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Thursday, March 21, 2013
HPC Server Market Delivers Record Revenues in 2012


Worldwide factory revenue for the high performance computing (HPC) technical server market increased by 7.7% year over year in 2012 to a record $11.1 billion, up from $10.3 billion in 2011, according to data released by International Data Corporation (IDC).

The 2012 results exceeded IDC's forecast of 7.1% year-over-year revenue growth.

IDC found that IBM led all vendors with a 32.0% share of overall factory revenue, closely followed by HP with a 30.8% share. Dell once again was a strong third-place finisher, capturing 13.5% of worldwide technical server revenue.

Unit shipments in 2012 declined 6.8% year over year as average-selling prices grew, reflecting the continued shift to large system sales.

The brightest spot continued to be the high-end Supercomputers segment for HPC systems, which sell for $500,000 and up. Revenue in this segment jumped 29.3% over 2011 to $5.6 billion. The supercomputing segment accounted for 50.9% of total technical server revenue for 2012. A major component of this year's growth came from very large systems sold by Fujitsu, IBM, HP, and Cray. A single Fujitsu supercomputer, the "K" system installed at Japan's RIKEN, accounted for more than $500 million of the total.

Growth in the Divisional segment ($250,000 to $499,000 price band) dipped 2.2% from 2011 to finish 2012 at $1.2 billion. This segment captured 10.9% of the total revenue for 2012.

After posting a record $3.5 billion year in 2011, the Departmental segment ($100,000 - $250,000 price band) eased back in 2012 to $3.0 billion, still topping the 2009 mid-recession low point of $2.8 billion. The 2012 figure accounted for 27% of all technical server revenue, greater than the combined 2012 totals (22.1%) for the Divisional and Workgroup segments.

The Workgroup Segment (sub-$100,000 price band) modestly rebounded in 2012 to $1.24 billion, a 1.2% gain over the 2011 revenue total but still far from the 2008 figure of $2.5 billion. Workgroup revenue was hit especially hard by the global economic recession, 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. Workgroup revenue has also been dampened a bit by the tendency of workgroups within some organizations to pool their HPC budgets to purchase larger, non-Workgroup HPC systems that are centrally managed and shared. Despite these factors, IDC believes that Workgroup revenue will continue to rebound slowly.

IDC forecasts that the overall HPC technical server market will experience a healthy 7.3% compound annual growth rate (CAGR) over the 2011?2016 forecast period, reaching revenues of more than $14 billion by 2015.

IDC also noted Fujitsu's exceptionally strong year, partly due to the acceptance of the "K" system in Japan, achieving a whopping 470.5% revenue gain over 2011.

Cray revenue also increased by a very strong 127.3%, driven by the acceptance of several large systems. Additionally, Cray's fourth quarter revenue showed a significant bump as IDC started reporting unified revenue for Cray and Appro to reflect Cray's acquisition and integration of Appro's assets during the quarter.


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