As the Indian IT industry and the businesses related to it face the music of economic downturn, the Indian server market too does not stay insulated, and has experienced sluggish growth.

October onwards this year, growth in the server segment has slowed on a month-on-month, sequential basis, and it is expected that by December-end, there will be around 12% dip in sales. The Indian server market is currently pegged at $733 million.

?The server market has grown around 20% in India as compared to last year, but October onwards the growth has been pretty sluggish and as far as 2009 is concerned, we are expecting the growth to remain flat,? commented Naveen Mishra, senior research analyst, Gartner. ?July-August-September has been a good period for the server market as far as India is concerned. However, October-November-December has definitely not been as good as compared to the similar period during the earlier years,? he added.

Overall, the segment is expected to post a year-on-year growth of 20%, up from $610 million in 2007. However, as industry players do not expect a similar growth in the coming year due to cost measurement initiatives of companies, they feel that shipment of servers to India will see a growth of around 10%.

?The shipment of products to India will see a growth of around 10% as India is still seen as a comparatively growing market. But we should also note that the increase of shipment will only be of cheaper products and not the high-end products,? commented Mishra.

The server market in India is seeing a decent growth across verticals such as BFSI, communications and media, manufacturing as well as government and education. However, many vendors are seeing decision cycles by customers getting longer.

?In some instances, we are seeing decision cycles to be longer, but fundamental demand is still strong,? Pallab Talukdar, director, enterprise business, DELL, India.

Though there has not been a cut in pricing, enterprise customers are pressurizing vendors to reduce prices. Hence, there could be some reduction in pricing, especially on larger deals for the enterprise customers.

?There could be some pricing cut as far as the large enterprise deals are concerned as the market is asking the vendors to reduce prices. But the slash in pricing might not be too significant,? commented Mishra.

?And there are hardly any chances of pricing cut in the regular everyday businesses,? he added.