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Addison Snell Debra Goldfarb Christopher G. Willard Ph.D. Erin Diaz HPC Supplier Views: 2007 Market Review March 2008

This Tabor Research report presents our final 2006 and 2007 server revenue estimates for the traditional High Productivity Computing (tHPC) market. Tabor Research estimates that the Traditional HPC server market was approximately $7.1 billion in 2006 and grew to $7.9 billion in 2007. The year over year growth in revenue from 2006 to 2007 was 11.5%.

Key findings from the study include:

  • The Supercomputer segment represents a respectable 16.7% of the HPC market. The remaining three segments are very evenly split with High-End systems at 28.0%of revenue, Mid-Range at 27.5%, and Entry-Level at 27.7% HPC segments.
  • IBM and HP led traditional HPC sales in both 2006 and 2007 each capturing about a third of the market.
  • In 2007, HPC sales to North America led the way with 51.8% of the market, followed by EMEA, Asia-Pacific, and Latin America.
  • The largest portion of sales in economic sectors went to Commerce/Industry at about 45.0% of the market, followed by Government with 33.7% and Academia with 21.3%.
  • This report follows-up on our preliminary market estimates released in January1 of this year. Overall, our initial estimates were high by about $7.7 million, or about 0.1%.

At $7.9 billion, the traditional HPC market represents between 15% and 16% of the total server market. We believe that this value is at the high end of the historic range for the technical server share of the overall server market. However, based on strong market fundamentals, we believe that the traditional HPC market will be able to maintain and possibly grow this share going forward.

Growth will be driven by a combination of continued market expansion into industrial sectors, growth of new markets across geographies, and continued expansion of requirements within existing markets. That said, a number of factors should be carefully watched, including: saturation dynamics, particularly in lower end markets which would slow growth; potential limits to improvements in application-level price/performance, which could place limits on requirements-driven growth; and the dynamics of “good enough” replacement technology. In all cases, the ability and willingness of organizations to increase spending on research and development tools must be considered as a macroeconomic limiting factor to the HPC market.

1Tabor Research, InterSect360 Market Advisory Service: HPC Supplier Views, “Preliminary 2007 Market Review”, January 2008.

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