ACADEMIA

Factory revenue for the high performance computing (HPC) technical server market declined by 11.6% in 2009 to $8.6 billion, down from $9.7 billion in 2008, according to the International Data Corporation (IDC) Worldwide High-Performance Technical Server QView. Unit shipments dropped 40% year over year during the recession year. IBM and HP ended the year in a statistical tie with 29.3% and 28.6% of overall factory revenue market share respectively.

A bright spot was the "Supercomputers" segment for HPC systems priced at $500,000 and up, which grew by 25% to reach $3.4 billion during the difficult year. Fueled by multiple transactions in the $100 million range, the top bracket in this segment, for HPC systems priced above $3 million, grew even faster, expanding by a whopping 65% to reach $1.0 billion. At the other end of the price spectrum, revenue from "Workgroup" HPC systems priced below $100,000 slid 33% to $1.7 billion as buyers delayed or canceled some planned acquisitions in this segment that is characterized by purchases based on shorter sales cycles and more discretionary spending.

"IDC expects the HPC technical server market to begin recovering from the impact of the global economic recession in early-2010, with year-over-year growth projected at 5% to 7%. And just as the recession affected HPC market segments unequally, so too will the recovery," said Earl Joseph, program vice president for HPC. "Many firms have been so battered that they will maintain capex restrictions even in mission-critical areas such as HPC."

"On the other hand, HPC is such an entrenched part of the R&D process in leading oil and gas companies, in government, and in some entertainment and consumer product firms, that budget cuts during the recession have been rare and HPC growth plans are already in place," said Jie Wu, research director for Technical Computing. "Government and university spending, which together make up about 65% of all HPC server revenue, declined less than the overall market in 2009 and with some help from the U.S. Government stimulus funding should remain another bright spot during the recovery."

Vendor Highlights

• IBM took the lead in the Supercomputer segment with 45% market share and, compared to the prior year, IBM's revenue in this segment was up 37%. The growth was fueled by both IBM's traditional focus on the high-end of the market and the resilience of this particular segment to the overall economic conditions.
• HP maintained its leadership position in the sub-$500K market with 33% revenue share, although its revenue in this segment was down 32% year over year. The drop in sales in this part of the market was mainly caused by cuts in customers' discretionary spending during the recession.
• Dell held on to its number three position overall with nearly 13% market share. Year-over-year revenues were down by slightly more than 29%. As a cluster vendor with its primary focus on the mid-to-low end of the market, Dell was hurt by the major budget contractions in these segments.
• Sun captured 4.1% revenue share and was ranked in the number four position, finishing the year in a statistical tie with Cray. Sun's overall revenues were down 25% year over year. Both the Oracle-Sun merger and the down economy had a negative impact to the company's sales in 2009.
• Cray, the supercomputer company, took 4.0% market share overall and finished the year in the number four position, tied with Sun. The company had a nice recovery from 2008 with year-over-year growth of 57%, thanks to its strong focus on the very high end of the market, which remains somewhat insulated from economic conditions.

Worldwide Technical Computing Hardware Server, 2009 Top 5 Vendor Revenue and Market Share

(revenues in millions)
Vendor		2009 Revenues		2009 Market Share		2008 Revenues		2008 Market Share		2009/2008 Growth
1. IBM		$2,532		29.3%		2,590		26.5%		–2.3%
1. HP		$2,473		28.6%		3,563		36.5%		–30.6%
3. Dell		$1,100		12.7%		1,554		15.9%		–29.2%
4. Sun		$350		4.1%		467		4.8%		–25.1%
4. Cray		$342		4.0%		218		2.2%		56.7%
Others		$1,840		21.3%		1,379		14.1%		33.4%
Total		$8,637		100%		9,771		100%		–11.6%

Source: IDC Worldwide Technical Computing QView, February 2010.

The IDC Worldwide High-Performance Technical Server QView presents the HPC market from various perspectives, including by competitive segment, vendor, cluster versus noncluster, geography, and operating system. It also contains detailed revenue and shipment information by HPC model.

For more information about the IDC Worldwide High Performance Technical Server QView, please contact Jie Wu at jwu@idc.com.