Asia server market up in spite of global downturn

The APAC server market enjoyed significant growth. While Compaq, HP and IBM retain the lead at the top three spots, other server makers are catching up fast.

Singapore — The Asia Pacific (APAC) server market enjoyed significant growth during the final quarter of 2000 when compared to previous quarters, according to preliminary estimates by Gartner’s Dataquest.

Compaq, HP and IBM retain their top three positions from an overall unit server perspective. The gap however, as highlighted in the appended tables, is narrowing with Dell steaming up the rankings ladder with a 7% increase in unit shipments over the corresponding Q4-99.

Based on preliminary results, server unit shipments within the APAC region are expected to show in excess of 30% year‑on‑year unit growth in the fourth quarter of 2000, when compared with the corresponding fourth quarter of 1999. It is interesting to note that this growth was achieved steadily throughout the year 2000 in Asia Pacific, with quarter-on-quarter (Q4-2000 V Q3-2000) growth at a much lower 6.55%.

The Intel Architecture (IA) server market experienced year-on-year growth (Q4-1999 V Q4-2000) of around 37% in Asia Pacific, whilst the RISC based server market experienced unit growth of just 6%.

Whilst the major growth, from a unit perspective, came from the Chinese and Korean markets, initial estimates indicate that the major regional centres of Asia Pacific like Singapore and Hong Kong, also enjoyed growth from a year-on-year on perspective.

Singapore showed healthy growth of 23% during Q4-00 in server shipments over the last quarter of 1999 and 17% over third quarter 2000. The Intel based server market was the fastest growing with year-on-year growth increase of 29%, while the RISC based server market slid by 5%. HP, Compaq and IBM were the top three server vendors with close to two-thirds of the market.

This disparity between Intel and RISC based server growth in Asia Pacific is indicative of a boom in low-end IA based servers (particularly in developing geographies such as China) and lower growth, from a unit perspective within the RISC market.

Significant input to this impressive year on year unit growth rate has been derived from the indigenous Chinese IA based server manufactures such as Legend, Lang Chao, Founder and Great Wall who between them accounted for over 16% of the regions entire IA unit shipments.

China as a whole has experienced unit shipment growth of over 70%, with total IA units increasing from 36,000 in Q3 1999 to 63,000 in Q4 2000. Couple this with large growth in the Korean IA Server market and a significant proportion of the entire growth in unit shipments during Q4-2000 was derived from these two markets.

Gartner’s Dataquest regional Server Program Manager, Matthew Boon commented, “All in all, the quarter past and the year in general has been good for the regional server vendors, particularly from the high-volume Intel based server vendors.”

This growth trend is expected to continue with Asia Pacific, especially when other emerging markets, such as India, begin to take a foothold in the IA market.

“The Asia Pacific IT Market and Server markets particularly are well positioned to benefit from the continuing infrastructure investments planned by not only major Asia Pacific corporations, but also from the growing SME business market”, added Boon. “With SME’s accounting for almost 95% of all Asia Pacific operations, the potential of server market here, in particular the IA based server, remains huge.”

Another key Asia Pacific Server market, Australia is expected to show fairly flat growth from Q4-1999 to Q4-2000 with factors such as the Olympic games and exchange rate issues biting hard during quarter four.

“Couple these factors with earlier post Y2K jitters and the overhaul of the local tax system (via the introduction of the GST),” concluded Boon, “the Australian server and IT hardware vendors in general have had a year that they will certainly be glad to forget. In fact, they are looking forward to a semblance of business normality.”

Table 1
Tope Asia Pacific Server vendor market shares for 4Q00 versus Q3-00

Vendor Market Share (Q4-00) Market Share (Q3-00) % of Growth (Q4-99 to Q4-00)
Compaq Computer 19% 20% 2%
IBM 18% 19% 1%
Hewlett- Packard 17% 16% 7%
Dell Computer 9% 8% 18%
Legend 7% 5% 25%
LangChao Electronics 5% 5% 22%
Acer 5% 5% 3%
Sun 4% 4% 3%

Source: Gartner Dataquest (Jan 2001)

These results are preliminary at this time. Final statistics will be available soon to clients of Gartner Dataquest's Servers Quarterly Statistics program. These programs offer a comprehensive, global market information service that analyzes and documents the server and workstation industries.

Read more about Servers R Us.