$39 Billion Worldwide HPC Market Faces 3.7% COVID-related Drop in 2020

By Tiffany Trader

July 29, 2020

Global HPC market revenue reached $39 billion in 2019, growing a healthy 8.2 percent over 2018, according to the latest analysis from Intersect360 Research. A 3.7 percent COVID-related contraction is in store for 2020, ending a ten-year growth streak. The horizon still looks bright, however; the analyst firm is forecasting a rebound spike in 2021 and a five-year compound annual growth rate of 7.1 percent that would bring the total HPC market to $55 billion at the end of 2024.

The big 2019 winners in Intersect360 Research’s final accounting were HPE and Dell EMC, which ended the year in a virtual tie, together leading HPC system revenue with a combined 60 percent market share. These same companies also topped the storage segmentation by revenue, with Dell EMC maintaining the lead that it has held since 2017, after Dell acquired EMC.

The COVID-19 pandemic thought to have originated in Wuhan, China, in December 2019, did not influence the 2019 numbers from what Intersect360 can tell. And while the pandemic is impacting the 2020 forecast, the current outlook is slightly better than the midpoint of the preliminary guidance offered in March that projected a flat to 12 percent drop.

“The biggest thing contributing [to the updated guidance] is that effects internationally have not been as bad as we might have feared,” Addison Snell, founder and CEO of Intersect360 Research, told HPCwire. “International economies seem to really have been recovering. And cloud is absorbing a lot. The geographic effects are kind of the reverse of what we would have seen or foreseen from March. Looking at it then, it seemed like Asia and Europe were going to be worse than North America. And if you ask me today, I think it’s the other way around.”

“The good news is we’ve seen it before,” said Snell, referencing other recessions and disruptions. “Most of this shortfall is from purchases that are delayed, not canceled. So long as the economy comes back in 2021, we’ll see a big spike as those delayed HPC purchases get realized.”

The major asterisk to this guidance is that it presumes that the economic effects of the pandemic are essentially contained to this year or, at the worst, early next year. “This isn’t to say everyone has to be cured and there’s a universal vaccine by that point, but rather that we start getting past the economic effects by the early part of the next calendar year. If we don’t, and we’ve got another recession here, then all bets are off, and we have to tear up the forecast and go to a new one,” said Snell.

With an 8.2 percent year-over-year growth rate, 2019 came in a point above Intersect360’s original forecast. Despite lighter growth on the hardware side, non-hardware portions of the market filled in the gap, and ensured the strong finish to the year, said Snell.

“On-premise hardware had a much lower growth rate; servers and storage were both between 2-3 percent in growth with cloud computing taking a much larger share,” said Snell. Additionally, there was an increase in “things that aren’t really cloud, but kind of look like cloud — arrangements like managed services contracts and facilities outsourcing.”

Server and storage spending also saw a shift, where the biggest vendors lost revenue, but the markets demonstrated overall modest growth due to gain in revenue among smaller vendors. On the server side, HPE led Dell EMC by less than a half-point of market share, such that HPE holds on to its server market share lead for the seventh consecutive year.

HPE did benefit somewhat from its acquisition of Cray, which was completed in September 2019. “That 14 weeks of revenue could have made the difference between HPE being number one or Dell being number one,” said Snell. “It’s a situation where, as an analyst, I hate to declare either one of them as being number one. It’s a virtual tie at the top of the market, and it’s just how the numbers are washing out.”

Dell EMC and HPE were also dominant in storage with Dell EMC holding onto its number-one positioning. NetApp experienced a loss of market share that dropped the storage vendor into third place.

Along with NetApp, IBM also lost share (in storage and servers), while Lenovo had a strong showing, the biggest storage vendor by market share to show growth. One thing to consider though is that Lenovo sells Netapp storage solutions with Lenovo branding, and given that revenue only goes on one ledger, that may have amplified Netapp’s loss, according to Snell.

DDN had “a fantastic year,” per Snell, posting one of the highest year-over-year growth rates. And European vendor Atos saw strong market growth for both storage and servers. It was a year where business was stronger outside the U.S., said Snell, but “there was also a trend toward smaller vendors in general.”

Does the revenue shift from the bigger companies to the smaller companies run counter to the consolidation we’re seeing with M&A activity in HPC?

Snell, “What I would say about that is that no amount of M&A would consolidate all of the diversification that’s going on in the technology space right now. As we’re seeing movements toward new workloads and new technologies, there’s just too much experimentation to be done in the end user community, it would be difficult for any one big company to say, well, we’re on top of all of these different things, and to be offering everything to everybody. We’ve been on a pendulum swing toward more specialization and less generalization in this space and seeing that spread of market share is indicative of that.”

