Perhaps the most interesting slide at Hyperion Research’s annual ISC breakfast HPC market update was one without numbers, presented by research director Mark Nossokoff. He called it “Not Your Father’s HPC.” Just what constitutes HPC is hard to pin down these days. Shifting technology (chip/system diversity) and applications, geopolitical trade restraints, pandemic aftershocks, the wobbly world economy, and other challenges paint a confusing, blurred portrait of what once was traditional HPC.

Nossokoff’s slide made the point well. There were plenty of numbers from Hyperion, but to a significant extent they were expected numbers. The broader change is the face of HPC itself.

Weighing in at roughly 100 slides, delivered in about 60 minutes, the latest Hyperion update covers a lot of ground. Fortunately, Hyperion made the slides available. To some extent the top line numbers – the meat of the update – weren’t surprising. Hyperion CEO Earl Joseph provided the overview. HPC revenue grew slightly in 2022 and is expected to grow again in 2023, but the scale of that growth is not precisely clear. “AI-infused everything” is the loudest and broadest mantra. Cloud-based HPC continues to expand. Presented here are a handful of Hyperion’s slides and a few comments from Hyperion analysts.

“We finished our numbers a couple of weeks ago for 2022 and it turned out: the market actually did grow. We were concerned throughout the year with all the supply chain issues, [and] the economic impacts [of that]. It did not grow at the rate we were hoping (6-7%) for but we saw roughly 4% growth. This chart shows the entire market that we’re currently tracking, which includes the on premises servers, storage, newer application services, in addition to the spending to run HPC workloads from the cloud,” said Joseph.

Joseph suggested some of the expected 2022 sales have slipped to 2023. That said, the supercomputer segment which was “small portion of the market” 8-10 years has become a key driver, boosted by global exascale and larger system sales generally, and remains strong. Hyperion is forecasting global HPC spending to hit about $33 billion (on premise) in 2023 and to reach ~$52 billion (including spending on cloud HPC) in 2026.

Looking ahead, Joseph singled out ten 2023 predictions. Here are his top five:

• Strong growth in the leadership-class segment will support modest growth across the global on- premises HPC market. “We’re expecting the strong leadership class machines to continue to support some modest growth across the top of the market,” per Joseph.
• The advanced computing sector and its associated supply chain will become increasingly driven by national and regional government policies that stress domestic capabilities. “Nations around the world want to develop their own internal domestic capabilities, their own domestic supply chain, and we’re expecting some very interesting announcements this year in that area,” per Joseph.
• Sustainability and energy efficiency considerations will become a dominant factor in many procurements. “Power consumption requirements have gone from maybe 10 to 12 on the priority list to being right up next to price and performance. That literally has happened just in a couple of years. [Inflation and] the cost of energy added to that. There’s also large concern with all the AI models. AI has tremendous promise but the energy requirements to run very large AI models on a frequent basis is quite high,” per Joseph.
• Cloud utilization will shift towards production workloads leading to initial erosion of on-premises spending in low end of the market.
• 2023 will be the year of AI regulation. “We expect to see serious AI regulations primarily in the Europe in the US,” per Joseph.

Rounding out Hyperion’s top ten predictions were other interesting ideas: HPC architectures will bifurcate between systems optimized for specific applications and those for many applications, thinks Hyperion. Divergent requirements will push architecture focal points from compute to interconnect and storage. Interest in HPC-at-the edge will rise but not be matched by a spending jump, said Hyperion. HPC talent – though precisely what that means these days is less clear – remains scarce.

AI (number six on the hit list), of course, will continue its race throughout all of computing. Joseph noted, “ChatGPT put a spotlight on the world of what AI can do. We’re talking to a large number of users, buyers and providers with different ideas of how AI could see use.” Hyperion is forecasting AI to grow 22.7% (CAGR) over the next five years.

There wasn’t a significant change in the HPC server vendor rankings. “HPE and Dell continue to be the market leaders right now. Lenovo has had a very strong year and Inspur is doing well,” said Joseph.

Shown below are some of Hyperion forecast numbers. Hyperion is forecasting on-prem server sales for 2023 to reach around $17 billion, which would be a new high.

Perhaps predictably, cloud-based HPC continues to grow rapidly. “When we talk about our cloud forecasts and cloud spending, we are referring to what users are paying to access HPC resources in the cloud. We are not covering and projecting what the CSPs are investing to deliver those cloud resources,” said Nossokoff.

He said there’s a large growth area in the entry level of the HPC market, adding that “whereas in the past, we had seen cloud spending being largely incremental to on premises spending, we are seeing, especially at the low end of the HPC market, some shifting of dollars from what had been spent on premises is now being spent in the cloud. The cloud is growing about almost three times faster the on premises rate.”

“Drilling down a little bit into the cloud resources, we’re seeing roughly two thirds of HPC cloud spending is on compute. Roughly a third or a little less on storage, and the balance on software licenses and other areas. Within the compute, there’s a good split between the accelerated versus non-accelerated and spot versus reserved instances. This segmentation is based on runtime; it’s not based on dollar spend. I think if we looked at this on $1 perspective, the for example, the accelerated the accelerated slice would be much, much greater,” said Nossokoff.

Nossokoff’s brief foray into the emerging DPU/IPU (data/infrastructure processing unit) market was interesting, as was his brief look at composability trend. The latter is the idea of software defined infrastructure based on pools of similar resources (storage, accelerators, etc.). Nossokoff’s comments suggest these areas bear watching.

“There’s been lot of activity in the DPU area, the data processing units. A little more than a year ago, AMD acquired Pensando. Microsoft relatively recently picked up the assets of Fungible. Nvidia continues its roadmap and investment in the Bluefield, GPU. Intel is offering their IPU and there are other [offerings] and startups out there as well,” noted Nossokoff.

There was far too much material in Hyperion’s presentation to cover in a short article. It’s best to check the Hyperion website for the full slide deck and access to recorded presentations.

Link to Hyperion ISC23 breakfast presentation slides: https://hyperionresearch.com/wp-content/uploads/2023/05/Hyperion-Research-ISC23-HPC-Market-Update-Breakfast-Briefing_May-23-2023.pdf

Slides: Courtesy of Hyperion Research

BONUS EMEA-SPECIFIC SLIDES