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The East Africa enterprise infrastructure hardware market (comprising Kenya, Ethiopia, Tanzania, and Uganda) experienced a slight year-on-year (YoY) decline of 4.5% in the first half of 2017, according to the latest insights from International Data Corporation (IDC). The global technology research and consulting firm's latest Quarterly Server and Disk Storage Systems Tracker shows the market totaled $37.39 million in H1 2017.
The region's biggest market, Kenya, closed H1 2017 down 9.9% YoY at $23.47 million, with the education and small business segments experiencing the biggest slumps. Servers accounted for $12.17 million of this total in H1 2017, down 13.7% YoY, while storage revenues declined 5.5% over the same period to total $11.30 million.
"The declines in Kenya's enterprise infrastructure hardware market were primarily caused by various inhibitors linked to the country's challenging economic environment," says Kirui Andrew, a research analyst for systems and infrastructure solutions at IDC East Africa "This situation was compounded by anxiety leading up to the general elections that were hosted in August, as well as by difficulties in accessing credit due to monetary policy changes that negatively impacted small businesses."
Despite the emergence of political unrest towards the end of 2016, Ethiopia's x86 server market grew an impressive 50.4% YoY in H1 2017 to total $8.33 million, propelled by the continuation of double-digit annual economic growth in the country. Austerity measures saw the Tanzanian x86 server market shrink 28.8% YoY to $2.75 million in H12017, while the Ugandan x86 server market declined 22.0% to $2.53 million due to adverse drought effects, a slow recovery from election-related uncertainty, and turmoil in the banking sector that restricted access to credit.
Huawei was the overall leader of the East Africa server hardware market in H1 2017 with 27.2% share. Inspur overtook Hewlett Packard Enterprise (HPE) into second place, accounting for 22.8% of the market's value courtesy of its strong performance in the government-to-government space. HPE slipped to third with 18.7% share, down from 29.1% in H1 2016. Dell EMC remained in fourth place with 9.8% share, while Lenovo rounded out the top five vendors at 6.5%.
In the Kenyan storage market, Dell EMC consolidated its position as leader with 46.8% share following the merger of Dell and EMC towards the end of 2016. This has given Dell EMC a competitive advantage due to its ability to sell storage products across all price brands – low-end, mid-range, and high-end. Huawei ranked second in the Kenyan storage market for H1 2017 with 14.4% share.
"Looking ahead, IDC expects the East African enterprise infrastructure hardware market to decline 7.0% YoY in H2 2017," says Andrew. "The uncertain political situation will lead some of the region's governments to delay funding for key projects, while rising inflation rates will also inhibit the market's performance in H2 2017. That said, IDC anticipates a full market recovery to begin from early 2018."
International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,100 analysts worldwide, IDC offers global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. IDC's analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a subsidiary of IDG, the world's leading technology media, research, and events company.