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Presentation: Getting the Most from HPC Budgets: Financing Systems, Software, and Services, Jan 29

HPC IS CAPITAL-INTENSIVE

One of the main challenges in deploying High Performance Computing (HPC) at businesses, universities and government agencies is the up-front cost of computing, storage, and network infrastructure. Although individual servers cost only a few thousand dollars, even a relatively moderate-sized HPC cluster can run into hundreds of thousands of dollars, especially when software, support and maintenance costs are bundled into the purchase. For government agencies and the largest commercial organizations that field capability-class supercomputing systems, these costs escalate into the millions of dollars. That’s an enormous periodic cash drain for organizations that must also make payroll and keep the lights on.
 
According to Intersect360 Research surveys we conducted over the last five years (2011 through 2015), users allocated 48 percent of their IT budgets to purchase hardware, while software accounted for 12 percent and services accounted for 7 percent. Together they account for two-thirds of HPC expenditures. Despite the growing use of cloud/utility computing in this area, its small base (currently just three percent of all HPC spending) suggests on-premise infrastructure and software spending will continue to dominate budgets for the foreseeable future.
 
Since HPC is recognized as a valuable resource by both businesses (as a revenue generator) and non-profit organizations (as a research accelerator), budgets are generally growing. Users cannot design a next-generation airplane, locate the next oil reservoir, deliver more accurate risk assessments for financial portfolios, or improve image searching capabilities, without continuing to invest in HPC technology. Intersect360 Research believes that the strong tie between HPC systems, buyers’ core R&D, and business activities will continue to expand HPC spending.
 
Regardless, capital expenditures (CAPEX) at any organization, whether they employ HPC or not, tend to be under constant pressure. CAPEX efficiencies are always desirable since it frees up money for operational costs and personnel. In HPC, where the cost of running and staffing these large systems is considerable -- 10 percent and 20 percent of the budget, respectively, according to our surveys -- the less money spent on purchasing systems, the more will be available to operate them and pay staff.
 

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