BEIJING, May 15 /Xinhua-PRNewswire/ -- The latest Analysis Report by CCID Consulting, China's leading research, consulting and IT outsourcing service provider, and the first Chinese consulting firm listed in Hong Kong (stock code: HK08235), on China's x86 Server Market in 2007Q1 shows that sales revenues in the market in 2007Q1 reached 2.39 billion Yuan, up by 10.7% year-on-year. Strong purchasing power in the low-end server market is still the main driving force for the x86 server market.
Fig. 1 Changes in Size of China's x86 Server Market in 2007Q1
http://www.ccidconsulting.com/upload/11516.jpg
Source: CCID Consulting, April 2007
Reviewing the trend of China's x86 server market in 2007Q1, CCID Consulting finds that the market had the following main features:
(1) Competition in the low- and middle-end market intensified, while a new round of market reshuffling looks imminent.
In 2007Q1, competitions in the low- and middle-end market intensified. Foreign vendors continued to move their high-end technologies downwards and actively lowered their product prices. The low- and middle-end market caused a major impact on domestic brands. As for competition patterns, foreign vendors continued to maintain absolute advantages and grew faster than average market growth. Among them, HP claimed the No.1 spot in the market, with a market share of 21.8%. Langchao topped domestic brands, with a market share of 11.3%. However, facing competition from foreign vendors, the situation does not look promising for domestic brands. In particular, almost all foreign brands expanded their x86 server product lines in 2007. All their servers can be deployed with chips from Intel and AMD. This offers more flexible and more diversified choices for users. There is no doubt that this has increased foreign brands' bargaining chip. Domestic brands will face a starker environment for their long-term survival, and a new round of market reshuffling looks imminent. In the future, the server camps will polarize further at the product, technology and price ends.
(2) New dual-core and four-core products were introduced, while two-way and dual-core products grew fast.
With the penetration and acceleration of dual-core products and the continuous introduction of new four-core products, multi-core servers have shown more and more powerful overall performances. This has also promoted users to make choices between multiple ways and multiple cores when purchasing servers. Meanwhile, the emergence of multi-core technologies and products has created good conditions for virtual applications. This has greatly raised server utilization rate. In particular, some SMB users can use the technology to deploy multiple applications on one server, thus greatly lowering the cost of product purchase and maintenance as well as fully protecting users' investment. In 2007Q1, two-way and dual-core servers grew fast and became the leading product in the market.
(3) New applications in industries injected new vitality into the market.
For industry-specific markets, there is strong demand in the telecom, transportation, financial services and government sectors. With the approach of the 2008 Olympic Games, transportation information systems building has notably gathered pace. The extremely buoyant securities market has yet again made the once sluggish financial market active. In the securities industry, the application demand for CRM, risk management, entrusted order placement and analysis systems has resulted in a fast growth of server procurement. As for E-government building, there has been a notable growth in the demand for urban emergency command, sanitation supervision, medical aid, government public security and public utilities. These new applications have also injected new vitality into the server market.
(4) Regional markets became the center of competition.
Currently, there is lack of reserve strength for purchase in the server markets of the 1st and 2nd tiers. With the deepening of information system building, there is a strong server purchasing power in the markets of the 3rd and 4th tiers. In 2007Q1, all major vendors strengthened their strategic operations in regional markets, and made regional channel expansion as their key area of work. The idea was to strengthen against competition for the markets of the 3rd and 4th tiers. In the future, SIs/ISVs will get a more important channel position. Vendors and regional value-added channel distributors will forge closer cooperation. On one hand, vendors will increase their shares of the regional markets. On the other hand, they will make use of SIs/ISVs' industry influence to enter into new industries.
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CCID Consulting Co., Ltd. (also 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: HK08235), is a direct affiliate of the 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 and Harbin, with over 300 professional consultants and industry experts. The Company's business scope has covered over 200 large- and medium-sized cities in China. Apart from home market development, CCID Consulting is establishing international cooperation links across the United States, the Asia-Pacific region and Europe, by setting up agents in the U.S., Japan, South Korea, Australia, Singapore, Italy and Russia, with the aim of going global.
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