Enterprise Driving SSD Market

Soaring memory prices have derailed efforts to replace hard disk drives (HDD) with solid state drives in laptops. Nevertheless, SSD use in data centers is growing and will drive a sevenfold increase in SSD market revenue this year, a research firm said.

Rising sales in the enterprise market is expected to drive SSD revenue this year to $883 million, up from $127 million last year, iSuppli said in a report released Thursday. Unit shipments will increase to 5.8 million unites, up from 1.4 million in 2008.

The dramatic rise in the cost of NAND flash memory, which accounts for about 90% of the cost of SSDs, made the drives uncompetitive this year with HDDs in notebooks. "However, for enterprise data centers seeking to expand their capabilities while lowering their overeall power consumption, SSDs remain an attractive option," iSuppli analyst Michael Yang said in a statement.

SSD vendors expect next year and 2011 to also be exceptionally strong years as data centers and IT computing infrastructures ramp up their adoption. In addition, corporate adoption is expected to drive down overall prices, helping to make SSDs attractive once again for notebooks.

Other elements necessary to drive SSD use in notebooks will have to come from vendors. Those include development of better features, increasing benefits over HDDs and stronger marketing campaigns, iSuppli said. All of this is important, given that SSDs are likely to always sell a premium over HDDs.

The total market for SSD will rise to $10.8 billion by 2013, a compound annual growth rate of 142.8% from 2008. Shipments will increase 115.6% to 65.2 million units by 2013.

Among the touted benefits of SSDs over HDDs are faster input/output operations, lower power usage, and smaller size. All these factors can help reduce costs in a data center, justifying the much higher price for SSDs.

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