Volume 5, Number 10 -- March 11, 2008

HPC Sales Account for Most of 2007's Server Sales Growth

Published: March 11, 2008

by Timothy Prickett Morgan

The appetite for high performance server clusters, vector supercomputers, and a few exotic hybrid machines continued to outpace the growth rate in the overall server space in 2007, according to market research just completed by IDC. The so-called HPC market, which most of us old hands still think of as supercomputers, has always been on the cutting edge of technology, but in recent years, it has been one of the key drivers of the server market as supercomputing has become more mainstream.

In addition to the casing of HPC server sales, IDC has also worked with the supercomputer industry--all seven members of it (that was a joke, vendors, so relax)--to come up with a new segmentation of the supercomputer market. The preliminary figures that IDC announced recently were based on data from the first three quarters of the year and preliminary estimates for fourth quarter sales, which are subject to being updated at some point in the next few months. (But possibly not.)

The overall HPC server market grew by 15.5 percent in 2007 to reach $11.6 billion in sales, according to IDC, which also announced a few weeks ago that estimated overall server sales, including mainframes, midrange and high-end Unix gear, and the same kinds of boxes that go into HPC machinery but are used for general purpose computing, rose by only 3.6 percent to $54.4 billion. Those numbers tell you two things. First, the HPC market accounted for 21.3 percent of all server sales last year, and that the HPC slice of the server space grew in excess of four times as fast as the overall server space. Said another way, the general purpose server space outside of the HPC space accounted for $42.8 billion in sales in 2007, up by only eight-tenths of a percent compared to sales of similar gear in 2006.

Basically, if you take HPC server sales out of the equation, then general purpose server sales were essentially flat in 2007. And as I have said for a long time now, the reason they are flat is because server virtualization and consolidation are starting to have an impact on sales. HPC customers, as a rule, do not use virtualization because of the overhead this software imposes. HPC workloads are more driven by memory bandwidth, I/O bandwidth, and clock cycles than the typical infrastructure workloads out there in the data center and are therefore not as readily virtualizable.

The growth in the HPC space has been remarkable in the past few years. IDC reckons that in the five years between 2002 and 2007, HPC server sales more than doubled from just under $5 billion to hit $11.6 billion in 2007; that's a compound annual growth rate of 18.8 percent over those five years, and that was despite a single-digit 9.2 percent growth rate in the HPC space in 2006. IDC is projecting slower sales growth between now and 2011, when it expects sales to only grow by 29 percent to around $15 billion. I will be interested to see how revenues in the non-HPC part of the market fare in the next couple of years, as hardware-assisted virtualization gains momentum in the X64 base, which accounts for most of the volumes in the server racket.

For now, HPC sales are holding up because they are generally not boxes bought by big banks, mortgage companies, and other financial services firms that spend a lot more of their budgets on more traditional transaction processing gear. (That's not to say that financial and real estate firms don't have supercomputers; it is just a smaller piece of their budgets.)

"There was no discernible evidence of the general economic slowdown reflected in 2007 HPC system sales," explains Steve Conway, IDC's research vice president for high performance computing. "Several factors likely helped insulate the HPC market: the length of HPC budgeting cycles, the global nature of the HPC market, HPC's relatively small presence in the financial sector, and HPC's essential role in government, academic research, and industry. IDC will closely monitor 2008 quarterly revenue data for any evidence of economic impact."

As we all know, Linux-based clusters have basically taken over the HPC space, and in 2007, such clusters accounted for 65 percent of sales, or about $7.5 billion. There's still a fairly strong contingent of high-end Unix boxes in the HPC space, as well as a smattering of Windows (but growing fast), and a number of hybrid boxes that support more than one operating system.

By HPC platform type, IDC believes that the workgroup segment, which is comprised of machines that cost under $100,000, had sales of $2.7 billion last year, declining by 3.3 percent. There was a 21 percent surge in departmental machines (which sell for between $100,000 and $250,000) to $4.1 billion; this is now the largest part of the market. Divisional HPC machines, which as the name suggests are more powerful and expensive boxes meant to be shared by many departments, saw their sales rise by 19 percent to $1.7 billion. Divisional class HPC machines cost between $250,000 and $500,000. The top-end segment, which is called supercomputers by the new IDC classification, cost more than $500,000; this segment accounted for $3.2 billion in sales in 2007, up 24 percent.


Linux and Windows Server Sales Outpace the Market in Q4

Gartner Gives Annual Report Cards to Server Makers

IDC Says Server Buyers Weigh Economy and Power in Q3

Emerging Markets and Virtualization Drive Q3 Server Sales

Server Sales in Q2 Reach Heights Not Seen Since 2000

The Market for Servers in Europe Is Hot

Virtualization, Consolidation Drive Server Sales in Q1

Server Sales Up a Bit in 2006, But Q4 Looks a Bit Weak

HPC Server Market Explodes to $9.1 Billion in 2005

                     Post this story to
               Post this story to Digg
    Post this story to Slashdot

Sponsored By

nuBridges, Inc. is the secure
eBusiness authority

Thousands of companies worldwide use nuBridges software and services to connect electronically with business partners, protect information in transit and at rest, and comply with legislative and industry mandates for data security.

nuBridges technology drives B2B transactions worth $884 billion every year.