In the vertical markets, government grew faster than industry last year, reversing a six-year trend; however, the commercial sector is still more than half the market with a 58 percent share.

“The biggest growth came from the different government sectors,” said Snell. “That was where we saw double digit growth year-over-year; national labs, national security, national agency, even state and local government had double digit growth.”

Vertical markets hardest hit by COVID-19 are energy, automotive, aerospace manufacturing and retail, according to Intersect360’s analysis. Not surprisingly, government research and pharmaceuticals are maintaining or growing during the pandemic.

On the commercial side, finance and manufacturing are still on top. Whether finance is number one or manufacturing is number one depends on whether consumer product manufacturing and automotive and aerospace manufacturing are considered the same vertical or different verticals. “We separate them out in our charts but some of our clients put them back together,” said Snell. “Are Procter and Gamble and Toyota in the same vertical market or not? That’s just a matter of taste how people like to do that.”

Snell said he expects government to provide steady growth, being less likely to experience the significant swings that can occur in commercial segments.

“There can be a lot of extreme short-term things that happen with vertical market shares and with vendor revenue shares over the next couple of years. And I’m foreseeing that as analysts we’ll be telling people not to overreact to those,” said Snell.

The HPC cloud market had its fifth year of double-digit growth in the last six years, and is on track to surge even higher in 2020.

“Cloud, interestingly enough, will do the opposite of what everything else does,” Snell observed. “Because when the industry constrains its on-premise acquisitions, cloud makes up part of the gap. So when everything else goes down, cloud will go up. Overall cloud will exceed its previous very high growth forecast for this year, according to our forecast.”

The HPC market market grew at a 4.4 percent CAGR from 2014-2019, according to Intersect360’s modeling. The analyst firm’s refreshed five-year forecast anticipates a CAGR of 7.1 percent through 2024.

Addison Snell will be discussing these latest market numbers and trends in a free webinar on Thursday, August 6, at noon Eastern Time.

Subscribe to HPCwire's Weekly Update!

Be the most informed person in the room! Stay ahead of the tech trends with industy updates delivered to you every week!

SC21 Was Unlike Any Other — Was That a Good Thing?

December 3, 2021

For a long time, the promised in-person SC21 seemed like an impossible fever dream, the assurances of a prominent physical component persisting across years of canceled conferences, including two virtual ISCs and the virtual SC20. With the advent of the Delta variant, Covid surges in St. Louis and contention over vaccine requirements... Read more…

The Green500’s Crystal Anniversary Sees MN-3 Crystallize Its Winning Streak

December 2, 2021

“This is the 30th Green500,” said Wu Feng, custodian of the Green500 list, at the list’s SC21 birds-of-a-feather session. “You could say 15 years of Green500, which makes it, I guess, the crystal anniversary.” Indeed, HPCwire marked the 15th anniversary of the Green500 – which ranks supercomputers by flops-per-watt, rather than just by flops – earlier this year with... Read more…

AWS Arm-based Graviton3 Instances Now in Preview

December 1, 2021

Three years after unveiling the first generation of its AWS Graviton chip-powered instances in 2018, Amazon Web Services announced that the third generation of the processors – the AWS Graviton3 – will power all-new Amazon Elastic Compute 2 (EC2) C7g instances that are now available in preview. Debuting at the AWS re:Invent 2021... Read more…

Nvidia Dominates Latest MLPerf Results but Competitors Start Speaking Up

December 1, 2021

MLCommons today released its fifth round of MLPerf training benchmark results with Nvidia GPUs again dominating. That said, a few other AI accelerator companies participated and, one of them, Graphcore, even held a separ Read more…

HPC Career Notes: December 2021 Edition

December 1, 2021

In this monthly feature, we’ll keep you up-to-date on the latest career developments for individuals in the high-performance computing community. Whether it’s a promotion, new company hire, or even an accolade, we’ Read more…

AWS Solution Channel

Running a 3.2M vCPU HPC Workload on AWS with YellowDog

Historically, advances in fields such as meteorology, healthcare, and engineering, were achieved through large investments in on-premises computing infrastructure. Upfront capital investment and operational complexity have been the accepted norm of large-scale HPC research. Read more…

At SC21, Experts Ask: Can Fast HPC Be Green?

November 30, 2021

HPC is entering a new era: exascale is (somewhat) officially here, but Moore’s law is ending. Power consumption and other sustainability concerns loom over the enormous systems and chips of this new epoch, for both cost and compliance reasons. Reconciling the need to continue the supercomputer scale-up while reducing HPC’s environmental impacts... Read more…

SC21 Was Unlike Any Other — Was That a Good Thing?

