Asia/Pacific excluding Japan (APEJ) server market slowed in 2013, according to a newly released report by IDC.
This market recorded an impressive growth in both 2010 and 2011 driven by infrastructure build out by Web 2.0 and cloud service providers in The People's Republic of China (P.R.C)
In 2013, server revenues in APEJ region grew only 1.3% to total US$9,985 million but this market continued to outperform other regional markets on a global basis.
The spending growth took a downturn as the Web 2.0 and public cloud services providers such as Baidu that were driving the demand for servers in the PRC for many years, were not so ambitious about their growth in 2013.
"Strong adoption of server virtualization and cloud technologies in the enterprise segment, rapidly increasing appeal of public cloud providers for specific workloads, and growing interest in Integrated Systems were some of the key technology disruptions that impacted the server spending growth in 2013," said Rajnish Arora, associate vice president of IDC's Asia/Pacific Enterprise Computing Research.
Changing competitive landscape
The server market landscape is very competitive and changes rapidly. IDC's report indicates that the combined revenue share of the top three vendors - HP, IBM and Dell in APEJ steadily declined from 82.4% in 2010 to 70.7% in 2013.
Chinese vendors Inspur and Huawei recorded highest gains while Taiwanese ODMs (Original Direct Manufacturers) accounted for a little more than 2% share of the total server market in revenue terms in 2013.
Inspur took over Oracle to land the number 4 spot in revenue market share and Huawei's growth led to its entry into the list of top 5 vendor rankings in APEJ.
Other reasons for the slow growth of server market cited by Arora are global economic meltdown, political turmoil, and upcoming federal elections in few nations.
"Server spending plunged more than 21% in Australia and New Zealand in 2013 because customers are aggressively adopting cloud and cloud technologies to help build a much more agile and flexible IT infrastructure that is much more responsive, adaptive and predictive to the dynamic needs of the business," added Arora.