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

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: system software, middleware, developer tools, storage management software, licensed application software, transfer costs for internal software, 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 software segment grew at the same rate as the larger HPC market, up 8.2% to reach $9.2 billion, exceeding $9 billion for the first time. The growth was not evenly distributed between segments. System software is the only category that declined year-over-year, which is consistent with top-level segmentation numbers, in which HPC servers were the product segment with the lowest growth rate. Meanwhile, transfer costs had the highest year-over-year growth rate of any specified segment, at 25.3%. Even more noteworthy is the fact that the “other” software category—normally a catchall for unforeseen incidental expenditures—suddenly spiked to over $300 million, from a low base.

Such sudden growth, particularly in an “Other” category, seems anomalous, and we do not report it lightly. This trend was reported across multiple surveys, and further investigation—including interviews, qualitative survey comments, and supplier feedback—all pointed to a real trend, that this spurt was due to increased adoption of cloud-like deployments, 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. In the case of software, it can represent software-as-a-service (SaaS) deployments, in which computing resources or infrastructure are essentially paid for out of a software budget.

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. Overall, the software segment of the HPC market will grow slightly slower than market rates over the five-year forecast period. System software will have a low growth rate among the software categories, continuing the trend from 2019. Growth in software spending is constrained by industry trends to incorporate more open-source or in-house software as a replacement for licensed, ISV software.

 


TABLE OF CONTENTS 

 

EXECUTIVE SUMMARY 2

TABLE OF CONTENTS 4

INTRODUCTION 6

What Is HPC? 8

HPC 2019 MARKET PERFORMANCE: SOFTWARE CATEGORIES 9

Table 1: Total HPC Software Market Revenue ($000), 2019 vs. 2018, by Software 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: SOFTWARE CATEGORIES 15

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

Table 3: Year-over-Year Revenue Change, 2020 to 2024 Forecast, by Software Category 16

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