Eurozone Crisis, Thailand Flooding Dampen Revenues in High-Growth Industry


SUNNYVALE, CA—December 29, 2011—The High Performance Computing (HPC) industry will fall short of the 9.2% year-over-year revenue
growth originally forecast for 2011, according to Intersect360 Research in its newest published report. The primary causes for the revised expectations
are the Eurozone crisis, which is causing a slowdown in government and academic spending in that region, and the Thailand flooding, which has caused
a disruption in the supply chain for disk drives.

The HPC industry reached $25.6 billion at the end of 2010, a 22% rebound from the recession in 2009. Intersect360 Research expects growth to continue,
but 2011 will be below the average five-year growth rate, not above it as previously forecast.

 “We don’t predict floods or major international macroeconomic shifts as part of our forecast methodology, but these do wind up having a real impact
on the market,” said Addison Snell, CEO of Intersect360 Research. “In 2011 we saw enough market dampers that we are compelled to lower our year-end

The reduction in growth is supported by Intersect360 Research survey data on end-user budget expectations, which are at the lowest levels in five years.
Respondents in academia and government are projecting lower budget growth than in previous years.

“Commercial markets worldwide so far appear to be stable, but the restricted spending in government and academia seems to have spread from the U.S. to
Europe,” said Chris Willard, Chief Research Officer. “Asia will be an increasing percentage of the market in 2011 and 2012.”

In its HPC market model and forecast, Intersect360 Research provides guidance for both High Performance Technical Computing (HPTC) applications in science
and engineering and High Performance Business Computing (HPBC) applications in nonscientific business areas such as financial services, logistics,
online games, and insurance. The product and services revenues include servers, storage, networks, software, and services such as cloud computing.

In the report, Intersect360 Research emphasizes that its analysis is preliminary, pending further survey analysis and the release of vendors’ revenue numbers
from the final calendar quarter. In early 2012 the company will release a complete year-end 2011 HPC total market model and updated five-year forecast
through 2016.

About Intersect360 Research

Intersect360 Research is a market intelligence, research, and consulting advisory practice focused on suppliers, users, and policymakers across the High
Performance Computing ecosystem. Intersect360 Research relies on both user-based and supplier-based research to form a complete perspective of HPC
market dynamics, trends, and usage models, including both technical and business applications.

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