HPC Server Market Sees ‘Okay’ Q2

By Tiffany Trader

September 22, 2014

The worldwide market for HPC technical servers reached $2.45 billion in the second quarter of 2014, down 2.6 percent from the same period in 2013, when the market hit $2.51 billion, according to International Data Corporation (IDC) figures. The analyst group attributed the decline to relatively low supercomputer sales.

Despite the dip in year-over-year figures, revenues in the second quarter are 6.5 percent higher than the previous quarter, which yielded $2.3 billion. IDC characterized the first half of 2014 as a “weak Q1, followed by an okay Q2.”

IDC predicts a continued recovery from the economic recession that began in 2008 with the need for economic competitiveness fueling sales of HPC servers and the race to exascale computing spurring high-end system sales.

More specifically, IDC says “the second quarter market dynamics were driven by the continued recovery of the bottom half of the HPC market, consisting of systems sold for under $250,000. Systems at these price points were hit especially hard by the global economic recession that began in 2008, as many of these discretionary purchases were postponed or canceled. These sales began to recover in first quarter of 2013.”

The lower half of the HPC market corresponds to what IDC terms Divisional, Departmental, and Workgroup segments. The divisional segment – HPC systems selling for between $250,000 and $499,000 – had the strongest incline with revenue in this segment rising 11.3 percent year-over-year to $388.7 million. The departmental segment, the $100,000 to $249,000 price band, expanded by 0.9 percent year-over-year in the second quarter to $892.2 million. And revenue for workgroup systems, the sub-$100,000 machines, amounted to $444 million, up 7 percent year-over-year.

Revenues in the high-end Supercomputers segment (HPC systems sold for $500,000 and up) reached $725.1 million in the second quarter, up from $580 million the previous quarter, but down from the same quarter last year ($883.2 million).

Here’s how these numbers compare as a percentage of the total market. High-end supercomputers accounted for 29.7 percent of the overall market. The divisional segment represented 15.9 percent of total HPC systems revenue, and the workgroup (18.1 percent) and departmental segment (36.4 percent) combined make up 54.5 percent of all HPC server systems revenue in the quarter.

Unit shipments rose 6.6 percent year over year to 33,277 units, reflecting the growth of lower-priced systems that sell in higher volume. Unit sales are consistent with first quarter figures, showing only a .9 percent decline from Q1’s total of 33,577 units.

From a vendor perspective, HP and IBM captured 32.4 percent and 24.6 percent of overall revenue share, respectively, while Dell maintained its third place position with 16.3 percent of global revenue.

NEC, Bull, Dawning and SGI all made strong year-over-year revenue gains during the second quarter of 2014, driven by the acceptance of large systems. Additionally, several vendors in the combined “others” category saw significant regional sales, including China’s Inspur, boosting the quarterly growth of the “others” category by 12.8 percent.

The figures were part of the newly released International Data Corporation (IDC) Worldwide High-Performance Technical Server QView, announced at the 54th meeting of the IDC-operated HPC User Forum in Seattle.

One of IDC’s top 10 HPC predictions for 2014, delivered at the HPC User Forum last week, is that “HPC server market growth will continue in 2014, after a decline in 2013.” Another key insight shared by IDC analyst Earl Joseph is that “HPC vendor market share positions will likely shift greatly in 2014 and 2015.”

IDC also said that it was in the process of updating its forecasts, but it expects “healthy growth” in the 2015-2018 period.

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