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China’s HPC Vendors Look to US and European Markets

In this special guest feature, Tom Wilkie from Scientific Computing World writes that China’s HPC vendors have designs on worldwide growth.

chinaWho are the world’s most important vendors of supercomputers, at least as measured by the number of systems they have in the Top500? HP is the leader with a 31 per cent share; Cray is number two with just under 14 per cent. So far, so unsurprising. But what has been little remarked upon is that in third place – with 49 systems, or 9.8 per cent of the Top500 list – is the Chinese vendor, Sugon.

And both Sugon and Inspur, the other main Chinese vendor, have their sights set on expanding still further, with trade missions to Europe and setting up partnerships and subsidiaries in both Europe and the USA, as senior executives of both companies explained in interviews with Scientific Computing World at SC15. Other analyses of trends from the event can be found at HPC: openness, chaos, or a split? and at Does the future lie with CPU+GPU or CPU+FPGA?

A lot has happened since Scientific Computing World’s August/September issue which reported on China’s developmental efforts in HPC in articles including; China: not one but two 100 Petaflop machines within a year?, An open invitation to work on the world’s fastest computer and Chinese Government kicks commercial companies overseas.

Inspur has 15 systems in the Top500 – about three per cent – which puts it in position eight, ahead of both Fujitsu and Dell. Lenovo, which took over IBM’s x86 business is accounted for rather eccentrically in the current list, with nine systems listed as IBM/Lenovo and, separately, five systems under the heading Lenovo/IBM. Huawei has two systems in the Top500. Of course, the rankings differ somewhat if the share of total performance is considered rather than number of systems, but Sugon and Inspur are still among the top ten vendors globally, when measured by performance.

European expansion

Sugon has just completed a trade mission to the UK, according to Lei (Joshua) Wang, the company’s vice president. “We will base our first office for Western Europe in the UK,” he said, “and we have chosen London for our European HQ. End-users understand our strategy and local partners are keen to provide services including maintenance and after-sales support.” Most UK customers are expected to be in universities or research centers in the first instance, he said.

Sugon has been involved in planning the layout of China’s national cloud computing ‘blue map’ and has built up dozens of city cloud computing centers, including those in Chengdu, Wuxi, Nanjing, and Baotou. It is therefore only natural that Wang should express Sugon’s interest in the ‘Smart City’ project being developed for Milton Keynes in the UK. Central to the ‘MK:Smart’ project is the creation of a state-of-the-art ‘MK Data Hub’ to acquire and manage vast amounts of data relevant to city systems from many data sources. These will include data about energy and water consumption, transport data, data acquired through satellite technology, social and economic datasets, and crowdsourced data from social media or specialized apps. The opportunities for Sugon are obvious.

Western Europe may well be approached through a partnership with Alcatel-Lucent Enterprise. In 2014, the Alcatel-Lucent Group, on the brink of bankruptcy, sold an 85 per cent stake in its enterprise division to China Huaxin Post and Telecommunication Economy Development Centre for 202 million euros (US$255.58 million). The company, which has been incorporated in France and is no longer part of the Alcatel-Lucent Group, is looking to grow through joint ventures, particularly, in software-defined networking and datacenter technologies. According to Sugon’s Joshua Wang, its technology is currently HP but, following the acquisition by Huaxin it is looking for different suppliers and so Sugon will set up a French center there too.

A bridge to the US market

We have plans to set up a US office early next year,” Wang continued. At the present moment, Sugon is not really focused on selling HPC systems into the United States. Although he did not articulate the reasoning behind this, it is clear that the US market is already dominated by many domestic players and also clear, at least to anyone outside the USA, that the US Government is not above using defense and security export controls to influence trade policy in high-technology in favor of its own industries.

But in the long run, “to expand globally we can’t ignore the US market,” he said, “so we could acquire or create a merger with US companies as a bridge to open the market in the USA.” In the interim, he continued: “What we want to do here is to know the trends of technology development, connect with service providers, and to connect with the upper levels of the industry.” A US presence would open the way, he suggested, to closer relationships with companies such as Intel, VMware, and Seagate.

Such partnerships are already happening. In October this year, Sugon opened a joint venture with VMware in China to use VMWare’s technology, albeit badged as Sugon, in products aimed at the Chinese market. It is not a small undertaking – the joint venture has more than 200 employees.

The news of Sugon’s cooperation with VMware prompted a US$2 jump in the company’s share price. Wang remarked that when the company was first listed on the Shanghai stock exchange in 2014, its shares sold at US$1 each whereas now the price is around US$20, ‘so these statistics tell you all you need to know about our stockholders’ confidence in the company. As far as Sugon is concerned, in Wang’s view, the recent turmoil on the Chinese stock exchanges represents only an ‘adjustment – a return to realistic valuations’.

Inspur and Intel cooperate on technology

Inspur has already created close links with US companies, such an Intel. The two companies took the opportunity of SC15 to launch, jointly, a new converged architecture blade server system, which they claimed was the only blade server system in the industry to flexibly support 2-, 4- and 8-way nodes. It is envisaged as a solution for enterprise-level cloud data centres and, at the same time, offering high density and low power consumption.

All the Chinese supercomputer vendors are broadly based technology companies, in the sense that they are interested in the business and enterprise markets as well as the high-end technologies of supercomputing. In this respect their commercial strategies mirror those of US companies such as IBM, Dell and HP, rather than that of Cray, which focuses solely on the high-end sector.

Inspur US links are more developed than just technology cooperation with companies such as Intel. At SC15, Inspur stressed that, in the United States, its servers have been operating for some time for internet customers. According to John Hu, vice president and chief technology officer, the company has already established local production lines in the USA to serve its customers there, and has offices on the west coast of the USA: a technology research and development centre in Silicon Valley, and a worldwide services office based in Seattle.

Hu continued: “The storage and server market in the USA is the most important. We have to be here.” Inspur’s global development strategy started last year, in 2014, he continued and was very important to the future of the company. It sees Huawei as one of its competitors.

Smart cities are also on the Inspur roadmap. In September, the company signed a strategic cooperation agreement with the US telecoms technology company Cisco to set up a joint venture in China with an initial investment of US$100 million. Part of its mission will be to provide advanced technology, products, solutions and services for cloud centers, smart cities and big data.

On the technology side, Inspur has also developed an interest in FPGAs as reported in Does the future lie with CPU+GPU or CPU+FPGA? The future, for Inspur, could be heterogeneous computing for HPC, but using a CPU+FPGA system, rather than a CPU+GPU architecture.

This story appears here as part of a cross-publishing agreement with Scientific Computing World.

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