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Meanwhile, industry analysts at Gartner and IDC haven’t deviated from their doom and gloom forecasts, blaming drive shortages for everything from the decline of the PC market to slowdowns in IT hardware spending, which they continue to insist will dominate 2012. Better information is coming from Wall Street analysts. During Western Digital’s earnings call, one gutsy guy made the observation that the financial success of both Seagate and Western Digital this quarter was likely a function of price gouging during an alleged supply shortage. When he asked Western Digital bosses whether they thought such high margins were sustainable, they declined to comment.
For all the hate directed at Wall Street these days, I kind of like this guy. Unfortunately, his question continues to go unanswered. Is the drive shortage manufactured to jack up prices? There’s little doubt there were some supply-chain interruptions due to the natural disaster in Thailand, but the impact is still influencing the game today? Really?
Perhaps everyone in the storage array food chain is using the popular theme of “Thai floods creating supply shortages” just to gouge consumers? It’s been done before . . . too many times to count. Remember the reports that came out after the last jump in gas prices, or after Hurricanes Andrew or Katrina, proving that everybody in the supply chain jumped on the bandwagon to raise their prices even though supplies were more than adequate? Could this
I worry that it might be. I worry every time I read an article that proclaims a big increase in flash solid-state drive (SSD) uptake as they become “price competitive” with disk drives. Or that certain array vendors are leveraging drive supply shortfalls to push obscenely overpriced deduplication or thin provisioning rigs.
Meanwhile, two of my disk drives are dead. No way am I paying a 400% markup for the same drives just because somebody is trying to make an extra buck on the backs of 800-plus dead Thais. There, I said it.
BIO: Jon William Toigo is a 30-year IT veteran, CEO and managing principal of Toigo Partners International, and chairman of the Data Management Institute.
This was first published in April 2012