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

August 21, 2020|Addison Snell, Christopher G. Willard Ph.D.

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 geographic regions: North America (U.S. and Canada), EMEA (Europe, Middle East, and Africa), Asia-Pacific, and Latin America. 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.

There was only slight variability between regions. Growth continues to be higher outside of North America, the largest region by revenue. North America
now represents less than half of worldwide HPC spending. The highest year-over-year growth rate was seen in Asia-Pacific, which we viewed as being
strong region-wide, including noteworthy gains in China and Japan.

There will be significant disruption to the HPC market 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. The most stable region will be Asia-Pacific,
where projects in China and Japan could prevent year-over-year loss for 2020. Other segments may see a significant shortfall in 2020, followed by a
spike in 2021.

TABLE OF CONTENTS

EXECUTIVE SUMMARY 2

TABLE OF CONTENTS 4

INTRODUCTION 6

What Is HPC? 7

HPC 2019 MARKET PERFORMANCE: REGIONS 9

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

COVID-19 PANDEMIC FORECAST ADJUSTMENTS 10

Figure 1: The Shape of an HPC Recession 12

Figure 2: HPC Revenue ($000) as a Result of 2009 Recession, 2008 – 2013 13

2019–2024 HPC MARKET FORECAST: REGIONS 14

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

Table 3: Year-over-Year Revenue Change, 2020 to 2024 Forecast, by Geographic Region 16

Figure 3: Total HPC Market Revenue ($000), 2019 Actuals, 2020 to 2024 Forecast, by Geographic Region 17

CONCLUSIONS 18

APPENDIX A: METHODOLOGY 19

COVID-19 20

APPENDIX B: HPC MARKET DYNAMICS MODEL AND FUNDAMENTAL FORECAST ASSUMPTIONS 21

Market Maturity 21

Fundamental Market Dynamics Model 22

Figure A1: Traditional HPC Market Dynamics 23

Fundamental Market Assumptions 24

Fundamental Drivers 24

Fundamental Market Dampeners 25

Model-Based Assumptions 26

Basic Market Drivers 26

Basic Market Dampeners 27

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