Green Energy-saving and Virtualization Technologies Are in Full Demand
BEIJING, Feb. 5 /PRNewswire-Asia/ -- CCID Consulting, China’s leading research, consulting and IT outsourcing service provider, and the first Chinese consulting firm listed in Hong Kong (Hong Kong Stock Exchange: HK08235), recently released its article on China’s x86 server market.
In 2008, major events followed one after another. From the snow disaster in the beginning of the year to the devastating Wenchuan Earthquake and from the successful staging of the Olympic Games to the global economic storm at the end of the year, every one of the events led to market changes. However, it was still green energy-saving and virtualization applications that defined the market throughout the year. With the faster integration of server and data centers, energy consumption and server use factors became the focus of attention for enterprises. Many market activities centered on this theme. The global economic storm was another point of attention in the industry. For the time being, China’s x86 server market was not notably affected. As 2009 industry investment budgets are finalized at the start of this year, the market suffered slightly from the financial crisis. CCID Consulting’s data show that China’s x86 server market slowed down in 2008, reaching a size of 12.383 billion Yuan, up by 11.7% over 2007. In 2008 Q1-Q3, 486,300 x86 servers were sold, generating 8.855 billion Yuan in sales revenue, up by 15.0% and 11.4% year-over-year, respectively.
Fig. 1 Changes in Size of China’s x86 Server Market, Jan.-Sep., 2006-2008
http://www.ccidconsulting.com/upload/14093.jpg
Source: CCID Consulting, December 2008
Overall characteristics of the market in 2008 are as follows:
Green Energy-saving and Virtualization Applications Gathered Pace
Green energy-saving is the theme of the server industry. In 2008, there was no doubt that virtualization technology was popular too. The values brought by green energy-saving and virtualization technologies are accepted by more and more industry users. This also accelerated the renewal and upgrading of green energy-saving products and virtualization applications. Meanwhile, it also pushed up sales of high-end servers, resulting in a rise in the growth of sales revenues while the server sales volume growth slowed down in 2008.
Small- and Medium-sized Enterprise (SME) Market Competition Intensified
With the relative saturation of the medium- and large-sized enterprise market, SMEs are becoming the main battlefield of competition for server vendors. In particular, foreign vendors such as IBM, HP and Dell have targeted SMEs as their main customers. In 2008, they successively introduced products and solutions for SME users to meet their business needs in terms of low cost and ease of use and management. Meanwhile, under the great offensives from international brands, competitions in the SME market became fiercer.
Vendors Greatly Expanded in Tier-3 and -4 Markets
In 2008, Tier-3 and -4 cities, and even Tier-5 and -6 cities, became the key markets for vendors to develop. Numerous vendors stepped up their efforts to cover regional markets, especially Tier-3 and -4 cities, and provided greater support for end channels. The recruitment of core dealers also became the focus of building Tier-3 and -4 channels. Various vendors staged their recruitment activities. Meanwhile, price competition and product segmentation were also the important bargaining chips for competition in the Tier-3 and -4 markets. National product tour exhibitions were staged, which allowed users to experience vendors’ products and technologies and improved market influence and product penetration.
Industry-specific markets were notably differentiated
Laterally, little affected by the financial crisis, the telecommunication industry continued to maintain fairly rapid growth. In terms of market shares, it has overtaken the financial services, government and manufacturing sectors. There was an increase in TD and GSM investments from China Mobile, CDMA investment from China Telecom and GSM investment from China Unicom. Also, the fast-growing Internet market promoted the prosperity of value-added telecom services, which constituted a new driving force for the server market. Affected by the financial crisis and the devastating Wenchuan earthquake, some concentrated procurement projects in the financial services and government sectors were stopped, thus leading to decreased market growth in these sectors. In the educational sector, the 10 billion Yuan Project has already concluded. In 2008, the market in this sector performed below expectations.
Having reviewed the features of market growth in 2008, we now look forward to more bright spots in China’s x86 server market in the future.
Green Energy-saving and Virtualization Applications Will Be the Development Directions for the Server Industry
Green, environmentally friendly, energy-saving and consumption reduction have become the themes for the server industry to develop. An increasing number of users now make green, environmentally friendly, energy-saving choices and consumption reduction priorities in their product procurement. Likewise, server suppliers have also made energy-saving and environmentally friendly factors big selling points of their products. In particular, with the rise of energy price and the fast growth of computing power, the high
energy-consuming physical infrastructure of data centers will be gradually discarded and replaced by a new generation of products that can embody the green and environmentally friendly philosophy. We can see that green and energy-saving products are approaching. Green energy-saving and virtualization applications will also become the key breakthrough points for differentiated product competition between vendors in the future.
Tier-3 Vendors Will Face a Life-or-death Test
In the future, competition between brands will intensify. Currently, the overall market is still dominated by foreign brand vendors, with over 70% of the market shares. As international brand vendors compete in the market at lower tiers, the margin for domestic vendors has been further reduced. More domestic vendors have started to look for opportunities in differentiated market segments, with more apparent brand differentiation. With global economic recession, international brand vendors will shift their attention to developing countries, which are less affected by the financial crisis. In the future, international brand vendors will make a greater impact on the market. The possibility of these vendors waging price wars to gain market share should not be excluded. Some Tier-3 vendors that lack competition mechanisms will face a life-or-death test.
Telecommunications Industry the Driving Force for Market Growth in 2009
CCID Consulting believes that, affected by the macroeconomic environment, industry users will become more cautious about their IT expenditure. Their urgency for product renewal and technological upgrading will be weakened or stopped altogether, which will be more apparent in the financial service industry. The telecommunications industry is only slightly affected by the financial crisis. In China, the industry is still growing fast. 3G-led investments are deepening. Meanwhile, the demand for such value-added telecom services as video, online games and search engines is strong. The telecommunications industry will become the main driving force for market growth in 2009. The transportation, healthcare and environmental protection industries will be the biggest beneficiaries of the government’s
four-trillion-yuan economic stimulus package, and related IT expenditures will increase. CCID Consulting forecasts that in 2009, 776,000 x86 servers will be sold, generating revenues of 13.98 billion Yuan, up by 13.9% and 12.9% over 2008, respectively.
About CCID Consulting
CCID Consulting Co., Ltd. (hereinafter known as CCID Consulting), the first Chinese consulting firm listed in the Growth Enterprise Market of the Stock Exchange (GEM) of Hong Kong (stock code: 8235.HK), is directly affiliated with China Center for Information Industry Development (hereinafter known as CCID Group). Headquartered in Beijing, CCID Consulting has so far set up branch offices in Shanghai, Guangzhou, Shenzhen, Wuhan and Chengdu, with over 300 professional consultants after many years of development. The company’s business scope has covered over 200 large and medium-sized cities in China.
Based on major areas of competitiveness: industrial resources, information technology and data channels, CCID Consulting provides customers with public policy establishment, industry competitiveness upgrading, development strategy and planning, marketing strategy and research, HR management, IT programming and management. CCID Consulting’s customers range from industrial users in electronics, telecommunications, energy, finance, automobile, to government departments at all levels and diversified industrial parks. CCID Consulting commits itself to becoming the No. 1 advisor for enterprise management, the No. 1 consultancy for government decisions and the No. 1 brand for informatization consulting.
