Intersect360 Report: HPC Market Rebounding and on Track to Reach $60B in 2025

By John Russell

June 23, 2021

Despite the turmoil and uncertainty spurred by the pandemic, the broad HPC market finished 2020 at $38.9 billion in revenue, down just 0.2 percent from 2019. What’s more, HPC has returned to its growth track and is projected to reach $60 billion in 2025. While several HPC sectors slowed, surging government spending to fight the pandemic and ongoing supercomputer market strength helped prevent an HPC freefall. Notworthy, HPC-related cloud spending soared 78.8 percent and HPC storage nudged up slightly.

These are the key bullets presented by Intersect360 Research yesterday in a webinar to update the HPC market 2020 performance and outlook leading into next week’s ISC2021 conference. Not surprisingly, HPC market analysts have been hard-pressed to accurately forecast results during the pandemic. The essentially flat year – a pleasant surprise to many – follows Intersect360’s forecast of a 3.7 percent decline made in July. The slight overall worldwide HPC decline was the first since the 2009 recession.

Intersect360 co-founder and CEO Addison Snell said, “In my career as an analyst in this space, this is the most complicated market sizing exercise we’ve ever been through. And that is directly because of the COVID-19 pandemic which has effects this year [and] it has lingering effects into next year. There’s been a lot of work that’s gone into this both on the demand side with surveys on the supply side with analysis.”

Before digging into his talk, which reviewed many of the nuanced and conflicting forces at work in the HPC landscape, here are two of slides that capture the key messages.

A video of Snell’s talk, delivered with Intersect360’s chief research officer, Dan Olds, is available for watching on the Intersect360 Research website.

In brief, the lower end of the HPC market was hurt most last year, in part caused by the swing of business to the cloud which is the big winner in terms of structural market change. The academic (down 5.2 percent) and commercial sector (down 3.3 percent) took hits. Big systems spending – driven by exascale and pandemic-related spending – drove much of the market and dragged along storage which was resilient. AI, beyond being blended into those efforts, was less of a distinct factor.

The regional HPC picture was interesting. China/Asia-Pacific rebounded fastest from the pandemic and was up 7.9 percent, driven by both China’s economic rebound and spending on Japan’s Fugaku system (~$500-plus million). North America was down 3.2 percent and EMEA down 1.7 percent. The outlook for vertical markets is shown below.

To a significant extent, said Snell, the current downturn and expected rebound looks a lot what happened during that recession (2009).

““In year one, the recession comes in the market dips due to some projects canceling, but to a larger extent in HPC, due to delays in purchasing. What happens with the delayed purchases is that in year two you capture the sales that you would have had in year two, and also things that got delayed from year one,” said Snell. “Plus [because] some of the delays from year one that went into years two, year three and four you can have a little bit of extra wiggle. By the fifth year, you kind of get back to life as normal. A fundamental underlying premise of this is that HPC is a long sales cycle item.”

To accommodate the changing dynamics Interect360 issued a six-year forecast instead of the usual five, allowing it to smooth out the wiggles as the market returns to normal.

“We’re assuming right now, [that] most global economic activity is going to be pretty normal by the end of 2021. And we’re assuming that microprocessor shortages are not going to be as significant damper on the supply side of the HPC market within 2021. But we are continuing to monitor that and acknowledge that that is a significant risk. If that becomes a risk that we think are going to affect the server numbers for 2021, we will be back in touch with everyone by the end of the year,” said Snell, who also acknowledged continuing difficult-to-predict pandemic issues such as India’s ongoing pandemic surge.

Snell expects the market recover to ~ $60 billion in 2025 and that cloud segment will continue to grow at more than a 20 percent CAGR and hit $7 billion. Interestingly, Snell suggested the AI segment may begin splitting. AI adoption, of course, is a major dynamic in today’s server and software markets throughout all of computing.

