2012: Flash To Supplant Disk?

It looks like 2012 could be a very big--if less profitable--year for the flash/solid-state storage industry, which should translate into good news for enterprise customers and not-so-good news for disk vendors, at least until the summer. Expectations are for a glut in flash and continued shortages in disk. For the second half of 2011, hard disk drives were predicted to account for 71% of the enterprise market, up 0.9% from the first half of the year, while SSDs were forecast to shoot up 61% to $1.35 billion from $843 million, according to IHS-iSuppli. A number of analysts expect that 2012 will see this move to flash accelerate.

Next year will see more solid state usage, not just volumes, but it will be used in more places by more users for more applications, says Mark Peters, senior analyst, Enterprise Strategy Group. "The overall [modus operandi] for solid state will turn from an app-specific fix to a more general turbo-boost across the storage infrastructure. Solid state will become more normal, whether as standard component in storage systems, or as the key component in new storage systems, whether all-flash or hybrid."

Peters says everyone will finally get used to the idea that most of the basis for the increased adoption of solid state is--surprisingly, perhaps--economic, because the performance of solid state usually allows an economic improvement elsewhere. (Less short-stroking, for instance is the obvious example). "For most users and apps--there are always edgy exceptions--the raw performance of solid state exceeds what they can realistically use … however, it is that very performance that frees them to make other changes that deliver economic value, both in their storage/IT and for their business."

When it comes to solid state disk, users should be looking for the simplest way to implement the technology in their environment, says analyst George Crump, founder of Storage Switzerland. "The time for detailed analysis of the environment has past, as has the availability of IT staff to perform such a study. The technology is cost-effective enough that almost every data center can benefit in some way. This lack of analysis, though, means looking for solutions that can provide cost-effective but broad access to the flash-based storage tier. This includes caching systems, auto-tiering storage systems and VMware environments leveraging storage and vMotion to migrate performance sensitive VMs to highly available solid state appliances."

Jim Bagley, senior analyst and business development consultant, Storage Strategies Now, expects 2012 to be a very turbulent year in the solid state drive business. "First, the shortage of hard drives due to the disaster in Thailand is going to be a huge factor that flies in close formation with a predicted glut in flash memories, particularly at high capacities in 34, 25 and 20 nanometer lithography. Depending on how long the shortages in the HDD business last--the most optimistic forecasts say that production will be back to the levels of last summer by next summer--and if a flash glut materializes--there could be a boom for SSD manufacturers who can compete at a closer cost per gigabyte or even lower cost per gigabyte in high-performance HDDs."

He says OCZ Vertex 2 drives are currently selling at Newegg for about 90 cents per gigabyte--a new low--and definitely is reflective of the drop in flash prices in early November because OCZ has a very nimble supply chain. "To state the converse, however, if there is a big move to SSDs in client-side products, the flash glut could likewise turn into a shortage, particularly if the shortage of HDDs stretches into the third and fourth quarters of 2012. Keep in mind that all of the flash production in the world represents a tiny fraction of the HDD production capacity in terms of gigabytes."

The flooding in Thailand is not the only economic driver for SSDs, notes analyst Jim Handy, Objective Analysis. NAND flash (as in SSD) fits into the memory/storage hierarchy for two reasons: SSDs are cheaper than DRAM but more expensive than an HDD; and SSDs are slower than DRAM but faster than an HDD. However, this summer saw SLC NAND prices increase while DRWM prices plummeted. "SLC is now selling at $5.20 per gigabyte while a gigabyte of DRAM sells for as little as $2.40."

He expects this will reverse over time, and the upcoming NAND flash glut should force SLC prices back below those of DRAM. But for the time being it will usually make more sense to add DRAM to a system than it would to add an SLC SSD. "DRAM will only be less expensive than SLC SSDs, which are the creme de la creme of today's products. MLC SSDs will forever be more economical than either SLC SSDs or DRAM."

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