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Monday, November 7, 2011

Plan now for serious hard drive shortages: Tips to reduce risk | TechRepublic


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Plan now for serious hard drive shortages: Tips to reduce risk

November 4, 2011, 6:19 AM PDT

Takeaway: Recent natural disasters have caused major flooding in Thailand, resulting in a hard drive shortage. Rick Vanover shares some tips to help mitigate exposure to the supply chain interruption.

If you haven’t noticed yet, there will be a serious issue in the availability of hard drives. This is because of the major flooding that has occurred in Thailand. While this natural disaster is incredibly unfortunate for the people of Thailand, we also will see the supply chain impacted significantly for hard drives and other subcomponents. Some ship dates at one of the largest server and storage brands in the US now list estimated ship dates after March of 2012.

In terms of news, one report puts production offline for the rest of 2011 and a statement from Seagate confirms that supplies will be short of expected demand. I had a chance to check with a few storage companies to get their perspective on this event, and there is a consensus that the impact will be significant. Drew Meyer, senior director of product marketing at NETGEAR told me that they have an inventory to go through the current quarter (Q4) of 2011. However, immediately, pricing for drives has increased as much as 70% in the last two weeks. Sourcing drives independently may become attractive to NETGEAR customers, as the ReadyNAS series of disk product have diskless options that allow the customer to source drives on their own if they choose and can purchase outside of the price fluctuations.

ioSafe, makers of ruggedized storage devices, had similar commentary. Robb Moore, CEO of ioSafe confirmed that this will have a widespread ripple effect in the industry. Moore further went on to say that some external hard drive manufacturers will have to exit the market entirely. Storage is a widespread market of systems with high margins as well as low-end solutions with rock-bottom margins; yet, they may use the same commodity disks underneath it all. Moore goes on to predict that higher-end (which command higher sales margins) systems will likely be less impacted by the supply shortage compared to external drive systems. Like NETGEAR, ioSafe has an inventory to cover the immediate future for their storage products.


Ok, thanks for the heads up! What next???


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