“AI has been supporting the both the growth of HPC and cloud, and is something where people who have AI as part of their HPC budgets are seeing growth in those HPC budgets as a direct result of AI. And that budget effect is modeled into the near-term forecasts on the underlying growth rate in the long term. By the end of this forecast period, we could start to see a divergence of AI from HPC. Not that AI and machine learning won’t continue to have an effect within HPC. But we’re already seeing multiple users who are thinking of AI as being something truly different from HPC. And the types of configurations they want for them are going to be more different in the long term.”

Looking at how HPC server and storage vendors fared, Intersect360 reported little overall change.

Year over year, HPE and Dell both declined in proportion to the market, according to Intersect360, with Dell down slightly more than HPE. “But they are still the number one and number two vendors in the market and still represent about 60 percent of the market together overall, so not a big change in leadership,” said Snell.

Perhaps more interesting was the double-digit growth reported by Intersect360 for Atos and Inspur. “Inspur, in particular, is riding the wave of China doing well and this is the second consecutive year for double digit growth for Atos,” said Snell. IBM’s HPC server share “has been plummeting, due to just a shift in focus away from HPC with their Power [products].”

Intersect360 has pulled Supermicro out of the other category and now ranks it seventh on the HPC vendor share list. That understates its actual position said Snell, “[Identifying] Supermicro’s share gets complicated because less than half of its revenue for HPC comes from direct sales. It does a considerable amount of OEM business, and also through just reseller partners. So the Supermicro number you see here is their direct sales number that is less than half of their true revenue.” Broadly, HPC server sales were down ~7 percent.

The storage market was resilient, said Snell, “We did have some rearrangement of shares. EMC had a slight decrease, but it’s still a comfortable number one. HPE was flat [and] NetApp had slight growth, enough to overtake HPE to get back into the number two revenue share position that they had held previously.”

The big winners were DDN, Atos and Fujitsu which all experienced double-digit growth for the second consecutive year. “[It’s] really a triple win for DDN because of sales through Fujitsu (as part of Fugaku). Most intriguing here is Intel, which is really established now as a storage vendor with Optane and their DAOS products which are sold directly by Intel,” said Snell.

He emphasized that when Intersect360 presents HPC storage, “It’s a lot bigger than storage that is designed specifically for HPC with a parallel file system and other features you expect in high-end storage. There’s a lot of enterprise storage that gets purchased as part of HPC budgets. We presented that in our previous HPC technology survey and HPC budget map surveys, looking at how storage gets purchased, what proportion of the time it’s an enterprise purchase that’s driven from higher up in the organization just gets assigned and billed to the HPC budget.”

That’s what drives EMC and NetApp to the high positions that they’re in, Snell said. “There’s a lot more than just, say, Isilon. Dell’s number one position in HPC storage is really going to be from products like PowerVault, which are definitely targeting HPC, or a lot of all-flash products from both EMC and NetApp. There’s high usage in HPC for all of those things.”

Snell also noted that IBM’s storage business has been resilient. “It is down year over year, just because the server business for IBM did so poorly, they’re not getting any of that carry through. [However] IBM is going to be selling more of its Spectrum Scale storage through partnerships, for example, through HPE. IBM’s [overall HPC] share is going to continue to decline as long as their direct sales force is not focusing on HPC but their storage products, their software products, and their services are stronger in HPC than the server business overall. Lenovo is right in there still showing slight growth.”

Snell’s presentation coverage included far more detail around vertical markets, a few key technology trends (e.g. processor diversity), and economic modeling issues in uncertain times such as now.

Watch the video here.

Link to the latest Intersect360 Research presentations: http://www.intersect360.com/presentations

Subscribe to HPCwire's Weekly Update!

