The Eternal Question
A quick diagram I just threw together…
If disk areal density is increasing at rates of almost 100% per year (i.e., you can pack more data on a drive platter), and if cost per GB of disk is decreasing at an annual rate of about 50% per year, then why is the price of an array increasing at about 135% annually?
Pick from the following:
- Vendor greed: putting worthless crap on arrays to sustain their mark-up and lock in consumers
- Channel greed: marking up the mark-up (and ignoring cheaper products that don’t give them enough margin)
- Analyst greed: accepting money to justify the mark-up (or to pretend that they don’t notice)
- Wall Street greed: demanding quarterly earnings acceleration as a matter of routine (an idiotic hold-over from the dotcom days)
- VC greed: demanding a 10X return on investment and eschewing “organic growth” potential in alternative technologies or consumer-centric delivery models
- User greed: demanding more capacity (whether they need it or not) then filling it with crap
- IT management laziness: “I’m almost retired, why bother to manage data?” (Or, “why boil the ocean, when I can get away with managing vendors rather than tech itself?”)
- Because we let the vendors get away with it.
- All of the above.
October 30th, 2005 at 9:10 pm
Jon, interesting stats. And pointing out The Man’s greed is always good fun.
One more reason why storage is so damn expensive is that the big vendors like to lock in their customers with custom hardware. As you know, there is a trend with the smaller companies to develop storage software for standard x86 hardware. I think this is going to be pretty disruptive.
BTW, I referenced your posting in mine: http://storageadvisors.adaptec.com/2005/10/30/its-the-software-stupid/
TT
October 31st, 2005 at 11:03 am
I couldn’t agree more, Tom. It is relatively easy these days to build effective storage building blocks with the same parts as vendors (save for the proprietary controllers) using x86 motherboards as backplanes and MS, Linux, or BeOS kernels.
Does this displace products like TagmaStore or DMX or Shark? Nope. But these products are not appropriate for SMEs anyway, and the SMEs are showing all the growth in storage product purchases.
What I see happening is that the SMEs want to drive cost out of storage hardware by capturing the commodity pricing of the underlying array components. They prefer to buy their value-add software on an as needed basis, rather than having it bundled into arrays themselves — thereby jacking up prices.