High Performance Computing a Growing Partner Opportunity
HPC is a channel product at prices below $250,000.
July 20, 2020
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You’re likely to recognize the names of HPC server vendors. Hewlett Packard Enterprise (HPE), Dell Technologies, IBM, Lenovo, etc. HPE, in fact, garnered 37.2% of the HPC market in 2019 and leads among all vendors in this space. Dell Technologies is in the No. 2 slot, with 22% market share.
After HPE and Dell, market share percentages fall into the single digits. Inspur – 6.6%, Lenovo – 6.6%, and IBM – 3.6%.
Most recently, HPE closed its acquisition of supercomputer vendor Cray. But, that isn’t what propelled HPE to the top spot in Hyperion’s HPC market data. They’ve been a leader for many years. HPE, along with IBM, led the HPC pack of vendors for some time. Then, IBM sold its x86 server business to Lenovo but remains a serious player in this market. The company builds some of the most powerful supercomputers in the world.
In a Top500 session at ISC, 2020 Digital we learned that Intel’s x86 architecture dominates HPC. Intel is found in 95% of the Top500 machines today.
The 55th Top500.org edition offers separate vendor market share figures for research and commercial. The reason? It’s because the markets for scientific computing and for commercial data processing are very different.
In the research market, Cray commands (22%) leads. HPE garners 16%. Now one company, HPE has 38% of the supercomputing market in research. Atos claims 13% market share followed by IBM with 9%, Fujitsu with 7%. Lenovo rounds out the top five with 6%.
On the commercial side, Lenovo tops the charts with 33% market share, followed by Sugon 16%, Inspur 29%, HPE 3% and Atos 3%.
A big factor driving the sale of high-performance computers is price. You can now buy devices that at one time cost millions of dollars for as little as $10,000.
Breaking down the Hyperion research figures even more, about 90% of the HPC units sold were under $250,000, and 77% sold for under $100,000. The number of units sold in 2019 under $100,000 was nearly 57,600. The average unit price for units sold was for about $34,000. That is within reach for many businesses.
“Half of the market is now the private sector. It used to be that none of the market was private sector. It used to be government and academic research,” said Steve Conway, senior advisor, HPC market dynamics at Hyperion Research.
HPC is a channel product with prices below $250,000. Think of it as a high-end channel product.
In 2019, the total number of units under $250,000 sold worldwide was nearly 79,600, according to Hyperion. The total value of the contract – including storage, software, technical support, etc. – was about $14 billion.
Of all of the high-performance computers sold worldwide, more than 91% were channel.
With an average street price of $34,000, it’s no surprise to see the HPC market change.
“It’s amazing that so many small and medium-size businesses are buying these. But there are large companies that have a couple of hundred of these scattered throughout the company,” said Conway.
HPC channel partners command a lot of expertise. They need to know how to do peer-to-peer selling. This can take two forms, explains Conway.
There are partners who sell HPC solutions and address a broad range of problems. And then there are partners who focus on a single vertical industry or domain-specific selling; for example, investment banks or universities. In the case of universities, partners understand the specific types of research universities tend to do.
“The common denominator is that these VARs get deep into understanding the problems that people are trying to solve with these computers,” said Conway.
HPC in the enterprise is taking shape. With HPC solutions becoming more affordable for businesses of all sizes, organizations are using these systems for a variety of workloads. For example, HPC is used to run business operations such as sales analysis, HR and customer resource management, as well as fraud detection.
Analytics, AI and big data play a big role in the use of high-performance computers in enterprise applications, as does data [which is also driving the storage market]. Data analytics is being used make businesses more competitive.
Company XYZ was able to see the performance of its top 25 salespeople in a particular location in the last quarter. But to be competitive, it needs to know why these 25 salespeople stand out. Are the supervisors performing better? Is it the territory? Is it the product they’re selling? The goal is to be able to get those answers quickly to readjust for the next quarter to maximize revenue. HPC and data analytics allow businesses to do that.
Partners need to understand the scope of problems that enterprises want to solve to be successful.
The added appeal of HPC today, is AI. AI + HPC has expanded the total addressable market (TAM). HPE, Dell and IBM all have HPC and AI portfolios, for example.
Hyperion’s Conway notes that the AI piece in the HPC market is growing by a 30% CAGR.
