Supercomputers sell even in a recession IBM gains High Revenue

The high performance computing market took its lumps in 2009 with sales down 11.6 percent, but IBM came out with a slim market share lead when the duel with HP was done, according to research firm IDC. Why? Supercomputers—going for $500,000 and up—sell even when the economy stinks.

At a high level, factor revenue for high performance computing (HPC) technical server market—systems used for research and development and hard-core engineering—fell to $8.6 billion from $9.7 billion in 2008, said IDC. Unit shipments tanked 40 percent.

Here’s a look at the standings (statement) Above

As you can see, IBM’s share held steady even as the market fell. Turns out that the high-end HPC market held up nicely. Supercomputers, priced $500,000 and up, delivered revenue growth of 25 percent to hit $3.4 billion, reported IDC. HPC systems that run more than $3 million delivered revenue growth of 65 percent to $1 billion. Those high-end markets are IBM’s sweet spot. In fact, IDC reports that IBM had a 45 percent market share in the supercomputer market.

The lower-end of the market took the hit. HPC systems priced below $100,000 fell 33 percent to $1.7 billion as orders were canceled. HP rules the sub-$500,000 HPC market with 33 percent revenue share. Dell, which focuses on the lower end of the market, also took its lumps.

Simply put, the big research and development guns—the oil and gas industry and government—don’t count HPC as discretionary spending as much as the companies buying cheaper systems.

Looking ahead, IDC expects the HPC market to recover with annual revenue growth of 5 percent to 7 percent.