Rotating Hard Drive Storage is Alive and Well!
Now I hear that hard drive storage is dead or dying due to the emergence of solid state technology. The hard drive industry is compared to the typewriter industry. What a load of malarkey! I believe just the opposite, there has NEVER been a better time to be a hard drive manufacturer, or hard drive supplier, than right now.
First, let me say that I acknowledge that solid state is taking over mobile devices. Consumers value battery life length, laptop weight and speed more than large storage so laptops are quickly moving to SSDs and away from HDDs. Second, many servers have better functionality with solid state drives than hard drives.
What does all that mobility mean to the consumer? It means that they are enjoying, creating and consuming content at a rapidly increasing pace. This content does not sit idle but is shared and STORED by multiple users. That storage is done on hard drives! I have one friend that talks about backing up his photos, music and videos to “The Cloud.” I explained to him that the cloud is nothing but a cold room that has thousands upon thousands of enterprise hard disk drives that are constantly spinning to save and retrieve information.
What about those servers that have better functionality with a SSD than a HDD? Absolutely, when a consumer does a search on Google, the answers come back faster because there is a SSD handling the search. However, when the search comes back with a video file to watch, an article to read or a presentation to study, the hard drive holds the answers. As consumers, we want that speed to provide the path to the answers but we need that enterprise storage to maintain the answers.
I used to say that the hard drive industry’s theme song was “Ship of Fools” due to myopic focus on share. Pricing was just a lever to ensure that share was maintained. Procurement teams knew that their TAM was prized, so they let the HDD manufacturers, and hard drive supply chain, battle each other with price as that was their only weapon. Now, with limited HDD manufacturers, price is coveted to sustain profit for the manufacturers. Manufacturers now realize that a balanced supply/demand market allows for the greatest price stability in HDD history! Gone are the price wars…hopefully never to start again.
Some will say that the price stability hurts consumers – nonsense. I doubt that many consumers could have imagined quality laptops at under $400 or a 2 TB back-up solution sitting on one’s desk for under $100. Consumers should be thrilled that WD and Seagate have the margins to continue to complete the research necessary to develop products that will store the massive amounts of content that will be created and shared over the coming years.
Finally, techies are the ones highlighting the demise of the hard drive but Wall Street certainly is not. In the last three years, Seagate’s stock has gone from approximately $10/share to $59/share while WD has gone from $25/share to $97/share. WD and Seagate stock prices have more than quadrupled in value while “glamorous” high tech stocks have barely doubled! The HDD money trail shows a very healthy industry.