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July 9, 2013

IDC Forecasts 7 Percent Annual Growth for Global HPC Market

Alex Woodie

The global HPC market has recovered from the great recession and is now poised to grow at a compound annual growth rate (CAGR) of 6.8 to 7.8 percent through 2016, with growth at the high end supercomputer market and China leading the way, the research firm IDC said at the recent ISC 2013 event in Germany.

While the overall HPC market has picked up where it left off in 2009 following the collapse of the global economy, not all segments of the marketplace are equal. For instance, growth in the supercomputer segment, which IDC defines as systems $500,000 and up, didn’t even see a blip despite the economic turmoil.

“There was no recession in supercomputers, but the lower half of the market shrunk. It got cut almost in half,” IDC analyst Earl Joseph said during a presentation at ISC 2013. Growth of smaller HPC systems just resumed during the first quarter of this year, he noted. The combined workgroup and department HPC system segments are expected to grow from just shy of about $5 billion in 2012 to just shy of about $7 billion by 2016, according to IDC figures.

There are also important differences in HPC system spending according to geography. China and Germany have demonstrated the most consistent “lock step” growth in HPC systems over the last few years, Joseph said; growth in those two countries has been primarily driven by supercomputer sales.

The HPC market in France, which is about the same size now as China’s, has been flat since 2008, at just under $600 billion in spending per year. Were it not for healthy growth in supercomputers, France would have shown a net decline in HPC spending.

Joseph commended the commitments that European politicians have made to HPC, including the launch of two €1 billion-plus research projects into modeling brain functions and graphene, which is an allotrope of carbon. “In my personal view, this is one of the best strategies that can take place: Pick out a couple application areas that you have strong expertise in already that you feel you can lead the world for the next decade, and really put your money against those,” he said.

The HPC market in the United States is still the world’s largest, but it also has not fully recovered from the great recession. According to IDC figures, the overall HPC market in the US went from just shy of $5 billion in spending in 2008 to about $4.6 billion in 2011, the last year for which IDC provided figures. Sales of supercomputers, of course, have proved resilient over that stretch, and grew more than 50 percent, to $1.8 billion in 2011.

Despite the global growth in HPC systems, the number of HPC systems actually shipping has declined. This, of course, is due to the effect that strong sales of supercomputers is having. “Everybody is buying larger systems,” Joseph says. “A lot of that is related to putting accelerators in…[and] a lot more memory.”

In the future, IDC expects HPC computing to benefit from the intersection of the “four pillars” of macro computing trends, which include mobile broadband, social business, big data/analytics, and cloud services. Together, these “four pillars” make up the “third platform” that is in the process of superseding the computing world’s first two platforms, mainframes and client-server computing, respectively.

“HPC has a major role in a number of these,” Joseph said. “We’re seeing HPC used by companies like Paypal and Geico–traditional places where you wouldn’t see technical computing, are now moving to HPC.” The advent of cloud-based HPC services is also spreading the use of technical computing to organizations that weren’t traditional HPC users.

Once an organization goes HPC, they rarely go back. The IDC cited a worldwide study that found 97 percent of companies that had adopted supercomputing said “they could no longer complete or survive without it.”

It’s no surprise, then, that many nations around the world have made investments in supercomputing a priority. The IDC sites a 2009 speech by Russia president Dmitry Medvedev, where he warned that, without more investment in supercomputers, “Russian products will no longer be competitive or of interest to potential buyers.”

Joseph also commended South Korea for basically making HPC investments a matter of law. “If Korea is to survive in this increasingly competitive world, it must not neglect nurturing the supercomputer industry, which has emerged as a new growth driver in advanced countries,” the IDC quotes Rep. Chung Doo-un of South Korea’s Grand National Party as saying in June 2010.

To out compute, the firm says, is to out compete. However, the IDC also knocks the US for not investing enough in building exascale-class systems. The lone quote in IDC’s slide deck from President Barack Obama on the matter of HPC spending was in his 2011 State of the Union address, when the he noted China’s growth in supercomputers.

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