Singapore server market staves off decline

Singapore is one of the few countries in the Asia-Pacific region to improve unit server shipments in first-quarter 2001 compared to fourth-quarter 2000, according to Gartner Group's Dataquest unit.

The finance and telecommunication sectors in Singapore are still spending money on servers to boost their Internet operations. This has helped to stave off a real decline in Singapore shipments in the first quarter of this year.

The server market in Singapore showed a 27 percent growth in shipments in Q1 2001 over Q1 2000.

Whilst facing challenging business conditions, Singapore also emerged as one of the few countries in the region to improve from a unit shipment perspective when compared to Q4.

These were the results of a report on the Asia-Pacific server market which was released by Gartner Dataquest last week.

Suzie Low, Gartner's senior industry analyst for hardware platforms in Singapore said: "Following on from the fourth quarter of the calendar year, when Singapore corporations typically increase spending in order to ensure budgets are used up, the first calendar quarter is traditionally slow. In particular, this is also due to the large number of festival and holidays during the period."

In addition, as Singapore's largest IT user and spender, the government has also continued to invest in and upgrade its IT infrastructure, she added.

Other factors which limited revenue growth in Singapore in Q1 included an unwillingness to embark on large scale spending by large corporations. Low said, "Given the number of U.S. multinationals with regional headquarters in Singapore, a general air of fiscal tightening is hardly surprising. As U.S. companies seek to trim costs, they are looking to regional centers to assist with this."

Outside of Singapore, the Asia Pacific server market, excluding Japan experience a sharp decline of 12.5 percent in unit shipments during Q1 2001 when compared to the Q4 of last year.

When compared to the corresponding first quarter of 2000 however, unit shipments led by China and Hong Kong actually witnessed growth in excess of 20 percent.

The mature markets such as Australia, Singapore and Korea witnessed minimal increases in server shipments year on year.

"All in all, the quarter past was a tough one. Sure we saw growth on the first quarter of 2000, but let's not forget that Q1 2000 came right on the heels on Y2K and was therefore itself fairly lackluster. If unit shipments in Q1 2001 had been down in Q1 2000, we would have been in real trouble," said Matthew Boon, Gartner Dataquest regional server program manager.

"The drop in units compared to Q4 2000 was fairly severe. The signs are that a lot of corporations, particularly in some of the regional centers such as Singapore, Hong Kong and Australia have delayed rather than cancelled purchase decisions as they wait and see whether the slowdown is set to be protracted or not."

India emerged as one of the more stable geographies in Asia Pacific as the only country to put on growth both quarter on quarter (Q4 2000 to Q1 2001) and year to year (Q1 2000 to Q1 2001) with 6 percent and 8 percent growth respectively achieved.

Boon said that India is set to experience significant growth moving forward. He said, "Clearly the signs that India is set to take off are there in the form of continued growth quarter on quarter while the rest of the region contracted."

The top three overall server vendors in Asia-Pacific are IBM, Compaq and Hewlett-Packard with 18 percent, 16 percent and 15 percent market share respectively.

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