MUMBAI, India – 18th November, 2014 – The boom in information processing and data transfer activity in India has been encouraging investment in datacenters. Small and medium businesses/enterprises (SMBs/SMEs) in the country have been in expansion and transition mode. As information and communication technology (ICT) will play a vital role in their continued growth, captive and hosted datacenters are expected to account for a substantial portion of IT spending. This in turn will fuel demand for rack and rack options. In fact, the market prospects of rack and rack option suppliers will only brighten over the next five years as the Indian datacenter market gains momentum owing to steady domestic and international demand for IT services.
New analysis from Frost & Sullivan, India Rack and Rack Options Market, finds that the market earned revenues of INR 6.59 billion in fiscal year (FY) 2014 and estimates this to reach INR 10.31 billion in FY 2019. The study covers the end-user segments of datacenters, telecom, and SMEs/SMBs.
“With the increase in data usage among mobile users and rising tenancy ratio of towers, telecom infrastructure providers across India will also find use for rack and rack options,” said Frost & Sullivan Energy & Environmental Industry Analyst.
Nevertheless, the slow replacement rates of racks have contained the market’s pace of development. As a result of technical advancements in the components and raw materials used to manufacture racks, these products last for 15 years. Hence, end users rarely have to replace or upgrade rack units, a trend which has depressed market participants’ overall revenues.
The profitability of rack and rack option suppliers across India has also suffered due to the price sensitivity of the market, caused partially by the presence of a large number of unorganized suppliers in the country. Since the degree of technical change and product innovation are low in the market, the barriers to entry are also low and thus market competition is intense. Unorganized suppliers with sheet metal production capacities tend to offer basic racks at more affordable rates than organized suppliers, eroding the bargaining power of organized suppliers.
“Once new players enter the market, and technological development and product portfolio diversification gain pace among existing rack suppliers, competition will become even stiffer,” noted the Analyst. “Rack and rack option suppliers across India should position themselves as one-stop solution providers, who sell products ranging from power distribution units to cooling and management software, to succeed in the market.”
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India Rack and Rack Options Market is part of the Power Supplies & Batteries (http://www.powersupplies.frost.com) Growth Partnership Service program. Frost & Sullivan’s related studies include: Competitive Strategies Benchmarking in Data Center Physical Infrastructure Industry, Global Programmable Direct Current (DC) Power Supplies and Electronic Loads Market, Global Industrial UPS Market, and European Rack and Rack Options Market. All studies included in subscriptions provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants.
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