Sizzling PH server growth fuelled by enterprise sales in Q1

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The Philippines server market grew 8.7 percent and 8.2 percent year-on-year in terms of unit shipment and revenue respectively in Q1 2013.

According to research firm IDC, though unit shipment declined 11.3 percent quarterly to a total of 3,665 units, the market achieved second highest revenue in the past two years to a value of $23.9 million in Q1 2013 after Q3 2012.

High-end and volume systems were the major streams driving the server market growth. The growth of high-end servers was driven by organic growth from the banking sector, which was enhancing technology infrastructures to meet rising customer banking needs.

IDC further observed that the number of Linux deployments on x86 servers are increasing, with interest predominately from gaming companies, hosting service providers, and telcos.

According to Cynthia Ho, market analyst for enterprise hardware server research at IDC Asia-Pacific, the rise of smartphone adoption and mobile applications are driving more Linux workloads in the Philippines.

Despite the ongoing fragility of western economies, IDC noticed local spending remains a key driver of the server market growth.

Ho added, ”Global companies have yet recovered from budget constraints. We expect spending on technology refresh, business analytics and server virtualization by domestic companies to be the primary catalyst for the Philippines server market.”

Verticals including government, professional services, manufacturing, telco, and banking are the main sectors spending on servers in the Philippines.

Government spending has gradually been realized since the first quarter of 2013, prior to the presidential election.

Professional services inclusive of business process outsourcing (BPO) companies are looking into business analytics applications, as virtual desktop infrastructure (VDI) deployment and automation software are expected to be key spending areas in the Philippines.

Meanwhile, the banking sector continues to increase the number of bank branches and develop mobile commerce services, triggering demand for better IT infrastructures.

Telco players are enhancing network infrastructures and looking into business analytic applications in order to enhance end users experiences.

Ho added, ”IDC sees the rise of smartphone adoption and mobile application and expects the trend towards BYOD to accelerate in the coming future. Service providers are looking to enhance security within the infrastructures, thus fueling the server market growth.”

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