$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!

IBM Research Scales to 11,400 Cores for EDA

August 5, 2021

For many HPC users, their needs are not evenly distributed throughout a year: some might need few – if any – resources for months, then they might need a very large system for a week. For those kinds of users, large Read more…

Careers in Cybersecurity Featured at PEARC21

August 5, 2021

The PEARC21 (Practice & Experience in Advanced Research Computing) Student Program featured a Cybersecurity Careers Panel. Five experts shared lessons learned from more than 100 years of combined experience. While it Read more…

HPC Career Notes: August 2021 Edition

August 4, 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…

The Promise (and Necessity) of Runtime Systems like Charm++ in Exascale Power Management

August 4, 2021

Big heterogeneous computer systems, especially forthcoming exascale computers, are power hungry and difficult to program effectively. This is, of course, not an unrecognized problem. In a recent blog, Charmworks’ CEO S Read more…

Digging into the Atos-Nimbix Deal: Big US HPC and Global Cloud Aspirations. Look out HPE?

August 2, 2021

Behind Atos’s deal announced last week to acquire HPC-cloud specialist Nimbix are ramped-up plans to penetrate the U.S. HPC market and global expansion of its HPC cloud capabilities. Nimbix will become “an Atos HPC c Read more…

AWS Solution Channel

Pushing pixels, not data with NICE DCV

NICE DCV, our high-performance, low-latency remote-display protocol, was originally created for scientists and engineers who ran large workloads on far-away supercomputers, but needed to visualize data without moving it. Read more…

Berkeley Lab Makes Strides in Autonomous Discovery to Tackle the Data Deluge

August 2, 2021

Data production is outpacing the human capacity to process said data. Whether a giant radio telescope, a new particle accelerator or lidar data from autonomous cars, the sheer scale of the data generated is increasingly Read more…

Careers in Cybersecurity Featured at PEARC21

August 5, 2021

The PEARC21 (Practice & Experience in Advanced Research Computing) Student Program featured a Cybersecurity Careers Panel. Five experts shared lessons learn Read more…

Digging into the Atos-Nimbix Deal: Big US HPC and Global Cloud Aspirations. Look out HPE?

August 2, 2021

Behind Atos’s deal announced last week to acquire HPC-cloud specialist Nimbix are ramped-up plans to penetrate the U.S. HPC market and global expansion of its Read more…

What’s After Exascale? The Internet of Workflows Says HPE’s Nicolas Dubé

July 29, 2021

With the race to exascale computing in its final leg, it’s natural to wonder what the Post Exascale Era will look like. Nicolas Dubé, VP and chief technologist for HPE’s HPC business unit, agrees and shared his vision at Supercomputing Frontiers Europe 2021 held last week. The next big thing, he told the virtual audience at SFE21, is something that will connect HPC and (broadly) all of IT – into what Dubé calls The Internet of Workflows. Read more…

How UK Scientists Developed Transformative, HPC-Powered Coronavirus Sequencing System

July 29, 2021

In November 2020, the COVID-19 Genomics UK Consortium (COG-UK) won the HPCwire Readers’ Choice Award for Best HPC Collaboration for its CLIMB-COVID sequencing project. Launched in March 2020, CLIMB-COVID has now resulted in the sequencing of over 675,000 coronavirus genomes – an increasingly critical task as variants like Delta threaten the tenuous prospect of a return to normalcy in much of the world. Read more…

IBM and University of Tokyo Roll Out Quantum System One in Japan

July 27, 2021

IBM and the University of Tokyo today unveiled an IBM Quantum System One as part of the IBM-Japan quantum program announced in 2019. The system is the second IB Read more…

Intel Unveils New Node Names; Sapphire Rapids Is Now an ‘Intel 7’ CPU

July 27, 2021

What's a preeminent chip company to do when its process node technology lags the competition by (roughly) one generation, but outmoded naming conventions make it seem like it's two nodes behind? For Intel, the response was to change how it refers to its nodes with the aim of better reflecting its positioning within the leadership semiconductor manufacturing space. Intel revealed its new node nomenclature, and... Read more…

Will Approximation Drive Post-Moore’s Law HPC Gains?

