IBM Selected By Total To Build Supercomputer Pangea III

International Business Machines Corporation (NYSE:IBM) recently announced that it has been chosen by Total — a company that engages in global oil and gas production — to build Pangea III, the “world's most powerful commercial supercomputer.”

Pangea III is powered by IBM’s POWER9 processors and contains NVIDIA (NASDAQ:NVDA)'s GPUs. These features will enhance energy efficiency in the Total’s existing system and attain robust high-performance computing (“HPC”) and AI application performance, scalability and efficiency.

IBM’s Pangea III is based on the same system utilized in the U.S. Department of Energy's (DOE) Summit and Sierra supercomputers. The company has been associated with DOE for a long time, and the new project is part of it. The company provides advanced supercomputing and high performance computing solutions to the DOE to aid research across agencies.

Rising operating costs and pollution levels related to higher energy consumption is a major concern across the industry currently. With the new system, Pangea III, IBM aims to aid Total’s energy-saving project. Per the press release, Pangea III requires 1.5-megawatt (MW) of power, much lower than the previous system which required 4.5 MW for its operation.

Details

According to Total reports, the latest Pangea III utilizes less than 10% energy consumption per petaflop as compared with its predecessor.

Moreover, Total reported that Pangea III has the capability of becoming “No. 11 amongst all public and private supercomputers globally,” containing 25 petaflops computing power and 50 petabytes storage capacity.

The addition of Pangea III to Total’s latest high-end HPC platform bolsters the systems’ processing performance and scalability. The enhanced features enable the system to tackle computational problems related to the emerging field of AI, and subsets machine learning and Big Data analytics.

Growth Strategies

IBM is capitalizing on the rapid adoption of supercomputing systems, which is expected to be a key catalyst for the company. Per Technavio, the global supercomputer market is anticipated to witness a CAGR of around 9% during the period between 2018 and 2022.

This initiative is part of IBM’s focus on its Hybrid IT segment, which was formed and commenced operations in the fiscal 2018. It has been trying to concentrate more on high margin hybrid IT models that leverage on-premises and cloud computing power.

Per IDC, around 90% of the biggest enterprises worldwide are anticipated to adopt integrated hybrid and multicloud tools and approaches by 2024. IBM, with its expertise across these domains and restructuring initiatives is well-positioned to maintain its dominance in the market.

Bottom Line

Given the alluring capabilities offered by IBM's hybrid cloud infrastructure, the latest offering is likely to bolster the top line, consequently aiding IBM to compete better against peers. The company has been a pioneer when it comes to helping businesses digitally transform and evolve. The tech giant continues to bring innovation to services to aid the enterprises leverage emerging technologies, including the likes of cloud, AI, IoT, among others.

However, rising competition from Amazon’s (NASDAQ:AMZN) Amazon Web Services (AWS) and Microsoft (NASDAQ:MSFT) Azure in the cloud infrastructure services market is a headwind.

Zacks Rank & Key Picks

IBM carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology sector are Match Group, Inc. (NASDAQ:MTCH) and Autohome Inc. (NYSE:ATHM) , each flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Match Group and Autohome have a long-term earnings growth rate of 15.2% and 20.9%, respectively.

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