The Middle East and Africa (MEA) enterprise hardware market, comprising servers and external storage, remained in a passive growth state, according to the latest figures released by the International Data Corporation (IDC).
In a statement referencing its MEA Quarterly Server and Disk Storage Systems Tracker, the research firm says the market expanded a sluggish 3.8% year-on-year in the third quarter of 2014 to total $522.9 million. Much of the growth was spurred by infrastructure deals within the oil and gas, telecommunications and government verticals.
According to Swapna Subramani, research manager for systems and infrastructure solutions at IDC MEA and Turkey, this was due to a slowdown or decline in server shipments in the quarter because of the postponement of many business projects.
"The MEA enterprise hardware market is poised to take a new direction in terms of infrastructure investment in 2015," says Subramani. "We are expecting to see a shift in focus towards efficiency and consolidation, with demand moving from volume products to value products."
She explains enterprise IT spending dynamics is seeing a change. Enterprises prefer not to stack up on servers or storage anymore. But they would like to optimise their purchases and improve operational efficiencies, says Subramani.
She adds the MEA region's x86 server market witnessed a 3% year-on-year increase in value, but a 6.4% decline in unit terms during Q3 2014.
"The dynamics of server adoption within enterprises has seen a major shift in the past six to eight quarters," says Subramani. "Enterprises are now looking at consolidated and converged infrastructures with the focus shifting from boosting server capacity and volumes to optimising the server-installed base and enabling cloud technologies."
Subramani points out, with virtualisation and consolidation, there is now a decline in unit shipments, but an increase in value of the infrastructure. Therefore, the demand is moving from volume products to value products, she adds.
As such, the growth seen in the x86 server market's value, and the corresponding decline in volume can be attributed to the increased adoption of virtualisation technologies that utilise fewer server units than is the case in traditional data centres, says Subramani.
It has, therefore, become critical for storage manufacturers, channel partners, component suppliers and other storage market stakeholders to have access to the type of information needed to recognise changes in the hardware market, caused by server virtualisation adoption, says IDC.
SA's enterprise market also continued to decline in the third quarter of 2014, registering a 5.6% slump in enterprise hardware shipments. The rand depreciation made this market drastically decline this quarter, says Subramani.
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