue to be on the watch list of major server vendors as they are expected to fuel the demand for servers. Verticals such as manufacturing are striving for automation and to increase productivity across the entire value chain. Applications such as CRM and ERP are also being adopted by India SMBs. In the face of the global slowdown, the focus is now increasingly on optimum resource utilisation. Consequently, the need for automation and productivity enhancements has boosted SMB’s IT needs.

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Within India SMBs, the technology adoption pattern is diverse. “Smaller SMBs are generally laggards in terms of technology adoption. They are in the process of setting up their IT infrastructure and are still dependent on basic IT components. They utilise servers for basic tasks such as file/print sharing and email. On the other hand, larger SMBs are early technology adopters. They have their basic IT infrastructure in place and are moving or have already moved to a higher IT platform. These organisations are now in the consolidation mode. They utilise servers for advanced line of business applications such as CRM, ERP and analytics. Furthermore, these businesses have gradually started adopting virtualisation,” says Pratik Gupta, Associate at AMI-Partners India.

Relatively small India SMBs often do not have a formal IT team in place. Many of their IT purchases and decisions are ad-hoc in nature. For information pertaining to IT and the eventual purchase, these SMBs rely heavily on peer group discussions and online searches. With the advent of social media, there is a vast amount of information available online through a host of interactive platforms such as blogs and review platforms. However, the role of channel partners, who act as the last mile in the distribution chain, has not experienced a decline. Even today, they play a crucial role in the decision making process of smaller India SMBs. The relationship between SMB customers and channel partners is not merely transactional. These channel partners act as an important source of information SMBs – right from pricing related information to offering suggestions on which brands to shortlist and buy. “In fact, channel partners are aggressively looking at becoming solution providers for India SMBs rather than mere box pushers. There is a significant level of collaboration between channel partners and SMBs in the management of IT infrastructure and decision making,” added Gupta.

Vendors are focusing on ensuring partner efficiency through regular partner programs. Continuous training and certification programs are being actively used by vendors to ensure partner efficiency and capability. The focus is on training the partners for basic box servers as well as high-end servers and emerging technologies such as cloud computing and virtualisation. These programs are aimed at both the partners’ technical and the sales teams. Now, the focus for vendors is clearly on engaging with the end-customers in a more collaborative manner.