As the action moves to the cloud, server sales take a hit
The sale of the server has seen a declining trend for the first time since IT boom. With the advent of cloud and its benefits, the IT service companies are renting out space in the cloud to host software instead of setting up their own infrastructure.
The server sales in India has shrunk by 8.1% that is $276.6 million (Rs 1,925 crore) in the third quarter of the year 2018as per IDC technology research weekly.
As per the IDC, the declining trend is due to lack of multi-million-dollar deals from IT, ITeS and telecom deals during the quarter. The manufacturing and banking sectors are experiencing slow down as there have been limited new deals and decidedlyfewer updates.
Primarily, IT firms have been the main buyers of servers. The servers are used for hosting applications that are built and to test for global clients. In most of the cases, they maintain the programs for their clients. In recent times, a shift towards renting software on the cloud by customers has seen a reduction in investment in servers.
The trade analysts quote there are instances wherein organizations are not renewing the server deals as they have ample empty storage area due to movement of applications to the cloud. As per CEO of Greyhound Research SanchitVirGogia, the server market is still huge but witnessing expansion slowly. Most of the hardware setups have turned five years now and are up for renewal. The clients are not renewing the contracts as a large portion of programs have been moved to the cloud. Due to migration to cloud, the companies have enough space in server infrastructure for their current needs. This is the reason for the reduction of renewals for server solution providers as per CEO SanchitVirGogia.
The hardware firms who manufacture and sell servers quote the declining trend is one of the times. The reducing demand from IT services firms in witnessed during the third quarter of 2018. The overall economy is expected to see an upward swing.
The Manish Gupta, general manager of Infrastructure Solutions Group at Dell EMC, India said “"We believe that the Q3 market decrease is not indicative of the bigger trend that has demonstrated increased spending server infrastructure throughout the last few quarters,"