First Decline in Ten Years

SUNNYVALE, CA—July 28, 2020—HPC and hyperscale analyst firm Intersect360 Research has released its worldwide
HPC market model and forecast, pegging the size of the industry at $39 billion in 2019, a jump of 8.2% from 2018. The forecast predicts “significant
disruption” to the HPC market in the short term as a result of the COVID-19 pandemic, primarily seen as a 3.7% market shortfall in 2020, followed by
a corresponding spike upward in 2021.

In spite of the 2020 dip, its first in ten years, 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.

“In forecasting the effects of the pandemic, we’re not operating in a vacuum,” says Intersect360 Research CEO Addison Snell. “We’ve seen recessions before,
and we’ve seen supply chain disruptions, such as what happened with the horrible floods in Southeast Asia in 2011, and the resulting effect on the
storage market. The market is about to take a very strange shape. 2020 will be down significantly, but most of this shortfall is from purchases that
are delayed, not canceled. So long as the economy comes back in 2021, we’ll see a big spike as those delayed HPC purchases get realized.”

The HPC market is covered in depth in a series of four reports released by Intersect360 Research this week, which analyze not only the effects of COVID-19
on the market in 2020, but also emerging trends and the state of the industry at the end of 2019:

Worldwide HPC 2019 Total Market Model and 2020–2024 Forecast: Products and Services

Worldwide HPC 2019 Total Market Model and 2020–2024 Forecast: Vertical Markets

Worldwide HPC 2019 Total Market Model: Server Revenue Shares

Worldwide HPC 2019 Total Market Model: Storage Revenue Shares

“We saw the shape of the market really start to change in 2019,” says Snell. “All segments were up, but the real growth was in cloud computing, plus other
arrangements you could describe as cloud-like, such as managed services contracts, outsourced facilities, and other forms of HPC as a service.”

According to the reports, after six years of the industrial sector driving HPC market, government spending is back at the forefront of HPC growth. Snell
predicts, “This will be the most stable sector over the next five years. Many austerity measures have been relaxed, and government spending has come
back up. There’s a big push to AI, of course, as well as mustering resources to combat COVID-19. Beyond that, the race to Exascale continues to add
energy into supercomputing.”

Snell points out that the cloud segment is an area of significant opportunity. “Cloud computing is the segment that will do the opposite of everything
else. When on-premise server and storage purchases are delayed, cloud computing can help bridge the gap. There will be a big spike in cloud computing
for HPC this year, as other forms of acquisitions are constrained.”

Addison Snell will present Intersect360 Research’s HPC market forecast, findings and guidance at a free webinar Thursday, August 6 at noon Eastern Time/11
am Central/10 am Mountain/ 9 am Pacific. Registration is at



About Intersect360 Research

Intersect360 Research is a market intelligence, research, and consulting advisory practice focused on high-performance data center trends, including High
Performance Computing (HPC), artificial intelligence (AI) and machine learning, cloud computing, big data, and hyperscale. Intersect360 Research utilizes
both user-based and supplier-based research to form a complete perspective of market dynamics, trends, and usage models, including both technical and
business applications. The company’s end-user-focused research is inclusive from both a technology perspective and a usage standpoint, allowing Intersect360
Research to provide its clients with total market models that include both traditional and emerging HPC applications.

In addition to its market advisory subscription services, Intersect360 Research offers customers an array of client-specific services, including custom
surveys, white papers and custom analysis. More information about Intersect360 Research as well as the full slate of Intersect360 Research reports
available for purchase and download can be found at


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