Are Disk Drive Vendors screwed (by flash)?

This topic was created by Chris Mellor 1 .

  1. Chris Mellor 1

    Are Disk Drive Vendors screwed (by flash)?

    Read Mike Shapiro's view that HDD vendors are screwed by flash (included bellow). What do you think?

    - Is Seagate clawing its way back?

    - Is Toshiba sitting pretty with NAND foundry and HDD manufacturing operations?

    - Can WD claw its way back?

    - Are hybrid SSHDs enough for the HDD vendors enabling them to effectively ignore SSDs?

    Chris

    ------------------------Mike Shapiro interview-------------------

    The disk drive vendors have been utterly screwed by mismanaging the disruptive force of solid state drives: that's the view of Mike Shapiro - lately a storage bigshot at Sun and Oracle.

    Mike Shapiro was a Sun Microsystems Distinguished Engineer, CTO, and VP of Storage for Sun and then Oracle. He is most recently a founder at a stealthy storage startup about which we know nothing. We spoke to Mike about his views on flash drives and the HDD suppliers.

    El Reg:Did the disk drive companies enter the solid state market in a timely manner?

    Mike Shapiro: Despite the emergence of STEC as the first enterprise SSD vendor in 2006 (when we first talked to them at Sun) it is remarkable to me that Seagate, HGST, and WD all failed to enter the SSD marketplace until 2011 (5 years later, by which time it was essentially too late). And when they did, they did the obvious dumb thing of pricing the SSDs above the 10k and 15k RPM drive lines - i.e. they made the classic error of thinking that they could solve a disruption by just organising their own revenue streams regardless of other market forces.

    El Reg: So what happened?

    Picture of Mike Shapiro, Bryan Cantrill

    and Adam Leventhal

    Mike Shapiro:As a result of this massive screwup, a raft of solid state drive companies entered the market, which in turn I believe spurred the NAND vendors to say, 'gee, if that's all it takes to mark up our NAND, surely we can do a better job of that'. Furthermore, the NAND companies are entirely staffed by ex-DRAM people whose major lesson in life was that DRAM was killed from a margin point of view by letting someone else (the x86 CPU) commoditise the interface to it. So the idea of keeping the deep NAND interfaces secret, building their own controller or firmware or drive, while doling these secrets out very cautiously, made sense.

    El Reg: Can you split SSD market development into phases?

    Mike Shapiro: So we really see three phases of the SSD market using the rear-view mirror -

    (1) STEC creates the market (first customers EMC and Sun)

    (2) Startups enter the market, partnered with the NAND suppliers

    (3) NAND suppliers become SSD suppliers, kill off startups (and STEC)

    El Reg: How did the HDD suppliers mis-read things?

    Mike Shapiro: How different it might have been if they (HDD suppliers) had acted in stage (2) Furthermore, the disk vendors assumed that all of their volume (i.e. small servers and laptops and desktops) would come from the 2.5in disk drive form factor for client [products] and would become the dominant form factor around 2009-10. But instead, thanks to cloud and tablets and iPhones, that entire transition has in fact been killed - the server market is in decline. All of the mobile computing and devices use 100 per cent flash, and so in fact the remaining use case for disks will be 3.5in (bulk storage).

    El Reg: Bulk storage disk drive sales prospects look okay though?

    Mike Shapiro: [Yes] thanks to the hyperscale customers like Google and Facebook and Apple, the market for bulk disk is now a direct sale (i.e. literally directly to the end customer) rather than an indirect one (through HP, Dell, IBM, Oracle etc). So we see an ability for the HDD guys to (temporarily) grow margin as they adapt to this opportunity, yet over the long term the opportunity to keep their position in the volume client storage device business has been entirely squandered.

    El Reg supposes that Shapiro's criticisms are directed mostly at Seagate and Western Digital. The third HDD supplier is Toshiba and it operates flash foundries in partnership with SanDisk. Seagate has just widened its flash storage offering with three SSDS and a PCIe card powered by Virident, and Seagate is now almost 10 percent owned by flash foundry-operating Samsung. WD has an investment in all-flash array startup Skyera and is expected to widen its SSD range soon.

    Can Seagate and WD catch up? Shapiro would think not. They are utterly screwed. ®

    1. TeeCee Gold badge

      Re: Are Disk Drive Vendors screwed (by flash)?

