Hewlett Packard Enterprise (HPE) continues its historical pattern of technical growth by acquisition with today’s announcement it is buying supercomputer leader Cray Inc. HPE will acquire the Seattle-based company for approximately $1.3 billion, based on a price of $35.00 per share of Cray stock.
Cray recently announced an Exascale supercomputer contract for over $600 million for the U.S. Department of Energy’s Oak Ridge National Laboratory. The system is targeted to be the world’s fastest system, and will use Cray’s new Shasta system architecture. The company was also part of an award with Intel for the first U.S. exascale contract from the U.S. Department of Energy’s Argonne National Laboratory; Cray’s portion of the contract is valued at over $100 million.
Companies in the high performance computing (HPC) space are racing to deliver exascale, with first systems from any vendor expected to come online in 2020. HPE expects the HPC market to grow from approximately $28 billion in 2018 to approximately $35 billion in 2021, a compound annual growth rate of approximately 9%. HPE expects exascale products and services will be a $4 billion opportunity over the next five years.
Exascale refers to computing systems capable of at least one exaflop, or a billion billion (1 quintilian) calculations per second. Exascale is a thousandfold increase over the current supercomputer standard, petascale, which came to market in 2008.
Independent research group Hyperion says total exascale R&D spending was $2 billion in 2018; half of that occurred in China alone. Five years ago it was commonly assumed exascale systems would be on the market by 2019, but research hit a rough patch when Intel didn’t deliver expected performance gains and internal heat issues continue to plague development.
Despite the R&D problems, companies and governments are eager to invest in exascale as soon as vendors can deliver. A Hyperion study commissioned by the US Department of Energy shows companies investing in HPC are generating substantial return on investment (ROI). Across all industries using HPC, an average of $463 is generated in additional revenue for every $1 invested in HPC. Profits or cost savings increase by $44 for every $1 of spending on HPC. The second-highest rated “primary innovation” from those using HPC was “better products,” exceeded only by “created new approach.” These price/performance numbers are with current generation equipment.
Supercomputers address complex challenges and advance critical academic research, including predicting future weather patterns, medical research, and preventing cyber-attacks. Exascale-capable systems will enable solutions to these problems with greater precision and faster results. But HPC computers are not just for advanced number-crunching; Amazon has noted that a 1 millisecond increase in response time reduces sales by 1%. Given that Amazon’s most recent 12-month revenue is approximately $240 billion, that 1% reduction adds up to $2.4 billion in lost revenue annually.