December 3, 2021

For a long time, the promised in-person SC21 seemed like an impossible fever dream, the assurances of a prominent physical component persisting across years of canceled conferences, including two virtual ISCs and the virtual SC20. With the advent of the Delta variant, Covid surges in St. Louis and contention over vaccine requirements... Read more…

The Green500’s Crystal Anniversary Sees MN-3 Crystallize Its Winning Streak

December 2, 2021

“This is the 30th Green500,” said Wu Feng, custodian of the Green500 list, at the list’s SC21 birds-of-a-feather session. “You could say 15 years of Green500, which makes it, I guess, the crystal anniversary.” Indeed, HPCwire marked the 15th anniversary of the Green500 – which ranks supercomputers by flops-per-watt, rather than just by flops – earlier this year with... Read more…

Nvidia Dominates Latest MLPerf Results but Competitors Start Speaking Up

December 1, 2021

MLCommons today released its fifth round of MLPerf training benchmark results with Nvidia GPUs again dominating. That said, a few other AI accelerator companies Read more…

At SC21, Experts Ask: Can Fast HPC Be Green?

November 30, 2021

HPC is entering a new era: exascale is (somewhat) officially here, but Moore’s law is ending. Power consumption and other sustainability concerns loom over the enormous systems and chips of this new epoch, for both cost and compliance reasons. Reconciling the need to continue the supercomputer scale-up while reducing HPC’s environmental impacts... Read more…

Raja Koduri and Satoshi Matsuoka Discuss the Future of HPC at SC21

November 29, 2021

HPCwire's Managing Editor sits down with Intel's Raja Koduri and Riken's Satoshi Matsuoka in St. Louis for an off-the-cuff conversation about their SC21 experience, what comes after exascale and why they are collaborating. Koduri, senior vice president and general manager of Intel's accelerated computing systems and graphics (AXG) group, leads the team... Read more…

Jack Dongarra on SC21, the Top500 and His Retirement Plans

November 29, 2021

HPCwire's Managing Editor sits down with Jack Dongarra, Top500 co-founder and Distinguished Professor at the University of Tennessee, during SC21 in St. Louis to discuss the 2021 Top500 list, the outlook for global exascale computing, and what exactly is going on in that Viking helmet photo. Read more…

SC21: Larry Smarr on The Rise of Supernetwork Data Intensive Computing

November 26, 2021

Larry Smarr, founding director of Calit2 (now Distinguished Professor Emeritus at the University of California San Diego) and the first director of NCSA, is one of the seminal figures in the U.S. supercomputing community. What began as a personal drive, shared by others, to spur the creation of supercomputers in the U.S. for scientific use, later expanded into a... Read more…

Three Chinese Exascale Systems Detailed at SC21: Two Operational and One Delayed

November 24, 2021

Details about two previously rumored Chinese exascale systems came to light during last week’s SC21 proceedings. Asked about these systems during the Top500 media briefing on Monday, Nov. 15, list author and co-founder Jack Dongarra indicated he was aware of some very impressive results, but withheld comment when asked directly if he had... Read more…

IonQ Is First Quantum Startup to Go Public; Will It be First to Deliver Profits?

November 3, 2021

On October 1 of this year, IonQ became the first pure-play quantum computing start-up to go public. At this writing, the stock (NYSE: IONQ) was around $15 and its market capitalization was roughly $2.89 billion. Co-founder and chief scientist Chris Monroe says it was fun to have a few of the company’s roughly 100 employees travel to New York to ring the opening bell of the New York Stock... Read more…

Enter Dojo: Tesla Reveals Design for Modular Supercomputer & D1 Chip

August 20, 2021

Two months ago, Tesla revealed a massive GPU cluster that it said was “roughly the number five supercomputer in the world,” and which was just a precursor to Tesla’s real supercomputing moonshot: the long-rumored, little-detailed Dojo system. Read more…

Esperanto, Silicon in Hand, Champions the Efficiency of Its 1,092-Core RISC-V Chip

August 27, 2021

Esperanto Technologies made waves last December when it announced ET-SoC-1, a new RISC-V-based chip aimed at machine learning that packed nearly 1,100 cores onto a package small enough to fit six times over on a single PCIe card. Now, Esperanto is back, silicon in-hand and taking aim... Read more…