“There’s recognition in the marketplace that if a company isn’t putting its data to work, it’s putting itself at a disadvantage in the market. And, likely, one of their more nimble competitors will do so and be disruptive,” Stefan Bockhop, executive director DCG channel North America, told Channel Futures before leaving Lenovo. “So, there’s a high level of impetus for C-level executives to make sure they’re putting to work the data they have in their business and getting the best outcome for it.”
That’s through HPC, AI and learning from the data and putting it to use. AI is a quick ROI for businesses. That’s a shift and more partners are apt to go after that market.
The global market for AI software will expand to $98.8 billion by 2025, up from $16.4 billion in 2019. That’s according to recent research from Omdia.
“Economic effects from the COVID-19 pandemic have widened the dichotomy between early AI adopters – the ‘AI haves’ – and the trailing followers – the ‘AI have nots,” said Omdia senior analyst Neil Dunay. “Industries that have pioneered AI deployments and have the largest AI investments are likely to continue to invest in what they view as proven, indispensable technology for cost cutting, revenue generation, and enhancing customer experience.”
Amazon, Google and Microsoft are heavily pursuing the HPC market. Hyperion declared 2019 as a major growth year for HPC in public clouds.
Microsoft offers Azure HPC solutions by industry and applications. For example, automotive, energy, financial services, life sciences, silicon, manufacturing, machine learning, visualization and rendering. The company also offers HPC services such as network, compute, storage, workflow and intelligent services.
Cloud HPC appeals to businesses across the board. In 2019, the cloud piece of HPC was worth about little more than $3 billion – that’s for cloud usage. Expect to see that figure jump to $8.5 billion by 2024, according to Hyperion. The total HPC market (on premises and cloud) in 2024, worldwide, is $51.4 billion.
Drivers for cloud adoption: overflow, or surge, for workloads – 44%; special hardware/software/other resources not available on premises – 35%; more cost-effective than doing the same work onsite – 34%; separate environment for development projects and testing – 23%; testing viability of use cases before investing in hardware/software onsite HPC – 19%; corporate policy decision – 15%; lack of access to an on-premises data center – 14%; and “we don’t plan to use external clouds” – 24%.
Amazon, Google and Microsoft are heavily pursuing the HPC market. Hyperion declared 2019 as a major growth year for HPC in public clouds.
Microsoft offers Azure HPC solutions by industry and applications. For example, automotive, energy, financial services, life sciences, silicon, manufacturing, machine learning, visualization and rendering. The company also offers HPC services such as network, compute, storage, workflow and intelligent services.
Cloud HPC appeals to businesses across the board. In 2019, the cloud piece of HPC was worth about little more than $3 billion – that’s for cloud usage. Expect to see that figure jump to $8.5 billion by 2024, according to Hyperion. The total HPC market (on premises and cloud) in 2024, worldwide, is $51.4 billion.
Drivers for cloud adoption: overflow, or surge, for workloads – 44%; special hardware/software/other resources not available on premises – 35%; more cost-effective than doing the same work onsite – 34%; separate environment for development projects and testing – 23%; testing viability of use cases before investing in hardware/software onsite HPC – 19%; corporate policy decision – 15%; lack of access to an on-premises data center – 14%; and “we don’t plan to use external clouds” – 24%.
The high-performance computing (HPC) market may not be on your radar, but maybe it should. Did you know that HPC is very much a value-add market? No? Well, it is.
HPC is the ability to process data and perform complex calculations at high speeds. It is often, and alternatively, called supercomputing.
More traditional – or classic – HPC is proprietary with a lot custom technology. Today, just about all high -performance computers are based on standard technology — processors that you may find in a standard laptop. The difference between the two is the number of processors, one or hundreds of thousands. Additionally, HPC demands huge amounts of memory, even when compared to a traditional data center. And the same for storage.
Emerging high performance computing is about going more mainstream, and into the private sector. HPC was more common in government and academia, and in industries such as aerospace, automotive and pharmaceutical. More recently, high-performance computers are found in the enterprise data center to run business operations.
In 2019, the high performance computing server market totaled $13.7 billion, according to Hyperion Research. What may surprise you is the breakdown of that revenue. Supercomputers over $500,000 account for $5.1 billion; divisional ($250,000-$500,000) account for $2.6 billion; departmental ($100,000-$250,000) brought in $4 billion; and workgroup (under $100,000) account for $2 billion.
The total number of units shipped in 2019 in all price categories was a little more than 87,000.
Peruse our slideshow above for a closer look at the high performance computing market today, including information about big players IBM and Dell, as well as the move Microsoft is making.
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