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HPC Matters is a joint blog consisting of contributors from the Tabor Communications team on their observations and insights into HPC matters.
June 25, 2008
Back at the Newport HPCC conference in 2007, I broached the sensitive topic of whether the current ultra-scale procurement programs were good for the HPC industry by driving innovation into the market; or were these programs, in fact, draining resources, margin and long term opportunity out of the market?
This remained a hot topic in 2008, with Stephen Wheat of Intel driving a discussion about the business and R&D model for HPC innovation and the countervailing trends and behavior of the large funding agencies. If you haven’t read John West’s April 25th article in HPCwire entitled “HPC Innovation in the Era of “Good Enough,” I would urge you to do so. Using Wheat’s presentation and comments by others, including Dan Reed, he captures the issues and makes some persuasive arguments about what needs to be done.
But getting back to the issue at hand, I would like you to ruminate on the following: If you were to look at the history of NSF Tier 2 bids, the number of submissions has declined substantially. As a case in point, in the recent round, the NSF received only five bids. If you were to look carefully, both IBM and HP were conspicuously absent. In comparison, in the first round, IBM alone submitted eight bids! I would ask why?
Deals such as TACC do little to help the issue and unfortunately drive the business fundamentals out of the HPC business. While the Agency folks may think these ultra-scale systems are buoyed through cross-subsidization, I can tell you first hand they are not. The HPC divisions of even the largest suppliers, such as IBM and HP, must stand on their own merits. This means a strong business model and robust margins. The dirty little secret is that despite the high ticket price of these systems, there is typically not enough money to cover the direct and indirect costs of building a petascale system (remember software!), let alone margin to invest in the next innovation cycle. And in my humble opinion, the problem is getting worse, not better.
Now clearly this is not a simple issue as the broader stakeholders are all party to this dance. For the vendor community, the lure of being "chosen" is huge, further reinforcing this dynamic. As a long-term industry observer, the graveyard of suppliers who have fallen victim to the "halo" of participation is deep, with LNXI being the most recent casualty. If the big guys can’t sustain it, who can?
Posted by Debra Goldfarb - June 24, 2008 @ 9:00 PM, Pacific Daylight Time
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