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.
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