The Week in Review

By John E. West

January 29, 2009

Here is a collection of highlights, selected totally subjectively, from this week’s HPC news stream as reported at insideHPC.com and HPCwire.

10 words and a link

Class action filed against Rackable for alleged securities laws violations

IBM lays off 2,800, rumors of more coming

Searching for the “-gpu” option

U of Illinois launches parallel computing seminar series

NCSA Symposium on Application Accelerators in HPC

University of Magdeburg to deploy SiCortex

IBM opens scientific cloud project in Qatar, Africa

Butte super may pay off for Butte already

Taiwan U becomes CUDA center of excellence

Linux Foundation Collaboration Summit 2009

REvolution Computing makes ‘R’ available for download

IDC forecasts declining HPC systems sales

This sounds like a no-brainer, but keep in mind that predictions right now are all over the map and depend upon how you slice the market. The Platform/Waters survey predicts HPC sales will be up in the financial sector (and this was echoed in a recent interview I had with Verari for HPCwire), and Addison Snell of Tabor Research recently reiterated his cautiously positive predictions for 2009.

IDC sent an email around to one of its lists lately announcing its new analysis, and I got a copy. Motivated by the dramatic changes in the economic picture, IDC has created a new five-year forecast and intends to update it quarterly until “things settle down.”

The highlights:

The new HPC base case forecast predicts a decline in 2008, followed by an additional modest decline in 2009, then a return to growth in 2010 to 2012, resulting in an overall CAGR from 2007 to 2012 of 3.1% in revenues and 2.7% in HPC systems sold.

We are projecting that 2008 will end with $9.6 billion in technical server revenues from 184,605 system unit sales with an overall average selling price (ASP) of $52,300. This revised forecast for 2008 represents a 4.2% decline in HPC server revenues from 2007, and a reduction of 20.0% in system units sold. The rising ASPs and dropping units observed in the first three quarters of the year indicate that many discretionary sales at the lower end of the market were curtailed.

We are now projecting the HPC market will eventually return to a robust 9% growth rate (after the decline) and reach $11.7 billion by 2012, with 263,000 systems sold (note that systems in the case is referring to an entire cluster, not a single node).

Gov Bill Richardson points to the next job for Encanto

You’ll recall that early last year New Mexico’s big (like number 3 on the Nov 2007 TOP500 list big) SGI started running jobs from outside users, and that NM’s plans for the machine were such that it would “pay for itself.” Gov Richardson delivered his state of the state address last week, and Encanto got a mention:

We made a great step forward when we initiated the state supercomputing center – the first public-private partnership of its kind. Now companies and universities are using the supercomputer to create alternative fuels, develop solar energy projects, and attract millions of dollars in venture capital. And the supercomputer’s next task? Turning two-dimensional movies into 3D movies for Hollywood and earning hard dollars for state coffers.

I guess I hope he can pull it off, but there are easier ways to make money for the state than selling cycles. It didn’t work out so well for Network.com, did it?

Senate focuses on different priorities in 2009 stimulus than House

The CRA Policy Blog reports that the highlights from the Senate version of the 2009 stimulus bill (reported earlier) are in. As the post details, the Senate has different priorities from the House, for example giving $2.6B less to the NSF than the House bill does. More details in their post.

They do provide a really handy link that compares what we know about the two versions side by side — check that out here.

Sun announces Q2, posts loss

Sun announced its Q2 results for fiscal 2009 this week with both revenues and margin down year over year, but up slightly from Q1:

Revenues for the second quarter of fiscal 2009 were $3.220 billion, a decrease of 10.9 percent as compared with $3.615 billion for the second quarter of fiscal 2008, and an increase of 7.7 percent as compared with $2.990 billion for the first quarter of fiscal 2009. Total gross margin as a percent of revenues was 41.9, a decrease of 6.6 percentage points as compared with the second quarter of fiscal 2008 and an increase of 1.7 percentage points as compared with the first quarter of fiscal 2009.

The company posted a loss for the quarter, primarily due to restructuring charges related to the layoff. However, the loss was much less than Q1, and doesn’t necessarily bode ill for future performance when taking the restructuring charge out of the picture and factoring increased savings in future quarters as severance packages and lease terminations, etc., finally move off the books and reduce operating expenses:

Net loss for the second quarter of fiscal 2009 on a GAAP basis was $209 million, or $(0.28) per share on a diluted basis, as compared with a net income of $260 million, or $0.31 per share, for the second quarter of fiscal 2008, and compared with a net loss of $1.677 billion, or $(2.24) per share, for the first quarter of fiscal 2009. GAAP net loss per share includes a restructuring charge of $222 million primarily related to the restructuring announcement of November 2008.

Looking at non-GAAP, which excludes some of the weird software and service revenue recognition rules, restructuring, impairment of goodwill, and a few other nutty accounting foofaraws, the company made money:

On a non-GAAP basis, net income for the second quarter of fiscal 2009 was $114 million, or $0.15 per share on a diluted basis, as compared with a non-GAAP net income of $409 million, or $0.50 per share, for the second quarter of fiscal 2008, and compared with a non-GAAP net loss of $65 million, or $(0.09) per share, for the first quarter of fiscal 2009.

As I’ve learned recently, non-GAAP results aren’t necessarily a facile ploy by companies to provide a ray of sunshine when the GAAP reporting puts them in a loss position. There are good reasons to consider both in evaluating the current health of a company, and non-GAAP results may give a better picture of actual day-to-day health, but it’s important to understand what’s been left out when you look at non-GAAP results. YMMV.

—–

John West is part of the team that summarizes the headlines in HPC news every day at insideHPC.com. You can contact him at [email protected].

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