Enterprise Drive Shortages Cause Increased NetApp, EMC Drive Prices

According to the IDC, shortages will linger for high capacity SATA drives and Near Line (NL) SAS drives even as the supply of fibre channel drives recovers from the devastating floods in Thailand.

Such shortages will likely mean increased prices for NetApp and EMC drive customers looking to purchase hard disk drives when inventory levels remain low.

Storage analyst Fang Zhang, of HIS Global Insight, believes that enterprise drive prices will remain elevated until the end of 2012.

Shortages Affect NetApp, EMC Drive Price

In the fourth quarter of 2011, EMC and NetApp announced hard drive price increases of 5-15% as well as possible shipment delays. Price increases on EMC drives were announced across all product lines.

Nicholas Noviello, the NetApp CFO, believes that the company will see unpredictable enterprise-level NetApp drive supply levels and some lingering shortages for the next few quarters.

Fibre Channel Drives Will Recover Faster

The IDC expects that supply of high performance hard drives, such as fibre channel drives, will improve by March despite inventory constraints that have plagued the industry since December.

The 10,000 rpm and 15,000 rpm fibre channel drives and SAS drives will fare better in the recover process, according to market leader Seagate. Seagate says that relatively lower purchase volume and dedicated industry effort will help fibre channel drives to reach normal supply levels more quickly than SATA and NL SAS drives.

Shortage of SATA Drives Continues

The impact from the Thailand flooding will linger for business critical SATA drives and Near Line (NL) SAS drives. This segment of the hard drive market was heavily affected by the destructive floods that began last fall.

Shipments of high capacity drives dropped 18% last quarter, causing price increases for a variety of vendors including EMC and NetApp. The shortages will continue for high capacity drives, as the IDC estimates that the industry will be 2-3 million units short through the second quarter of 2012.

The impact of the Thailand flooding is evident for the UCLA Institute for Digital Research. The organization waited two months, instead of the typical two weeks, to receive 180 TB worth of SATA drives from HP.

IDC research VP John Rydning believes that full recovery won’t be realized until the middle of 2013, and that end users will continue to see shortages, delivery delays, and low inventory levels for high capacity SATA drives and NL SAS drives alike.


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