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

Google Announces Sixth-generation AI Chip, a TPU Called Trillium

May 17, 2024

On Tuesday May 14th, Google announced its sixth-generation TPU (tensor processing unit) called Trillium.  The chip, essentially a TPU v6, is the company's latest weapon in the AI battle with GPU maker Nvidia and clou Read more…

ISC 2024 Student Cluster Competition

May 16, 2024

The 2024 ISC 2024 competition welcomed 19 virtual (remote) and eight in-person teams. The in-person teams participated in the conference venue and, while the virtual teams competed using the Bridges-2 supercomputers at t Read more…

Grace Hopper Gets Busy with Science 

May 16, 2024

Nvidia’s new Grace Hopper Superchip (GH200) processor has landed in nine new worldwide systems. The GH200 is a recently announced chip from Nvidia that eliminates the PCI bus from the CPU/GPU communications pathway.  Read more…

Europe’s Race towards Quantum-HPC Integration and Quantum Advantage

May 16, 2024

What an interesting panel, Quantum Advantage — Where are We and What is Needed? While the panelists looked slightly weary — their’s was, after all, one of the last panels at ISC 2024 — the discussion was fascinat Read more…

The Future of AI in Science

May 15, 2024

AI is one of the most transformative and valuable scientific tools ever developed. By harnessing vast amounts of data and computational power, AI systems can uncover patterns, generate insights, and make predictions that Read more…

Some Reasons Why Aurora Didn’t Take First Place in the Top500 List

May 15, 2024

The makers of the Aurora supercomputer, which is housed at the Argonne National Laboratory, gave some reasons why the system didn't make the top spot on the Top500 list of the fastest supercomputers in the world. At s Read more…

Google Announces Sixth-generation AI Chip, a TPU Called Trillium

May 17, 2024

On Tuesday May 14th, Google announced its sixth-generation TPU (tensor processing unit) called Trillium.  The chip, essentially a TPU v6, is the company's l Read more…

Europe’s Race towards Quantum-HPC Integration and Quantum Advantage

May 16, 2024

What an interesting panel, Quantum Advantage — Where are We and What is Needed? While the panelists looked slightly weary — their’s was, after all, one of Read more…

The Future of AI in Science

May 15, 2024

AI is one of the most transformative and valuable scientific tools ever developed. By harnessing vast amounts of data and computational power, AI systems can un Read more…

Some Reasons Why Aurora Didn’t Take First Place in the Top500 List

May 15, 2024

The makers of the Aurora supercomputer, which is housed at the Argonne National Laboratory, gave some reasons why the system didn't make the top spot on the Top Read more…

ISC 2024 Keynote: High-precision Computing Will Be a Foundation for AI Models

May 15, 2024

Some scientific computing applications cannot sacrifice accuracy and will always require high-precision computing. Therefore, conventional high-performance c Read more…

Shutterstock 493860193

Linux Foundation Announces the Launch of the High-Performance Software Foundation

May 14, 2024

The Linux Foundation, the nonprofit organization enabling mass innovation through open source, is excited to announce the launch of the High-Performance Softw Read more…

ISC 2024: Hyperion Research Predicts HPC Market Rebound after Flat 2023

May 13, 2024

First, the top line: the overall HPC market was flat in 2023 at roughly $37 billion, bogged down by supply chain issues and slowed acceptance of some larger sys Read more…

Top 500: Aurora Breaks into Exascale, but Can’t Get to the Frontier of HPC

May 13, 2024

The 63rd installment of the TOP500 list is available today in coordination with the kickoff of ISC 2024 in Hamburg, Germany. Once again, the Frontier system at Read more…

Synopsys Eats Ansys: Does HPC Get Indigestion?

February 8, 2024

Recently, it was announced that Synopsys is buying HPC tool developer Ansys. Started in Pittsburgh, Pa., in 1970 as Swanson Analysis Systems, Inc. (SASI) by John Swanson (and eventually renamed), Ansys serves the CAE (Computer Aided Engineering)/multiphysics engineering simulation market. Read more…

Nvidia H100: Are 550,000 GPUs Enough for This Year?

