Dell has become one of the top vendors in the worldwide HPC market, capturing 12.7% of revenue in 2009 to take third place globally. Dell has succeeded due to producing price-competitive, standards-based, reliable cluster systems that meet many buyers' needs. Dell offers a wide range of HPC solutions including clusters, workstation-based personal supercomputers, and storage. While maintaining competitiveness and avoiding unprofitable deals, opportunities for Dell include leveraging strengths in departmental and SMB HPC segments and capturing scale-out business in the growing petaflop market.

1. IDC 1025
I D C T E C H N O L O G Y S P O T L I G H T
Dell: An HPC Market Leader in the Cluster Era
October 2010
By Steve Conway, Earl C. Joseph, Ph.D., and Jie Wu
Sponsored by Dell
With minimal fanfare, Dell has become one of the world's top HPC vendors — third overall and
second in the large segment for departmental HPC systems. Dell has advanced in this market
because of the company's ability to produce price-competitive, standards-based, reliable computers
that match the needs of many HPC cluster buyers today. Dell is expanding its HPC strategy to enable
more direct partnering with customers in pursuit of their HPC goals.
Dell offers a wide spectrum of HPC systems and solutions, and the company has grown its customer
install base substantially in recent years. To maintain and accelerate its HPC growth, Dell will need to
continue striking the right balance between price competitiveness and value-added features and
capabilities. Dell has amassed experience deploying large-scale, Top500-class systems for
customers, and IDC believes that Dell has a substantial opportunity to benefit from the worldwide
"petaflop race" that is already under way.
Dell can also leverage its strength in departmental HPC systems to exploit the anticipated growth of
that segment. Finally, Dell's personal supercomputer offerings position the company to share in the
expected rebound of that market as the global economy recovers.
This Technology Spotlight looks at Dell and its rise to prominence in the worldwide HPC market. The
profile reviews Dell's history in HPC, the reasons for its success to date in this market, the company's
product portfolio and road map, and the challenges and opportunities Dell faces in this competitive market.
The HPC Market and the Rise of Standards-Based Clusters
In its formative era 25 years ago, the worldwide HPC server market was dominated by proprietary,
megaexpensive supercomputers from U.S. and Japanese vendors that were forced to customize
heavily because there were few standard component technologies for them to buy in the open
market. Since 2002, standards-based clusters have almost single-handedly propelled the growth of
the HPC server market; they captured 64% of $8.6 billion in revenue in 2009, and IDC projects that
they will exceed $10 billion in revenue in 2014.
Clusters have increasingly conquered the HPC market by offering irresistible price/performance. This
affordability has helped to democratize HPC, which is used today not just by government and
university researchers but to design products ranging from cars and planes to financial services
offerings, golf clubs, microwave ovens, animated/CGI films, potato chips, and diapers.
In the 1998–2001 period, clusters were typically self-built out of hand-me-down PCs and servers, with only
rudimentary software available to integrate this miscellany. Today, most HPC clusters are commercial
products that are sold by OEMs, with professional management software preinstalled and pretested.
But the evolution of clusters is far from over. Buyers/users want the latest x86 processors, higher
compute densities, improved energy efficiency, availability of accelerators such as GPGPUs, and
"ease of everything" — from purchasing to installing, maintaining, and upgrading these HPC systems.
Ease-of-everything attributes are especially important for smaller organizations and first-time HPC
users at larger sites.