For more information on nuBridges, visit

Editor: Timothy Prickett Morgan
Contributing Editors: Dan Burger, Joe Hertvik, Kevin Vandever,
Shannon O'Donnell, Victor Rozek, Hesh Wiener, Alex Woodie
Publisher and Advertising Director: Jenny Thomas
Advertising Sales Representative: Kim Reed
Contact the Editors: To contact anyone on the IT Jungle Team
Go to our contacts page and send us a message.

Sponsored Links

Storix:  Easily recover an entire system onto dissimilar hardware with SBAdmin for Linux and AIX
COMMON:  Join us at the annual 2008 conference, March 30 - April 3, in Nashville, Tennessee is the resource for job transitions after age 40


IT Jungle Store Top Book Picks

Getting Started with PHP for i5/OS: List Price, $59.95
The System i RPG & RPG IV Tutorial and Lab Exercises: List Price, $59.95
The System i Pocket RPG & RPG IV Guide: List Price, $69.95
The iSeries Pocket Database Guide: List Price, $59.00
The iSeries Pocket Developers' Guide: List Price, $59.00
The iSeries Pocket SQL Guide: List Price, $59.00
The iSeries Pocket Query Guide: List Price, $49.00
The iSeries Pocket WebFacing Primer: List Price, $39.00
Migrating to WebSphere Express for iSeries: List Price, $49.00
iSeries Express Web Implementer's Guide: List Price, $59.00
Getting Started with WebSphere Development Studio for iSeries: List Price, $79.95
Getting Started With WebSphere Development Studio Client for iSeries: List Price, $89.00
Getting Started with WebSphere Express for iSeries: List Price, $49.00
WebFacing Application Design and Development Guide: List Price, $55.00
Can the AS/400 Survive IBM?: List Price, $49.00
The All-Everything Machine: List Price, $29.95
Chip Wars: List Price, $29.95

The Four Hundred
IBM Readies Big Power6 Boxes, New X64 Servers

System i Security: Lots of Room for Improvement

Server Virtualization and Consolidation Require More Resiliency

Thermometer Money: Changing a Business Partner Paradigm

Arrow Buys French Midrange Distributor

Four Hundred Stuff
Centerfield Adds More Smarts to Database Performance Suite

Aura Equipments Pushes i5/OS-Excel Integration

Innovatum Adds Biometric Authentication to Improve Compliance 'Auditability'

Surf's Up for Web-Based Organized Crime, IBM X-Force Says

WorksRight Gains USPS Certification, Launches New Product

Big Iron
IBM Launches 64-Way z10 Enterprise Class Mainframe Behemoth

Top Mainframe Stories From Around the Web

Chats, Webinars, Seminars, Shows, and Other Happenings

Four Hundred Guru
Performance Advice from a Mysterious Friend

Don't Let SQL Name Your Baby, Take 2

Admin Alert: When System i Ethernet Cards Stop Broadcasting

System i PTF Guide
March 1, 2008: Volume 10, Number 9

February 23, 2008: Volume 10, Number 8

February 16, 2008: Volume 10, Number 7

February 9, 2008: Volume 10, Number 6

February 2, 2008: Volume 10, Number 5

January 26, 2008: Volume 10, Number 4

The Windows Observer
Ballmer Shrugs Off $1.4 Billion Fine from EU

Linux and Windows Server Sales Outpace the Market in Q4

Microsoft Touts Speed, Simplicity of Windows Server 2008

SMBs Get the MOS Attention From Microsoft

Yahoo Says Microsoft Bid is Hurting Business

The Unix Guardian
AMD Says Barcelona Bug Is Fixed, Almost Ready to Ramp

Linux and Windows Server Sales Outpace the Market in Q4

MetaRAM Quadruples DDR2 Memory Capacity in Servers

Mad Dog 21/21: Plane's Peeking

Infinite Software Partners with HP, Acquires Altos Technology Group

Four Hundred Monitor
Four Hundred Monitor's
Full iSeries Events Calendar


Guild Companies
Vibrant Technologies

Printer Friendly Version

AMD Says Barcelona Bug Is Fixed, Almost Ready to Ramp

HPC Sales Account for Most of 2007's Server Sales Growth

IBM Readies Big Power6 Boxes, New X64 Servers

Canonical Ships Landscape System Management Tool for Ubuntu

Surf's Up for Web-Based Organized Crime, IBM X-Force Says

But Wait, There's More:

SAP Shows Prototype X64-Linux-ERP Bundles . . . Linux Market to Triple by 2012 . . . SCO and New Sugar Daddy File Bankruptcy Reorganization Plan . . . Arrow Buys French Midrange Distributor . . . IBM Slashes Prices on Blade Server I/O Virtualization Software . . .

The Linux Beacon


Subscription Information:
You can unsubscribe, change your email address, or sign up for any of IT Jungle's free e-newsletters through our Web site at

Copyright © 1996-2008 Guild Companies, Inc. All Rights Reserved.
Guild Companies, Inc., 50 Park Terrace East, Suite 8F, New York, NY 10034

Privacy Statement