August 17, 2023

The GPU Squeeze continues to place a premium on Nvidia H100 GPUs. In a recent Financial Times article, Nvidia reports that it expects to ship 550,000 of its lat Read more…

Comparing NVIDIA A100 and NVIDIA L40S: Which GPU is Ideal for AI and Graphics-Intensive Workloads?

October 30, 2023

With long lead times for the NVIDIA H100 and A100 GPUs, many organizations are looking at the new NVIDIA L40S GPU, which it’s a new GPU optimized for AI and g Read more…

Choosing the Right GPU for LLM Inference and Training

December 11, 2023

Accelerating the training and inference processes of deep learning models is crucial for unleashing their true potential and NVIDIA GPUs have emerged as a game- Read more…

Shutterstock 1606064203

Meta’s Zuckerberg Puts Its AI Future in the Hands of 600,000 GPUs

January 25, 2024

In under two minutes, Meta's CEO, Mark Zuckerberg, laid out the company's AI plans, which included a plan to build an artificial intelligence system with the eq Read more…

AMD MI3000A

How AMD May Get Across the CUDA Moat

October 5, 2023

When discussing GenAI, the term "GPU" almost always enters the conversation and the topic often moves toward performance and access. Interestingly, the word "GPU" is assumed to mean "Nvidia" products. (As an aside, the popular Nvidia hardware used in GenAI are not technically... Read more…

Nvidia’s New Blackwell GPU Can Train AI Models with Trillions of Parameters

March 18, 2024

Nvidia's latest and fastest GPU, codenamed Blackwell, is here and will underpin the company's AI plans this year. The chip offers performance improvements from Read more…

Some Reasons Why Aurora Didn’t Take First Place in the Top500 List

May 15, 2024

The makers of the Aurora supercomputer, which is housed at the Argonne National Laboratory, gave some reasons why the system didn't make the top spot on the Top Read more…

Leading Solution Providers

Contributors

Eyes on the Quantum Prize – D-Wave Says its Time is Now

January 30, 2024

Early quantum computing pioneer D-Wave again asserted – that at least for D-Wave – the commercial quantum era has begun. Speaking at its first in-person Ana Read more…

Shutterstock 1285747942

AMD’s Horsepower-packed MI300X GPU Beats Nvidia’s Upcoming H200

December 7, 2023

AMD and Nvidia are locked in an AI performance battle – much like the gaming GPU performance clash the companies have waged for decades. AMD has claimed it Read more…

The GenAI Datacenter Squeeze Is Here

February 1, 2024

The immediate effect of the GenAI GPU Squeeze was to reduce availability, either direct purchase or cloud access, increase cost, and push demand through the roof. A secondary issue has been developing over the last several years. Even though your organization secured several racks... Read more…

Intel Plans Falcon Shores 2 GPU Supercomputing Chip for 2026  

August 8, 2023

Intel is planning to onboard a new version of the Falcon Shores chip in 2026, which is code-named Falcon Shores 2. The new product was announced by CEO Pat Gel Read more…

The NASA Black Hole Plunge

May 7, 2024

We have all thought about it. No one has done it, but now, thanks to HPC, we see what it looks like. Hold on to your feet because NASA has released videos of wh Read more…

GenAI Having Major Impact on Data Culture, Survey Says

February 21, 2024

While 2023 was the year of GenAI, the adoption rates for GenAI did not match expectations. Most organizations are continuing to invest in GenAI but are yet to Read more…

How the Chip Industry is Helping a Battery Company

May 8, 2024

Chip companies, once seen as engineering pure plays, are now at the center of geopolitical intrigue. Chip manufacturing firms, especially TSMC and Intel, have b Read more…

Q&A with Nvidia’s Chief of DGX Systems on the DGX-GB200 Rack-scale System

March 27, 2024

Pictures of Nvidia's new flagship mega-server, the DGX GB200, on the GTC show floor got favorable reactions on social media for the sheer amount of computing po Read more…

  • arrow
  • Click Here for More Headlines
  • arrow
HPCwire