Worldwide HPC 2020 Total Market Model and 2021–2025 Forecast: Products and Services

July 28, 2021|Addison Snell, Dan Olds, Paris-Andrel Bridgers

EXECUTIVE SUMMARY

This Intersect360 Research report presents the 2020 total market model and five-year forecast for the overall High Performance Computing (HPC) market,
segmented into product and services categories, including servers, storage, services, software, networks, cloud, and other products. The forecast horizon
is from 2021 through 2025, with compound annual growth rates (CAGRs) using 2020 as a base. Because 2020 was anomalous in many ways due to the COVID-19
pandemic, we also show CAGRs using 2019 as the base year.

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 fell to $38.9 billion in 2020, down 0.2% from 2019, the first year-over-year market decline since 2009, attributable directly
to the economic effects of the global COVID-19 pandemic. The essentially flat market outperformed the 3.7% decline Intersect360 Research had forecasted
for the year.

As expected, the pandemic economy created tremendous short-term disruptions. Servers and software, the two biggest spending categories by revenue, had
the largest year-over-year declines. The storage segment proved resilient and remained flat. Meanwhile, cloud computing underwent eye-popping, 78.8%
growth; on top of an underlying double-digit growth rate, organizations turned to cloud computing to cope with both accelerated projects and deferred
acquisitions.

Coming off the anomalous 2020, there will be a rebound in HPC spending in 2021, as deferred projects begin to get fulfilled, leading to a short-term 16.4%
HPC market gain. In the long run the HPC market will return to steady growth and will exceed $60 billion in 2025, corresponding to a 9.1% CAGR using
the down-year 2020 as a base, or a 7.5% CAGR from 2019. Cloud computing will continue very high growth rates, affecting the rest of the market. The
near-term effects of COVID-19 vary significantly by year and by segment; the methodology is fully described in this report.

TABLE OF CONTENTS

INTRODUCTION 6

What Is HPC? 8

HPC 2020 MARKET PERFORMANCE: PRODUCT CATEGORIES 9

New Segments 10

Market Performance 11

Table 1: Total HPC Market Revenue ($000), 2020 vs. 2019, by Product Category 11

ECONOMIC DYNAMICS OF THE COVID-19 PANDEMIC 12

Figure 1: The Shape of an HPC Recession 14

Figure 2: HPC Revenue ($000) as a Result of 2009 Recession, 2008 – 2013 14

Base Years for Compound Annual Growth Rates: 2019 vs. 2020 15

Table 2: Comparison of Base Years for CAGR Calculations 15

2021–2025 HPC MARKET FORECAST: PRODUCT CATEGORIES 16

Table 3: Total HPC Market Revenue ($000), 2019-20 Actuals, 2021 to 2025 Forecast, by Product Category 17

Table 4: HPC Market Revenue Share, 2019-20 Actuals, 2021 to 2025 Forecast, by Product Category 17

Table 5: Year-over-Year Revenue Change, 2020 Actual, 2021 to 2025 Forecast, by Product Category 18

Figure 3: Total HPC Market Revenue ($000), 2019-20 Actuals, 2021 to 2025 Forecast, by Product Category 18

CONCLUSIONS 19

APPENDIX A: METHODOLOGY 21

COVID-19 22

APPENDIX B: HPC MARKET DYNAMICS MODEL AND FUNDAMENTAL FORECAST ASSUMPTIONS 23

Market Maturity 23

Fundamental Market Dynamics Model 24

Figure A1: Traditional HPC Market Dynamics 25

Fundamental Market Assumptions 26

Fundamental Drivers 26

Fundamental Market Dampeners 27

Model-Based Assumptions 28

Basic Market Drivers 28

Basic Market Dampeners 29

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