July 26, 2021

“Hardware-based improvements are going to get more and more difficult,” said Neil Thompson, an innovation scholar at MIT’s Computer Science and Artificial Intelligence Lab (CSAIL). “I think that’s something that this crowd will probably, actually, be already familiar with.” Thompson, speaking... Read more…

With New Owner and New Roadmap, an Independent Omni-Path Is Staging a Comeback

July 23, 2021

Put on a shelf by Intel in 2019, Omni-Path faced a uncertain future, but under new custodian Cornelis Networks, OmniPath is looking to make a comeback as an independent high-performance interconnect solution. A "significant refresh" – called Omni-Path Express – is coming later this year according to the company. Cornelis Networks formed last September as a spinout of Intel's Omni-Path division. Read more…

AMD Chipmaker TSMC to Use AMD Chips for Chipmaking

May 8, 2021

TSMC has tapped AMD to support its major manufacturing and R&D workloads. AMD will provide its Epyc Rome 7702P CPUs – with 64 cores operating at a base cl Read more…

Berkeley Lab Debuts Perlmutter, World’s Fastest AI Supercomputer

May 27, 2021

A ribbon-cutting ceremony held virtually at Berkeley Lab's National Energy Research Scientific Computing Center (NERSC) today marked the official launch of Perlmutter – aka NERSC-9 – the GPU-accelerated supercomputer built by HPE in partnership with Nvidia and AMD. 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 called Dojo to process truly vast amounts of video data. It’s a beast! … A truly useful exaflop at de facto FP32.” Read more…

Google Launches TPU v4 AI Chips

May 20, 2021

Google CEO Sundar Pichai spoke for only one minute and 42 seconds about the company’s latest TPU v4 Tensor Processing Units during his keynote at the Google I Read more…

CentOS Replacement Rocky Linux Is Now in GA and Under Independent Control

June 21, 2021

The Rocky Enterprise Software Foundation (RESF) is announcing the general availability of Rocky Linux, release 8.4, designed as a drop-in replacement for the soon-to-be discontinued CentOS. The GA release is launching six-and-a-half months after Red Hat deprecated its support for the widely popular, free CentOS server operating system. The Rocky Linux development effort... Read more…

Intel Launches 10nm ‘Ice Lake’ Datacenter CPU with Up to 40 Cores

April 6, 2021

The wait is over. Today Intel officially launched its 10nm datacenter CPU, the third-generation Intel Xeon Scalable processor, codenamed Ice Lake. With up to 40 Read more…

Iran Gains HPC Capabilities with Launch of ‘Simorgh’ Supercomputer

May 18, 2021

Iran is said to be developing domestic supercomputing technology to advance the processing of scientific, economic, political and military data, and to strengthen the nation’s position in the age of AI and big data. On Sunday, Iran unveiled the Simorgh supercomputer, which will deliver.... Read more…

10nm, 7nm, 5nm…. Should the Chip Nanometer Metric Be Replaced?

June 1, 2020

The biggest cool factor in server chips is the nanometer. AMD beating Intel to a CPU built on a 7nm process node* – with 5nm and 3nm on the way – has been i Read more…

Leading Solution Providers


Julia Update: Adoption Keeps Climbing; Is It a Python Challenger?

January 13, 2021

The rapid adoption of Julia, the open source, high level programing language with roots at MIT, shows no sign of slowing according to data from Julialang.org. I Read more…

AMD-Xilinx Deal Gains UK, EU Approvals — China’s Decision Still Pending

July 1, 2021

AMD’s planned acquisition of FPGA maker Xilinx is now in the hands of Chinese regulators after needed antitrust approvals for the $35 billion deal were receiv Read more…

GTC21: Nvidia Launches cuQuantum; Dips a Toe in Quantum Computing

April 13, 2021

Yesterday Nvidia officially dipped a toe into quantum computing with the launch of cuQuantum SDK, a development platform for simulating quantum circuits on GPU-accelerated systems. As Nvidia CEO Jensen Huang emphasized in his keynote, Nvidia doesn’t plan to build... Read more…

Microsoft to Provide World’s Most Powerful Weather & Climate Supercomputer for UK’s Met Office

April 22, 2021

More than 14 months ago, the UK government announced plans to invest £1.2 billion ($1.56 billion) into weather and climate supercomputing, including procuremen Read more…

Quantum Roundup: IBM, Rigetti, Phasecraft, Oxford QC, China, and More

July 13, 2021

IBM yesterday announced a proof for a quantum ML algorithm. A week ago, it unveiled a new topology for its quantum processors. Last Friday, the Technical Univer Read more…

Q&A with Jim Keller, CTO of Tenstorrent, and an HPCwire Person to Watch in 2021

April 22, 2021

As part of our HPCwire Person to Watch series, we are happy to present our interview with Jim Keller, president and chief technology officer of Tenstorrent. One of the top chip architects of our time, Keller has had an impactful career. Read more…

Frontier to Meet 20MW Exascale Power Target Set by DARPA in 2008

July 14, 2021

After more than a decade of planning, the United States’ first exascale computer, Frontier, is set to arrive at Oak Ridge National Laboratory (ORNL) later this year. Crossing this “1,000x” horizon required overcoming four major challenges: power demand, reliability, extreme parallelism and data movement. Read more…

Senate Debate on Bill to Remake NSF – the Endless Frontier Act – Begins

May 18, 2021

The U.S. Senate today opened floor debate on the Endless Frontier Act which seeks to remake and expand the National Science Foundation by creating a technology Read more…

  • arrow
  • Click Here for More Headlines
  • arrow