Steve Conway, IDC Research Vice President, HPC

A decade of close scrutiny has shed much more light on the technical computing needs of small and medium enterprises (SMEs), but they are still shrouded in partial darkness. That’s hardly surprising for a diverse global group with millions of members ranging from automotive suppliers and shotgun genomics labs to corner newsstands and strip mall nail salons. Many SMEs presumably will never need HPC in their lifetimes, while many others already benefit from this game-changing technology or could do so. Some SMEs are performing breakthrough work, often by using HPC resources at large, national HPC centers.

What Do We Know?
Let’s zero in on this vibrant group that experts credit as the principal growth engine in many economies. The manufacturing sector is replete with SMEs. Within that sector, the National Center for Manufacturing Sciences (NCMS) reports that, in the U.S. alone, there are 300,000 SMEs (defined as companies with 500 or fewer employees). These firms account for 12 million jobs and are indirectly responsible for another 18 million — more than twice the employment of all large manufacturers combined.

Research results submitted for this article by Jon Riley, NCMS vice president of digital manufacturing, indicate that SMEs can be roughly divided into three categories:

• Those that have already adopted [HPC] digital tools (~10 percent)
• Those that may be interested, but are unconvinced or unable to adopt (~75 percent)
• Those that are not interested in adopting (~15 percent)

More later on the important minority who already use HPC resources. Within the majority who don’t, an interesting contingent consists of SMEs that perform technical computing on desktop systems but have not moved up to technical servers (HPC systems). Credit for initiating research on this group goes to Suzy Tichenor (now at ORNL) and Bob Graybill (now CEO of Nimbis Services). During their time at the Council on Competitiveness, they collaborated with IDC to investigate these “desktop-only” users. The key findings from those 2007-8 studies are largely applicable today:

• In many cases, the companies’ desktop computers were not meeting their advanced requirements, resulting in reduced competitiveness. They responded to this dilemma by scaling down the problems to fit their desktop systems, ignoring the problems, or reverting to much slower, more expensive physical testing and prototyping.
• 40 percent of the organizations were already planning or actively considering the move to HPC servers.
• The chief barriers to HPC adoption were inadequate understanding, the perceived lack of “strategic fit” software and budget constraints. Some SMEs we interviewed said moving to servers would boost annual ISV software licensing costs from under $10,000 to nearly $50,000.

The Bottom 100,000 Buy a Lot
A decade or so ago, a mega-IT company announced plans to enter the HPC market and target not the top 500 supercomputer sites, but “the bottom 250,000.” The plan did not succeed, but it made some sense. Although the world’s 500 biggest supercomputers steal much of the limelight, they represent less than one-half of one percent of the approximately 110,000 HPC systems sold around the world each year.

In 2013, HPC systems sold for less than $250,000 each accounted for $5 billion in revenue, about half (49 percent) of the $10.3 billion in worldwide HPC server revenue. At an average price of $40,400, the sub-$250,000 systems consumed 1.7 million processor parts, 52 percent of 3.3 million processors shipped last year, according to IDC research. The bottom half of the HPC market was hammered during the global economic recession and started coming on strong again last year. SMEs are not the only ones that buy sub-$250,000 HPC systems, but that’s where most SME buyers of HPC gear reside.

Alternatives to Purchasing
Purchasing systems is not the only option open to SMEs wanting to do HPC, of course. Public cloud computing can be an attractive alternative for SMEs that haven’t invested in on-premise HPC resources for their cloud-friendly workloads. We know of SMEs that are doing very well, thank you, by relying entirely on public clouds. Still other SMEs turn to large, national HPC data centers for more powerful computing resources and expertise.

Among the world’s premier HPC data centers, none has deeper experience with industrial firms of all sizes than High Performance Computing Center Stuttgart (HLRS). HLRS Director Michael Resch explained why SMEs work with his center, which is situated in the heart of Germany’s auto industry:

“We see an increasing demand for HPC from SMEs. Especially in our region, SMEs serve as technology solution providers for larger companies. Increasingly, these large clients require a validation of their technology through simulation. In certain fields, simulation can play a crucial role but is not well-known inside large-scale companies. Very small companies with very special knowledge in modelling and simulation make a living in these small market niches, but they need access to large-scale systems for the computational part of their portfolio.”

SME Success Stories
Michael Resch provided two live examples:
• RECOM Services started as experts in combustion modelling for large-scale power plants. Initially, their focus was on the local energy provider. About 10 years ago, HLRS set up a contractual framework that allows RECOM Services to use its large-scale resources and support. RECOM Services has 12 employees who are all highly skilled engineers. They could never afford to buy even a small HPC system. Through HLRS, they have access to a petascale system and have expanded their market into the U.S. and Asia continuously in recent years. Their annual costs are about one percent of what they would need to buy their own system — and then such a system would be much smaller than HLRS systems.

• M.A.R.K. 13 is a small company with a focus on media solutions in the field of handling and designing movies. With it 45-person staff, M.A.R.K. 13 is in a business that requires swift reaction time and extremely high quality. When approached to do work for the Australian-German animated movie “Maya the Bee,” M.A.R.K. 13 entered into a collaboration with HLRS to guarantee both high quality and in-time production of 3-D pictures for the 79-minute movie. Although the movie only required about one percent of HLRS resources, it could not have been done without high investment costs by such a small company. So, using HLRS resources not only helped to speed up work whenever necessary by adding more nodes, but also substantially reduced the financial risk for the customer.

The HPC achievements of these two businesses are being echoed around the world by SMEs such as Children’s Mercy Hospitals (Kansas City), Intelligent Light, Ping, SmartTruck Systems and hundreds of others.

What’s Next?
HLRS is not the only large center that works closely with SMEs and other industrial firms, of course. Germany’s two other national HPC centers, the Leibniz Supercomputing Center and the Juelich Research Center, also provide services to industry — as do national HPC centers and labs in North America, EMEA and the Asia Pacific region. Across the globe, government leaders increasingly recognize that HPC can boost industrial and economic competitiveness and SMEs can play a strong part in this transformation.

As a result, industrial partnership programs have been proliferating in programs at DOE’s national laboratories, Europe’s PRACE initiative and at leading HPC organizations including NCSA, Teratec, Hartree Centre, HPC Wales, KISTI, the Shanghai Supercomputer Center and others too numerous to mention here. A fair amount of this activity is directed at SMEs, which are the most numerous and, in some geographies, the largest enterprises.

SMEs will continue to get more attention, including additional research to illuminate some of the remaining dark corners of this market segment. IDC, for example, recently began what we believe will be the most ambitious effort yet to identify and characterize large numbers of these sites. And organizations, such as the Council on Competitiveness, the National Center for Manufacturing Services, NCSA’s Industrial Partners Program, PRACE, HLRS, Teratec and others are hard at work easing the transition to HPC for SME organizations.