In this segment lay the bloodbath of the year. As top vendors of printers lowered prices regularly to ward off the competition, the industry saw a sharp rise in numbers. No one, however, seemed to be keeping tabs on bottomlines, sparking off the inevitable—volumes scaled up, revenues crashed. While the segment witnessed a growth of 9.5% in unit terms, in terms of value, the growth actually slipped from last year’s Rs 820 crore to Rs 750.7 crore. This was mainly because of the reduction in price points of inkjets, which induced low-key buying in other printer categories. Impact printers actually showed negative growth! Inevitably, Hewlett Packard remained the market leader in this category.

With the overall printer market closely tied up with the PC industry, vendors were taking the bundling route like never before. Samsung dominated the monitor arena, commanding the maximum share. The biggest driver for growth can be attributed to the spurt in multimedia-related activities. Seagate remained the undisputed leader in hard disk space, commanding a market share of around 70%. As for compact disk drives, they have really moved towards becoming a default choice for PC users. This is a major shift from the device being seen as a costly accessory barely a couple of years ago. In the last fiscal, on an average, an estimated 72,000 CD drives rolled out.

Servers and workstations

Unprecedented server sales catapulted the erstwhile low-lying segment to a star-performer status. And what a performance. A growth of 76% in value terms, compared to a mere 7% in the previous fiscal. In terms of units too, it was a heady elixir—63%, compared to 31% in 1999-00. In the first half of the year, ISPs and dot-coms generated most of the server demand, though the industry also saw heavy sales to financial institutions, the fast-mushrooming insurance companies and the government sector.

This was also reflected in IT spending by the public sector and government, which saw an increase from last year’s 30.7% to 34% in 2000-01. For instance, insurance major New India Assurance automated over 600 branches—a straight demand for over 600 Intel servers—in just nine months! Core banking remained the top application where the servers were implemented with some of the names on the core banking binge being HSBC, ICICI Bank, HDFC Bank, Bank of Rajasthan and UTI Bank. Post-half year and still clueless about a viable business model, the demand for Internet infrastructure sank. As things stand now, demand is not expected to rise in the coming months as most existing players have already built up capacity substantially.

The major beneficiary in the high-end RISC server space was Sun, which notched up seven of the ten-odd deals. Compaq did an excellent job in the PC server market with over orders exceeding Rs 250 crore. Hewlett Packard held second spot in the Unix server space, with sales of around Rs 240 crore.

Services

Network integrators continued to lead the growth chart as they handled big orders from banks, financial institutions and corporates. Internet data centers and CRM led the path, ushering in new business opportunities. Network integration evolved from being a product-margins earning industry to one concentrating on value-adds in terms of network design, planning, consultancy and other related services. Systems integrators too made serious bids to incorporate high-end technologies like Java and do other value-adds in their offerings. Enterprises, especially in the financial and banking segments are keen on moving up the technology ladder. Among large network integrators, Wipro Infotech with over 200 projects, emerged at the top with sales revenue of Rs 270 crore.

A number of non-IT majors entered the industry with a range of IT services on offer. At the other end of the spectrum, several state governments came up with IT-friendly policies—most of them planning to increase the role of IT in their own functions, thereby accelerating the growth in services. With disinvestment in the offing, many public sector undertakings also provided abundant opportunities for IT companies. These trends are likely to continue.