After months of warnings, enterprise data storage customers are experiencing the effects of hard disk drive (HDD) shortages caused by last year’s floods in Thailand. The results include higher prices, longer wait times and limited availability of popular drives.
The floods caused roughly a 30% decline in HDD shipments in the fourth quarter of 2011 and spurred many data storage system vendors to raise prices by 5% to 15%. Now, the impact of the HDD shortages is trickling down to business IT organizations that need to purchase disks. Vendors and analysts say the shortages will be temporary, but some storage buyers say they fear the price increases will be permanent.
“I hope this isn’t going the way of gas prices,” said Dan Mulkiewicz, IT director at Carlsbad, Calif.-based High Moon Studios. “It seems like every time they [prices] go up through some perceived crisis, they never quite come down to what they were before.”
Mulkiewicz said he buys drives and installs them himself in his company’s Nexsan storage enclosures to save money. When he noticed 3 TB SATA HDDs for which he once paid $139 selling for $200 to $250, he pushed a planned 200 TB disaster recovery (DR) project off for at least six months.
Dean Flanders, head of informatics at the Friedrich Miescher Institute (FMI) for Biomedical Research, a division of the Novartis Research Foundation in Basel, Switzerland, said he once viewed the HDD shortages as “a bit of hype.” But that opinion changed in mid-January when his sales representative told him that the IBM TotalStorage DS3524 he ordered at the beginning of December wouldn’t arrive on schedule.
“The reseller said, ‘I can’t get those disks anymore. They can't give me any delivery date for the 1 TB nearline SAS,’” Flanders said.
The news surprised him because he had no problem getting three IBM Storwize V7000 systems with 20 TB of nearline (NL) SAS apiece that he had ordered only a week before the DS3524. FMI took delivery of the V7000s on Dec. 28, after its typical three- to four-week waiting period.
For the DS3524, a product IBM sells through an OEM deal with NetApp (by way of its 2011 purchase of Engenio from LSI Corp.), Flanders faced a decision. He could wait for the 1 TB 7,200 rpm NL-SAS disks with no guaranteed delivery date, secure the disks from a broker at a markup of 60%, or take 900 GB 10,000 rpm SAS disks in three to four weeks for the same price as the original NL-SAS order.
He took the 900 GB drives. “They’re faster and they’re usually about 25% more [in price] than the 1 TB nearline SAS disks, so that’s a pretty fair deal,” Flanders said.
He said changing a configuration wouldn’t be optimal under ordinary circumstances, but because the DS3524 is a new system for FMI, the substitution won’t present a problem. His main issue is placating the system’s intended users, who weren't happy about the delay. To tide them over, FMI expanded the group’s capacity in the Nexsan Corp. array they were already using by adding low-performance 2 TB SATA disks that were available from another project.
“We were really lucky that we had the spare capacity,” Flanders said.
Reports of delays aren’t isolated to a single vendor, reseller or channel. UCLA’s Institute for Digital Research and Education (IDRE) recently saw an expected two- to three-week delivery timeframe turn into an eight-week wait for 180 TB of direct-attached storage (3 TB SATA drives) from Hewlett-Packard (HP) Co., according to Scott Friedman, IDRE’s chief technologist.
IDRE’s new storage was intended for only a test bed of cloud storage, so the delay didn’t create a hardship. IDRE is also fortunate to have an ample HDD supply on hand, Friedman noted.
Planning for HDD shortages shows dividends
Companies with explosive data growth were wise to plan ahead. Provo, Utah-based Ancestry.com worked with sales reps to lock in quotes on Dec. 30, before EMC Corp.’s projected 5% to 15% HDD price increase took effect. The online family history site then accelerated the purchase of six EMC Isilon 36000X NAS systems, each with 36 TB of 1 TB SATA drives, and two Isilon 108NLs, each with 324 TB of 3 TB SATA drives.
Travis Smith, manager of storage operations at Ancestry.com, said the company normally plans only a quarter ahead. He decided to pull the trigger earlier this month after sales reps from several vendors warned him about potential price increases and product delays, especially for low-cost, high-capacity SATA drives.
Smith said one rep told him, “You’re looking 60 to 90 days out because we’re having problems fulfilling our hard drive [orders]. Once people started to realize the prices might go up and what not, that started a run on drives.” The vendor’s projected supply, in turn, plummeted sooner than expected, he noted.
Ancestry.com has encountered uncharacteristic delays in getting replacement drives for failed disks in both its Isilon and HP 3PAR systems from the support depots located in Denver and Salt Lake City. One three-day holdup marked the company’s longest wait ever, according to Smith.
“Some people got yelled at because that’s out of the SLA [service-level agreement] that we’ve paid for,” Smith said. “Luckily, the arrays are resilient enough and have enough redundancy that they can support multiple drive failures before we’re really in trouble.”
Storage pros may have to get used to the current drive situation. Stamford, Conn.-based market research firm Gartner forecasts that the HDD industry won't fully recover to pre-flood production capacity until the late third quarter or early fourth quarter of this year.
“For a certain period of time, it’s not going to be true that storage is cheap and available from viable vendors ‘anytime I need it.’ That’s not a good operating assumption for 2012,” warned John Monroe, a research vice president in Gartner's data center systems group.
PC and notebook delays
The HDD shortages and delays are expected to be worse for desktop and notebook computers. Adam Vogini, IS administrator at Trigon Holding Inc. in McMurray, Penn., had an immediate need for two desktop PCs, so he chose Dell Inc.’s “Ships Fast” preconfigured systems.
The PCs were due to arrive in two days with free overnight shipping. Instead, Dell contacted Vogini about a week later to inform him the systems he ordered were “on restriction” due to hard drive delays. The news was especially frustrating because Dell’s website had indicated the items were in stock and “should be sitting on the shelf,” Vogini said.
To get the PCs sooner, Vogini settled for similarly configured PCs with mini-towers that consume precious real estate in the company’s small office cubicles. On the plus side, Dell matched the price of the original order.
“They did try to make it right,” he said.
But Vogini still wasn’t happy. He had planned to buy more desktop PCs, but said he will wait to see how the HDD shortages shake out. He will also reconsider his decision to use Dell’s Ships Fast service.
“If I’m going to be forced to buy systems that I don’t want because of the hard drive shortage, then I’m definitely going to have to increase my lead time for purchasing computers and go with the customized ones and wait longer,” he said. “I’d much rather wait another few days and get what I want.”
But the wait could be longer than a few days. One university assistant purchasing director noted a recent two-week delay for a pair of custom orders. The school also had to change the disk drive for its standard desktop configuration from 320 GB to 250 GB to avoid major delivery holdups. The vendor lowered the cost to reflect the smaller hard disk drives.
The assistant computer purchasing director, who asked not to be identified, listed eight vendors that have notified the school either of HDD shortages or a price increase. Some have even sent photographs of flooded hard disk drive factories as supporting evidence.
“Those who buy our standard configuration are typically the administrative staff, so 250 GB is more than adequate for them,” the purchasing director said. “What would upset me is if the cost went up by a couple of hundred dollars to buy a system. That would have an enormous negative impact here at the university. Fortunately, I don’t see that currently [happening].”