While this is the case with the worldwide market, the India story is no different. But there is reason for hope as industry analysts clearly predict to see much better days in the future.

Naveen Mishra, Senior Research Analyst at Gartner, says, "Recession has interrupted the overall economy worldwide. There has been a strain in all the markets including IT. Limited spending in IT has led to a considerable dip in sales, and hardware sector is the worst hit when compared to the software and services sectors. As a result, the server market has been showing a decline." Among the worst hit sectors are BFSI, manufacturing, and ITES.

Gartner says that the Indian server market witnessed more than 15 percent decline in the first quarter of 2009 from the final quarter of 2008. (Market fell from $150 million in Q408 to $130 million in Q109.) "However, we do see some early signs of recovery," Mishra adds. He says that the Indian economy in particular would witness a fast recovery and the domestic scenario would improve in the coming quarter.

Vendors are also quite upbeat about the coming quarters as they believe that during recession, credit crunch was the only reason for companies to stop buying servers and that there is still a growing demand among them. The low and mid-range servers faced a huge impact due to credit crunch. At the same time, they say, recession has made the least impact on the high-end server market.

Shailesh Agarwal, Vice President, Sales Programs - Systems and Technology Group, IBM India/SA, says, "We do understand that a lot of enterprises are realigning their businesses and currently there is a significant dip in their buying. Even if they buy, sales cycles are longer. But server is still a growth market and we do not see a lack of demand in the market for servers."