US Closes in on Exascale: Frontier Installation Is Underway

September 29, 2021

At the Advanced Scientific Computing Advisory Committee (ASCAC) meeting, held by Zoom this week (Sept. 29-30), it was revealed that the Frontier supercomputer is currently being installed at Oak Ridge National Laboratory in Oak Ridge, Tenn. The staff at the Oak Ridge Leadership... Read more…

AMD Launches Milan-X CPU with 3D V-Cache and Multichip Instinct MI200 GPU

November 8, 2021

At a virtual event this morning, AMD CEO Lisa Su unveiled the company’s latest and much-anticipated server products: the new Milan-X CPU, which leverages AMD’s new 3D V-Cache technology; and its new Instinct MI200 GPU, which provides up to 220 compute units across two Infinity Fabric-connected dies, delivering an astounding 47.9 peak double-precision teraflops. “We're in a high-performance computing megacycle, driven by the growing need to deploy additional compute performance... Read more…

Intel Reorgs HPC Group, Creates Two ‘Super Compute’ Groups

October 15, 2021

Following on changes made in June that moved Intel’s HPC unit out of the Data Platform Group and into the newly created Accelerated Computing Systems and Graphics (AXG) business unit, led by Raja Koduri, Intel is making further updates to the HPC group and announcing... Read more…

Intel Completes LLVM Adoption; Will End Updates to Classic C/C++ Compilers in Future

August 10, 2021

Intel reported in a blog this week that its adoption of the open source LLVM architecture for Intel’s C/C++ compiler is complete. The transition is part of In Read more…

Killer Instinct: AMD’s Multi-Chip MI200 GPU Readies for a Major Global Debut

October 21, 2021

AMD’s next-generation supercomputer GPU is on its way – and by all appearances, it’s about to make a name for itself. The AMD Radeon Instinct MI200 GPU (a successor to the MI100) will, over the next year, begin to power three massive systems on three continents: the United States’ exascale Frontier system; the European Union’s pre-exascale LUMI system; and Australia’s petascale Setonix system. Read more…

Leading Solution Providers

Contributors

Hot Chips: Here Come the DPUs and IPUs from Arm, Nvidia and Intel

August 25, 2021

The emergence of data processing units (DPU) and infrastructure processing units (IPU) as potentially important pieces in cloud and datacenter architectures was Read more…

D-Wave Embraces Gate-Based Quantum Computing; Charts Path Forward

October 21, 2021

Earlier this month D-Wave Systems, the quantum computing pioneer that has long championed quantum annealing-based quantum computing (and sometimes taken heat fo Read more…

HPE Wins $2B GreenLake HPC-as-a-Service Deal with NSA

September 1, 2021

In the heated, oft-contentious, government IT space, HPE has won a massive $2 billion contract to provide HPC and AI services to the United States’ National Security Agency (NSA). Following on the heels of the now-canceled $10 billion JEDI contract (reissued as JWCC) and a $10 billion... Read more…

The Latest MLPerf Inference Results: Nvidia GPUs Hold Sway but Here Come CPUs and Intel

September 22, 2021

The latest round of MLPerf inference benchmark (v 1.1) results was released today and Nvidia again dominated, sweeping the top spots in the closed (apples-to-ap Read more…

Ahead of ‘Dojo,’ Tesla Reveals Its Massive Precursor Supercomputer

June 22, 2021

In spring 2019, Tesla made cryptic reference to a project called Dojo, a “super-powerful training computer” for video data processing. Then, in summer 2020, Tesla CEO Elon Musk tweeted: “Tesla is developing a [neural network] training computer... Read more…

Three Chinese Exascale Systems Detailed at SC21: Two Operational and One Delayed

November 24, 2021

Details about two previously rumored Chinese exascale systems came to light during last week’s SC21 proceedings. Asked about these systems during the Top500 media briefing on Monday, Nov. 15, list author and co-founder Jack Dongarra indicated he was aware of some very impressive results, but withheld comment when asked directly if he had... Read more…

2021 Gordon Bell Prize Goes to Exascale-Powered Quantum Supremacy Challenge

November 18, 2021

Today at the hybrid virtual/in-person SC21 conference, the organizers announced the winners of the 2021 ACM Gordon Bell Prize: a team of Chinese researchers leveraging the new exascale Sunway system to simulate quantum circuits. The Gordon Bell Prize, which comes with an award of $10,000 courtesy of HPC pioneer Gordon Bell, is awarded annually... Read more…

Quantum Computer Market Headed to $830M in 2024

September 13, 2021

What is one to make of the quantum computing market? Energized (lots of funding) but still chaotic and advancing in unpredictable ways (e.g. competing qubit tec Read more…

  • arrow
  • Click Here for More Headlines
  • arrow
HPCwire