      Define "screwed".

      Last time around it was tape that was supposed to be screwed by disk archiving. Tape is still around and highly profitable, although less prevalent at the lower end of things than it once was.

      Behind the scenes and doing the heavy lifting, I would expect that the tiering will remain as long as solid state devices remain higher priced per Gb than disks. If you're talking about terabytes or more, why swap to using expensive flash when you don't have to?

      Remember here that not all data is access time critical. While it may well be important to wring the last picosecond out of the access to that database record, waiting a second or two while the first bit of that 3 hour film to be streamed is accessed is no big deal.

      When it comes to the client end of things, the other thing you have to factor in here is price. While at the lower capacities SSDs are becoming commodity items and desktops with small SSD boot disks are de rigeur, as soon as you want a few hundred gigs in your laptop you are in eye-wateringly expensive territory. Seagate have an ace in the hole here with their Momentus XT range, which give SSD like access to the frequently used smaller stuff, while also providing capacity without breaking the bank (Aha, there's that tiered storage again). It's a mystery to me (and probably a source of immense frustration to Seagate) why more laptops don't come with these as OEM fit, as the results in "real world" use are very impressive.

      1. Chris Mellor 1

        Re: Are Disk Drive Vendors screwed (by flash)?

        Me too TeeCee. I'd have hight hybrids (SSHDs) would be being taken up by tablet and ultra-thin notebook makers enthusiastically.

        Chris.

    2. Tim Parker

      Re: Are Disk Drive Vendors screwed (by flash)?

      "Are Disk Drive Vendors screwed (by flash)?"

      No. There is currently no one storage medium suitable for all uses, that much is surely obvious - the mix will change as it always has, new technologies will create new niches and infiltrate existing ones, old ones will present an effective usability advantage or disappear... wasn't it ever thus.

      "Can Seagate and WD catch up? Shapiro would think not. They are utterly screwed."

      Frankly, bollocks.

  2. tentimes
    Stop

    It's an interesting view. If they are getting screwed by NAND suppliers then the implicit understanding is that we should be getting cheaper SSD's.

    There was an initial flurry toward this with recent competition lowering prices, but are prices still artificially high? Maybe the EU competition commission sniffing around them might prompt some change?

  3. Anonymous Coward 15
    Joke

    So we'll see SSD and HDD at the same price per GB soon?

  4. Chris Mellor 1

    HDD vendor way back

    Your piece on the death of traditional HDD vendors is interesting, but I wonder if there is a way back for the likes of Seagate and WD? It seems to me that today we have something of a cartel on the supply of flash memory chips, as a result of which we see artificially inflated prices for emerging SSD drives (£350-£450 for a Samsung 840 Pro 512Gb, for example, which is many multiples the price of a top-of-the-range 2 or 3Tb HDD).

    This is because the emergent dominant players in this market are currently milking it for all they are worth. It's often the way, and if a market stagnates with 2 or 3 major players, we see little or no commercial pressure to innovate or reduce prices (think Microsoft in desktop, or even say Canon/Nikon in cameras, Nintendo/Sony/Microsoft in games consoles, etc,etc ).

    So a possible route back for Seagate and/or WD would be to purchase a Flash Memory fabrication plant and then run out a line of decent quality drives that seriously undercut the existing cartel. Give the market say 1Tb Flash drives for an initial £500 [aiming to drop to £400 when the inevitable fightback begins] and there's the chance of winning back market share.

    If they wanted to do this, Seagate/WD could fight back with say last year's SSD technology (one die size large fabbing, slightly lower clock rates) which may enable them to buy up fabrication gear on the cheap. They won't be able to compete with Samsung/Kingston/etc in performance terms, but as long as they offered a drive that was markedly faster than the best HDD and seriously undercut the cartel, they may succeed.

    The one thing SSD doesn't have today is a high-capacity drive. Samsung/WS could do it. Question is, after the relatively recent floods in Thailand, and the time, trouble and effort they undoubtedly put into recovering their HDD fabrication capacity, have they got enough left in the tank to scale up a serious SSD challenge. I suspect we'd learn that the flooding is a much larger factor here than merely being caught asleep at the switch...

    [Sent to me]

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