Hyperion Research's Steve Conway on the COVID-19 impact on the HPC market and the democratization of HPC in Europe

23 Jun 2020 Almere - Our second guest in thePrimeur Magazinevirtual studio was Steve Conway from Hyperion Research. We talked about the HPC market and the HPC situation in Europe.

Primeur Magazine: What are developments in the HPC market, Steve?

Steve Conway:First of all, 2019 was a very strong year, a record year again. 2018 was a record year too, so 2019 was even a bit stronger. Of course, 2020 will be a bit different because of the impact of the coronavirus. Already the first quarter was down between 15 and 18 percent from the prior years' first quarter but that is not a surprise. The HPC market historically has weathered these storms pretty well and we expect that to happen again. There was not a lot of cancellation of orders but postponement of orders. It is more of a timing issue. The market will be strong again but it may take a while to get back to the levels where it was before.

Primeur Magazine: You also see that a lot of people are now using supercomputers to do calculations and simulations that help COVID-19 research, so you can still expect that this will take on and have a positive effect on the market, we guess?

Steven Conway:Yes, and all around the world. That is one helpful factor. There has been a lot of demand for COVID-19 research at these centres. The things that have not been so helpful is some delay in parts as ordering and some shutdowns of factories temporarily. Fortunately, they are mostly up again now. I do not expect it to have a very big impact in 2020 but there will be an impact.

Primeur Magazine: It is more like a delay than a real fact that orders have gone forever?

Steve Conway:Exactly. It is just a delay of things. It does not seem to have been delaying things very much at the exascale level. People have really worked hard to push forward on those developments but there may be a little bit of a delay.

Primeur Magazine: Can you tell a little bit about the development of the HPC companies. Do we see some changes there?

Steve Conway:I think the biggest change really recently was with HPE in its acquisition of Cray. HPE in 2019 moved to up to 37% of the market for HPC servers. They are in a very strong position. Dell has been growing very quickly to 22% of the server market in 2019. Everybody after that is 10 percent or less but there are a lot of companies that are strong and growing such as Lenovo, Atos and Fujitsu.

Primeur Magazine: Can you also see some things happening in the networking and storage areas and the all the market segments that that go with it?

Steve Conway:Absolutely. Storage in particular is growing faster than any other part of the market because of the rise of data intensive methods both on the simulation and analytics side. Many of the most important emerging artificial intelligence use cases - people talk so much about the analytics part of it but in fact the simulation part is equally important - most of them will benefit from both simulation and analytics, both of them data-intensive. That is really an important development down in the market.

The other big development is of course Cloud computing. For the most part it has not cannibalized on-premise computing - not much of what has happened in third-party Clouds like Amazon, Google, Microsoft Azure or Alibaba, Tencent, and Baidu in China - not much of that is being taken from on-premise sites and moved to Cloud environments. It are mostly things that have not been run in on-premise yet.

That is starting to change. Those two worlds of Cloud and on-premise are starting to melt together a lot more. The hybrid environments are really growing but the Cloud market for HPC really grew in 2018-2019. For about a decade before that, it about was only about eight or nine percent of all HPC workloads that were running on third-party Clouds. This jumped in 2019 to 20% of all HPC workloads. The main reason for that is that the Cloud services providers (CSPs) really started paying much more attention to HPC because it is a pretty big market. Also they see it as the key to artificial intelligence (AI) leadership. They have really made their infrastructures friendlier toward a larger part of the HPC workload spectrum.

Primeur Magazine: If you talk about artificial intelligence, is that something that is built on top of HPC or is it cannibalizing HPC? How do you see that?

Steve Conway:It is not cannibalizing HPC. HPC is indispensable at the forefront of AI research and development, for all those emerging use cases like precision medicine, automated driving, business intelligence and so forth. Enterprise server technology has not been able to address the leading-edge requirements in AI. HPC turns out to be a very good match for those.

Primeur Magazine: So far for the market developments. Actually, we should have been in Frankfurt and we should have been at ISC but Frankfurt is Europe. A lot of things are being developed in Europe. What is your vision about that situation?

Steve Conway:It is remarkable. From my standpoint, we have been for more than a decade very involved with developments in Europe, some of the behind-the-scenes planning, reports, and so forth. What has happened in recent years has just been remarkable to watch. It used to be that in Europe what you saw, was that the so-called big six countries had the main HPC resources and funding. It was best addressed by PRACE. They adopted rules for review that made access to those resources from researchers throughout Europe easier. What has happened lately has been different.

A really fundamental deep democratization of HPC in Europe has taken place, starting with changing the rules for funding that allowed pooling of money to happen much more easily between the European Commission and the Member States and also among the Member States themselves. This means that larger pools of money could be put together. Now you have a very strong exascale strategy in Europe and you also have the Competence Centres like the EuroCC. The Competence Centre initiative is relatively new. A Competence Centre will be set up in each country starting in September. CASTIEL, which is another one, supports the spread of expertise making sure that this is running good in each country.

The things that the European Commission outlined ten years ago are now in fact becoming reality. That really is a major challenge because Europe, unlike the United States, Japan or China, is not one country. Consensus has to be achieved. A lot of that has now been achieved. It really is a remarkable achievement.

Primeur Magazine: Yes, there is a lot of development there. Of course, by pooling resources and expanding it into other countries, you also get difficulties: the funding has to be matched locally or nationally with the general EuroHPC funding. Do you see any problems there or is this going smoothly

Steve Conway:It may not happen in some places and happen in other places but at least each country is in charge of its own fate now where HPC is concerned. If it does not happen there is no one to blame but themselves.

Primeur Magazine: I am from the Netherlands so I do not want to comment on our national policy in this but we are not on the forefront, let us say it in a positive way. In Europe, there is also the idea of having larger systems. The first one will come online probably at the end of this year or early next year. Will that add in having Europe become a main player on the global scale?

Steve Conway:Europe is already a main player on the world scale. About nearly around 30% of the global HPC market is in Europe. The difference has been that most of that market really belonged to vendors from outside of Europe. The big push has been to increase and strengthen the European supply chain, so this dependency is no longer so strong. I think some good progress has happened there through things like the European Processor Initiative. The world still has to see the outcome but at least, things are in motion.

Primeur Magazine: One of the parts of the European Processor Initiative is based for a big part on Arm processors. You also see that the Japanese are building their supercomputing on Arm processors. Is Arm really growing up in HPC?

Steve Conway:Yes is the short answer. There is a demand for Arm throughout the world including North America, the US market. Also a lot of things are contributing to that demand. People want an alternative to the dominant x86 processor. An alternative gives you a technical and also a financial advantage for your bids. Now, you have Intel and AMD, which are both very viable options, next to x86, but it is good to have another alternative. We actually have done a forecast for Arm processors, our first one. It is a very strong forecast with a compounded growth rate over 60 percent per year.

Primeur Magazine: You also organize the HPC User Forum. What are the plans for that to do that in the near future?

Steve Conway:We have had to cancel the ones near-term. We were going to do one in late September in Bristol and another one just after that in Stuttgart. Because of COVID-19, we are doing other things, reaching out to the HPC community. We are having the steering committee of the HPC User Forum through interviews that are available to read, and sending our videos through the media and on our website. We are struggling a bit just as everybody else is with the coronavirus and its impact on conferences and meetings.

Primeur Magazine: I hope to see you soon at a real-life event, be it an HPC User Forum or ISC or otherwise. Thank you and take care.

Ad Emmen