Site Budget Allocation Map August 2007

EXECUTIVE SUMMARY

Tabor Research surveyed the High Productivity Computing user community to complete its first Site
Budget Allocation Map, a look at how HPC users divide and spend their HPC budgets. We surveyed users
on their spending in seven top-level categories: hardware, software, facilities, staffing, services, utility
computing, and other. Each category was further divided into constituent subcategories, resulting in 25
unique items included in the analysis. This report contains the key data, along with analysis, conclusions,
and guidance.

We analyzed the data to produce industry averages, and we also explored how the data varied by sector and
by total budget size. When users reported that funding for items came from other budgets, we modeled the
impacts on total market size and on the spending averages. We analyzed the budget size data together with
the percentages to create averages weighted for the responding user set.

The average HPC site spent about half (48%) of its HPC budget on hardware. Software spending was only
16% on average, but it was much higher among commercial users, who indicated that third-party
applications were a significant cost factor. Facilities costs were frequently cited as “not in budget,”
meaning that those costs were subsumed into higher-level budgets not specific to HPC.

Analysis of the subcategory spending showed that servers account for only about one-third of the total HPC
budget; however, none of the other 24 individual items was above 10%. Software and staffing costs were
well-distributed within their categories, and of the respondents who provided non-zero itemizations in for
software and staffing, 36% spent more money on internal applications programmers than they did on thirdparty
application software.

The conclusions from the study are as follows:

  1. Server sales account for only a portion of the total HPC market. The total HPC market
    (including all HPC products and services) is 2.5 to 3 times the total amount of HPC server
    revenue. Additionally, users spend approximately a quarter of their HPC budgets on staffing
    and another 12% on facilities.
  2. Facilities costs (including floor space, power consumption, and cooling) did not account for as
    high a share of total budget as we expected from discussing facilities issues with users.
    However, facilities costs are often a discontinuous function. Once the capacity of an existing
    facility is reached, major capital investments may be required. These expenses are often borne
    by the larger organization, but require major efforts by the computer center management team
    to justify and compete for the funding. Therefore, facilities costs can be a significant constraint to system acquisition regardless of whether the cost itemizations show up in HPC
    budgets.
  3. Third-party application costs are a significant issue, but this issue is primarily found among
    commercial sites. This is the most important distinction between the academic, commercial,
    and government sectors.

Based on the data and analysis in this report, Tabor Research urges vendors to pursue market strategies
based on total cost of ownership (TCO), but not to neglect the server as the dominant cost factor. Average
spending is spread across many categories and users were highly variable in their responses. Vendors must
be nimble in responding to individual users’ concerns about costs.

Clear