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Addison Snell Christopher Willard Ph.D. Worldwide HPC 2019 Total Market Model and 2020–2024 Forecast: Server Classes

EXECUTIVE SUMMARY

This Intersect360 Research report presents the 2019 total market model and five-year forecast for the overall High Performance Computing (HPC) market, segmented into constituent categories: maintenance and repair, systems engineering, systems integration, training, programming, 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.

In 2019, the server segment grew at a lower rate than the larger HPC market, up 2.4% to reach a new historical high. HPC server growth was constrained by the rapid expansion of the HPC cloud market, which continued to blossom with its fifth year of double-digit growth in the last six years. Intersect360 Research surveys also revealed increased adoption of “cloud-like” deployments beyond the HPC cloud segment, such as managed-services contracts, outsourced facilities arrangement, collocation, or other hybrid cloud arrangements, that did not hew to the definition of public cloud computing as presented in the survey.

As a result, HPC server growth was not evenly distributed between classes. Supercomputers had the highest year-over-year growth rate, with growth rates declining through the classes to the lowest in entry-level HPC servers. We attribute this cascade through the segments to HPC cloud drawing more heavily away from the bottom of the market than from the top; that is, smaller systems are more easily displaced by cloud computing than larger systems.

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.

Analysis of the five-year forecast for HPC servers is best separated between long-term growth rates and short-term effects of COVID-19. In the long term, HPC servers will continue to grow at below-market rates, as cloud computing continues to be the highest-growth area in the forecast. We expect the trend from recent years to continue, that growth will be concentrated toward the top of the server classes—highest for supercomputers, lowest for entry-level HPC servers. HPC servers, particularly at the high end of the market, are bolstered by the arrival of the Exascale era.

Spending on HPC servers will decline significantly from 2019 to 2020, as an effect of the COVID-19 recession. The majority of the shortfall will come back as delayed purchases, resulting in an abnormally high 2021. There will continue to be double-digit swings in 2022 and 2023 before the fluctuations settle down in 2024.


TABLE OF CONTENTS 

EXECUTIVE SUMMARY 2

TABLE OF CONTENTS 4

INTRODUCTION 6

What Is HPC? 8

HPC 2019 MARKET PERFORMANCE: SERVER CLASSES 9

Table 1: Total HPC Server Market Revenue ($000), 2019 vs. 2018, by Server Class 10

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: SERVER CLASSES 15

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

Table 3: Year-over-Year Revenue Change, 2020 to 2024 Forecast, by Server Class 17

Figure 3: HPC Server Market Revenue ($000), 2019 Actuals, 2020 to 2024 Forecast, by Server Class 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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