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Addison Snell Christopher G. Willard Ph.D. Worldwide HPC 2019 Total Market Model and 2020–2024 Forecast: Cloud Categories

EXECUTIVE SUMMARY

This Intersect360 Research report presents the cloud segment of the 2019 total market model and five-year forecast for the overall High Performance Computing (HPC) market, segmented into cloud segments: raw cycles, storage, application hosting (SaaS), environment hosting (IaaS, PaaS), and other. The forecast horizon is from 2020 through 2024, with compound annual growth rates (CAGRs) using 2019 as a base.

Intersect360 Research defines HPC as the use of servers, clusters, and supercomputers—plus associated software, tools, components, storage, and services—for scientific, engineering, or analytical tasks that are particularly intensive in computation, memory usage, or data management. Intersect360 Research reports available in this series include the following segmentations:

  • Products and Services: servers, storage, networks, software, service, cloud, other
  • Vertical markets: academia, national security, national research labs, national agencies, state or local governments, bio sciences, chemical engineering, consumer product manufacturing, electronics, energy, financial services, large product manufacturing, media and entertainment, retail, transportation, other
  • Regions: North America, EMEA, Asia-Pacific, Latin America
  • Server class (HPC server revenue): entry-level, midrange, high-end, supercomputer
  • Cloud categories (HPC cloud revenue): raw cycles, cloud storage, application hosting (SaaS), infrastructure hosting (IaaS, PaaS), other
  • Software categories (HPC software revenue): operating environments, developer tools, middleware, storage software, transfer costs, application software, other
  • Services categories (HPC services revenue): maintenance and repair, system engineering, system integration, training, programming services, other
  • HPC server market shares (current year only, not forecast)
  • HPC storage market shares (current year only, not forecast)

Total HPC market revenue reached $39.0 billion in 2019, growing 8.2% over 2018. This was the tenth consecutive year of growth for the HPC market. The 8.2% growth slightly exceeded the 7.2% growth Intersect360 Research had forecasted for the year.

Cloud computing for HPC had its fifth year of double-digit growth in the last six years, up 17.8% from 2018 to exceed $1.4 billion. Even this growth underestimates the full effect of cloud computing in HPC. In 2019, we also saw very high growth in services and in “Other” spending. Investigation of responses in our annual HPC budget survey reveals these both to be driven by arrangements that might be termed “cloud-like”: managed services contracts or other outsourced rental arrangements that do not conform to the definitions of cloud computing. The growth in services and “Other” should be considered to be an extension of the market dynamics around outsourcing.

In 2019, HPC cloud computing growth was concentrated in raw cycles, followed by storage. The relatively lower growth rates in environment hosting and application hosting are related to the above-mentioned trend, in which some growth in utility or outsourcing is expressed in managed services or other “cloud-like” deployments that do not fit the precise definition of cloud computing. These services-led engagements are well-equipped to incorporate value-added functionality of system management or application licensing. This indicative of increasing maturity in the HPC cloud market.

There will be significant disruption to the HPC market as a whole as a result of the COVID-19 pandemic, primarily seen as a market shortfall in 2020, followed by a corresponding spike upward in 2021. While the HPC market will lose $1.2 billion over the forecast period, there is no long-term effect to long-term growth rates, and the HPC market will grow at a 7.1% compound annual growth rate through 2024, to reach $55.0 billion at the end of the forecast period.

The effects of COVID-19 will vary by year and by segment; the methodology is fully described in this report. Cloud computing for HPC will notably experience entirely the opposite effect from the pandemic than most other market segments. As cloud computing picks up the slack from deferred hardware purchases, we forecast cloud computing will have a short-term year-over-year gain in 2020. As purchases swing back on-premise in 2021, the high growth rate of cloud will largely absorb the transition, and cloud will be relatively flat into 2022, before experiencing an upward bump again in 2023 and returning to stable growth in 2024.

We forecast all cloud categories will experience double-digit growth over the five-year forecast, without significant differences between the compound annual growth rates (CAGRs) by segment.


TABLE OF CONTENTS 

EXECUTIVE SUMMARY 2

TABLE OF CONTENTS 4

INTRODUCTION 6

What Is HPC? 8

HPC 2019 MARKET PERFORMANCE: CLOUD CATEGORIES 9

Table 1: Total HPC Cloud Market Revenue ($000), 2019 vs. 2018, by Cloud Category 9

COVID-19 PANDEMIC FORECAST ADJUSTMENTS 11

Figure 1: The Shape of an HPC Recession 13

Figure 2: HPC Revenue ($000) as a Result of 2009 Recession, 2008 – 2013 14

2019–2024 HPC MARKET FORECAST: CLOUD CATEGORIES 15

Table 2: Total HPC Cloud Market Revenue ($000), 2019 Actuals, 2020 to 2024 Forecast, by Cloud Category 16

Table 3: Year-over-Year Revenue Change, 2020 to 2024 Forecast, by Cloud Category 17

Figure 3: HPC Cloud Market Revenue ($000), 2019 Actuals, 2020 to 2024 Forecast, by Cloud Category 17

CONCLUSIONS 18

APPENDIX A: METHODOLOGY 20

COVID-19 21

APPENDIX B: HPC MARKET DYNAMICS MODEL AND FUNDAMENTAL FORECAST ASSUMPTIONS 22

Market Maturity 22

Fundamental Market Dynamics Model 23

Figure A1: Traditional HPC Market Dynamics 24

Fundamental Market Assumptions 25

Fundamental Drivers 25

Fundamental Market Dampeners 26

Model-Based Assumptions 27

Basic Market Drivers 27

Basic Market Dampeners 28


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