FRAMINGHAM, Mass., Sept. 9 -- Factory revenue and unit shipments for the HPC technical server market exhibited 10 percent growth in the second quarter (2Q08), according to Jie Wu, IDC research manager for technical computing. Revenues grew 10 percent(1) over the first quarter and 4 percent compared to the same period last year, to reach $2.5 billion in the second quarter. Second-quarter 2008 shipments of server system units in the HPC market totaled 45,000, down 5 percent from the first quarter, while ASPs were up 16 percent compared to 1Q2008 due to an increase in higher-end system sales and softness in lower priced x86 servers. Wu said the second-quarter 2008 HPC server revenue leaders were HP with 37 percent market share, IBM with 27 percent, and Dell with 16 percent.

The HPC portion of the overall server market follows a different pattern due to the nature of spending on R&D projects. This was a strong quarter for the mid and high end of the market as shown by the increase in overall ASP (Average Selling Price). Government and university buyers have longer-term budget cycles that are not immediately impacted by economic slow downs. Economic shifts take over a year to work their way into these budgets. In addition, we are finding that many industrial buyers are still investing in their R&D to try to find ways to be more competitive in the tighter economy. IDC is closely watching the market to see when the broader economic softness impacts HPC spending.

"After more than a year of cross-analysis involving IDC's technical computing and enterprise server teams, we found ways to make OEM reporting of HPC server revenue even more consistent and robust," said Vernon Turner, senior vice president of IDC's Enterprise Infrastructure, Consumer, and Telecom research. "Our enhanced methodology has a major impact on better accounting for HPC server, storage, software and service revenues by more accurately separating server revenue from the other HPC revenue categories."

Turner said IDC has also enhanced its HPC market tracking to include peak performance and price/performance metrics.

The enhancements being incorporated into IDC's HPC tracking methodology include three major improvements:

• More consistent and concise tracking of HPC server revenues, by more clearly separating out non-server revenue items like storage, software and services.
  
  
• A more robust quarterly validation process, by using both HPC data and IDC's broader enterprise server analysis and data sources.
  
  
• In addition, IDC is enhancing its HPC market tracking to include peak performance and price/performance metrics.

"These changes reduce the 2007 overall HPC server market revenues on a pro forma adjusted basis to just over $10 billion. IDC projects that the HPC server market will grow at a compounded annual rate (CAGR) of 9.2 percent to reach $15.6 billion in 2012. This rate is in line with IDC projections before the recent methodology enhancements. The continued strong growth of this market is being driven primarily by clusters and newer processor technologies," according to Earl Joseph, IDC program vice president for HPC."

"Powered by their price/performance advantage, clusters now dominate all segments of HPC market. In addition, the HPC market is seeing a shift towards fatter nodes as multicore technology becomes pervasive. This is also driving the requirements for larger and faster memories, along with improved interconnection technologies," Joseph said.

(1) The quarterly comparisons are based on new adjusted figures for the earlier periods (1Q08 and 2Q07). The adjustments reflect the enhancements IDC made to its industry-leading HPC tracking methodology in the second quarter (2Q08).

About IDC

IDC is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. IDC helps IT professionals, business executives, and the investment community make fact-based decisions on technology purchases and business strategy. More than 900 IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 90 countries worldwide. For more than 43 years, IDC has provided strategic insights to help our clients achieve their key business objectives. IDC is a subsidiary of IDG, the world's leading technology media, research, and events company. You can learn more about IDC by visiting www.idc.com.

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Source: IDC