‘The dot in the dot-com’ strategy paid off handsomely for Sun, with super-growth leading to it being the number one server company in the RISC space, boasting a turnover of over Rs 373 crore. Among the top orders bagged by Sun included financial institutions like HDFC Bank, ABN Amro and Citibank, apart from some others like ITC and Reliance Industries. HP was at No 2, and the key value proposition came from its mid-range server. HP managed huge growth in the ERP segment—primarily SAP as the top application, followed by Oracle. While Sun is the clear leader, HP will have to work hard to cover the over Rs 130-crore difference.

In third slot was Compaq, but thanks to the booming PC server business, it led the overall server segment revenues of Rs 476 crore. The numbers did all the talking here, as Compaq cruised home with over Rs 250 crore of orders in this segment alone. IBM, which had held fort in second spot in last year's rankings, was upstaged by Sun Microsystems, which grabbed the No 2 slot in overall server rankings.

This is on the lines of the US server market, where IBM lost pole position in 2000, according to Gartner Group estimates. Part of the problem for IBM was its re-branding exercise, with the mother brand ‘eServer’ being pitched against earlier brands like S/390, AS/400 and Netfinity.

Sun Microsystems won major accounts not only in the Internet space but also in the traditional brick-and-mortar segment. Globally, though IBM retained the numero uno position in the server space, it had a flat growth rate of less than 1% compared to a super-charged 43% growth rate shown by Sun Microsystems. The same pattern has been repeated in the country. With a growth rate of just 23%, IBM is way behind Compaq and Sun’s triple-digit growth of 117% and 108%, respectively.

Today’s picture

So much for fiscal 2000-01… zooming in on the current fiscal, the dream run seems to be over, and the slowdown is taking over. The market is unlikely to witness growth rates like last year but it is still brimming with opportunity. The big bet is again on the banking, finance and insurance segments.

Vendors are banking on the ‘ripple’ effect with the rationale that if a few players have made heavy investments, other would have to follow suit. Also, with the opening of the insurance segment and MNCs stepping in, they would be investing heavily to catch up on their IT needs. Again, the ‘ripple’ effect, with Indian players not having much choice but to follow suit.

The same is expected in the telecom industry… last year, there were some investments but it is this year that will have vendors witness the cumulative effect of telecom liberalization. With many basic and cellular operators bidding for licenses, it could be a way out of the slowdown for vendors.

Also, the manufacturing sector will see investments in integration of various applications into a common Web-based hub. Like it or not, companies have realized that the Internet is a reality and if they are not in tune with this development, they might well see themselves being left far behind over the next few years. Admittedly, the investments entailed in such integration might not rival that in the last fiscal, but a strong following is likely in the CRM, SCM and ERP segment, which, naturally, will cascade into orders for the server segment.

According to Calendar Q1 server reported by Gartner, "India has emerged as one of the more stable markets in the region—the only country to register growth on a quarterly and yearly basis." Even China, which has a marketshare of over 39%, has shown a quarter-on-quarter decline in server growth rate. The only sweet spot available—India.

The optimism is still there, a feeling that India will continue to buck the slowdown trend and continue to grow from quarter to quarter, even as other countries in the region continue on their negative growth path. Perhaps, then, while might not be looking at a picnic this time around, but the show will go on.