2. ©2010 IDC2
How Dell Has Become an HPC Market Leader
With little fanfare, Dell has become one of the top leaders in the worldwide HPC market. In 2009, Dell
captured 12.7% of all HPC server revenue to take third place globally. And with 29.8% share, Dell
took second place in the $2.5 billion market for department HPC systems priced from $100,000 to
$249,000 — nearly equaling the share of the first-place finisher and about doubling the share of the
third-place finisher. IDC forecasts that the departmental segment will maintain healthy growth to
reach $3.4 billion in 2014.
Dell's HPC Strategy
Dell's rise to HPC market prominence is based on a strategy that exploits the following key
advantages:
Dell's historical business model. One of the strengths that has driven Dell's historical success
is the company's ability to produce high-volume, standards-based, reliable computer and storage
systems with competitive pricing. This model would not have fit the early supercomputer era,
when competition was based on custom technologies and low-volume manufacturing. But in the
current era of standards-based clusters that sometimes include tens or hundreds of thousands of
components, Dell's business model provides a distinct competitive advantage.
Dell's HPC-specific strategy. During the past decade, Dell has evolved from a relatively
uninvolved, increasingly successful manufacturer-supplier of PowerEdge servers and other HPC
resources to a company capable of engaging directly with HPC customers to help them achieve
their ambitious goals for these resources — thanks in part to Dell's hiring subject-matter experts
in fast-growing areas such as genomics and others. This advance in capabilities has enabled Dell
to capture larger, more demanding HPC sites, such as the 152 teraflop Dell HPC system at the
University of Colorado (number 31 on the June 2010 Top500 list), along with Lawrence Livermore
National Laboratory, CERN, NASA, NCSA, and others. It has also permitted Dell to partner
closely with commercial HPC customers such as R Systems, Nakashima Propeller Company,
and Renewable Energy Systems.
Dell's HPC Solutions Portfolio
Briefly, Dell's HPC solutions portfolio consists of the following offerings:
Dell HPC clusters. Dell's HPC cluster solutions exploit the 11th-generation Dell PowerEdge
servers, with options for blade-based on rack-mounted servers, AMD or Intel processors,
Ethernet or InfiniBand interconnects, Linux or Windows operating systems, and GPU-based
computing (e.g., the Dell C410x).
Dell workstation-based personal supercomputers. Dell also offers personal supercomputers
for individuals or workgroups. These x86-based systems are available with NVIDIA Tesla
GPGPUs and the CUDA architecture.
Validated configurations. Dell was one of the three founding members of the Intel Cluster Ready
(ICR) consortium, which has grown to more than 150 members today. Dell's HPC systems,
including the workstation personal supercomputers, comply with the ICR standard for preintegrated,
pretested hardware and software components designed to work "right out of the box."
Dell storage solutions. The company provides a wide range of Dell-branded HPC storage
solutions, along with solutions from DataDirect Networks and Panasas.

3. ©2010 IDC 3
Challenges and Opportunities
There are a number of important challenges and opportunities confronting Dell in the worldwide HPC
market.
Challenges
Maintain market differentiation. Every HPC system vendor needs to decide on an appropriate
balance between competing on price alone with undifferentiated products ("white boxes") and
competing on price plus value-added features. Value-added features increase the price tag and
reduce the TAM. Dell has succeeded to date in addressing a large portion of the HPC market by
practicing moderation in its approach to value-added features. But because user requirements
are constantly evolving, Dell and other vendors will need to review their balance frequently in
order to maintain market differentiation.
Avoid unprofitable deals. Dell has so far avoided the high-prestige, negative-margin HPC deals
that have helped cripple the finances of some other HPC vendors. Dell will need to continue
avoiding most or all such deals.
Be less humble. Based on IDC's daily encounters with HPC buyers and users, we believe that
relatively few realize that Dell has become one of the HPC market leaders. Dell has made
important strides in HPC marketing lately, but to create the credibility needed to accelerate sales,
Dell should ramp up its marketing and marketing communications efforts. This includes
reinforcing the company's commitment to the HPC market and more aggressively communicating
Dell's success story in HPC at conferences and meetings and through the media and other
outlets.
Opportunities
Exploit the worldwide "petaflop race." The high-end HPC segment for supercomputers priced
at $500,000 and up has been undergoing explosive growth — 25% even in the difficult recession
year of 2009. IDC believes that this segment will continue to show strong growth over the next
five years, driven in part by a global race to install petascale and near-petascale systems. These
systems come in two basic flavors: scale out and scale up. IDC believes that Dell has an
especially strong opportunity to capture profitable new business in the scale-out category where
some smaller rivals are already starting to have success.
Maintain and grow share in the departmental segment. In 2009, as noted earlier, Dell handily
captured second place in the worldwide market for HPC systems priced between $100,000 and
$249,000 — and nearly moved into first place in this large segment. Dell is well positioned to
benefit from the anticipated healthy growth of this segment through 2014.
Expand share in the workgroup HPC segment. This segment, for systems priced under
$100,000, was hit hard by the global economic downturn because purchases in this area are
typically discretionary and can be delayed or cancelled. IDC forecasts that this segment will
rebound significantly as the worldwide economy recovers. Dell is well positioned to exploit this
growth because of the company's personal supercomputer offerings and because Dell, unlike
many competitors, has a strong desktop story to leverage as more users migrate from desktop
technical computing to server-based HPC.
Expand share in the fast-growing SMB segment. This segment is growing fast as companies
face competitive pressures to make more profits, lower costs, improve product quality, and
deliver products to market more quickly.

4. ©2010 IDC4
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