Assessment of Cloud-based AI Activity and Anticipated HPC User Benefits

According to a recent Hyperion Research study of 115 current and interested QC end-users from both HPC and enterprise IT organizations, the average budget of surveyed QC buyers/users, worth about $3.2 million in 2019, will grow at a 27% CAGR between 2019 and 2024. This growth includes follow-on budget commitments from existing QC users as well as new budget commitments from a tranche of survey respondents who are currently only considering QC involvement. However, the number of organizations that are not yet certain of budget timetables over the next four years remains relatively constant at about 15% of those surveyed. A strong anticipated growth rate in QC end-user budgets implies high expectations for QC developments that can support adequate return on investment or sector-relevant competitive advantage. Current and potential QC users likely will be looking for QC suppliers to roll out a series of steady technological and use case advances that provide assurance that the QC sector is successfully moving to achieve stability, reducing the risk of being an early adopter.

The HPC market is experiencing many challenges and opportunities from the covid-19 virus and its resulting economic impacts. In July 2020, the situation appeared bleak, with a potential for 2020 HPC server revenues being down by as much as 20% year on year. More recently, surveys show an improved outlook, although still with a market contraction of approximately 14% compared with 2019. The Workgroup segment is bearing the near-term brunt of the downside impact.

Covid-related HPC investment impacts are not equally distributed across the vertical markets; several segments are already experiencing increased HPC investments. These include bio/life sciences and government labs. At the same time other verticals are facing a greater negative impact, including oil & gas, manufacturing, and DCC/content distribution