High-end Servers

IBM wins, HP is second and Sun is third. Dell figures in the Club with 11 index points. While Club's composition is exactly in the same order as last year, the share has changed. Sun has lost 30 index points over a year and the battle is between IBM and HP. Loyalty matrix shows fairly even support for both. 84% of HP's customers want to stay put, while the brand is tipped to get over 10% of Sun's share and 8% of Dell's. IBM enjoys 95% customer loyalty, with 14% of HP customers ready to move over. As the second wave of ERP settles down, one of the big drivers for this segment this year has been server consolidation (visible from the list of nominations we got for the Best IT Implementation awards). IBM has been able to successfully ride that bandwagon. With the server consolidation story not yet over, will the other brands also be able to ride the bandwagon needs to be seen. The fact that manufacturing and telecom, two of Sun's core constituencies are more or less through with their current wave of computerization could also account for Sun's lower score. The regional market share is uniform for the two top brands. Sun does well in the South, getting 20% of the share. Only HP does strongly across the industry segments. The choice of servers for the manufacturing industry seems to be of IBM stock followed by HP. In other sectors though, there are other vendors that join the battle. 

BPO/ITES sees Dell cut away 28% of the pie. BFSI, services and media contracts seem to be shared with Sun's way a number of times with HP and IBM. So, who are these people buying the big irons? 23% voters were from the above 1000 Cr Companies and they seem to prefer IBM. 17% of them are from the 100-250 Cr group and they are evenly split between IBM and HP with Sun picking up the rest. While IBM is strong throughout, HP is playing for keeps among the 50-100 crore turnover segment. Last year, we had predicted that there are likely to be changes in the segment, with IBM standing to gain from Sun and Dell. That has partly been borne out, but this year, surprisingly, IBM is gaining from HP too-perhaps explained by the virtualization/consolidation messaging. We had also said that Dell needs to watch out, and that continues. 

Brand Shift (%) 2003

Coming to Sun, this year, those wanting to move away from Sun seem to be more likely to move to HP as compared to last year, when there was an even split between IBM and HP. Sun's gains, meanwhile seem to be coming only from Dell, which should be the cause for some concern. So, even as they scout for new markets, Sun needs to focus on retaining existing customers. In the coming year, with large iron servers becoming cheaper, this market is likely to see sustained growth, but a threat could come if cheaper clustering technology attains maturity and mainstream acceptance. Clustering is currently limited to academics and selected BFSI installations. If that changes, it could make a very big difference to this category as a whole.