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Alexandre Mesguich

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Alexandre Mesguich runs the Enterprise Research division at Context, covering channel management services for the Storage, Servers, Networking, Security Hardware and Software industries.
By | Alexandre Mesguich 2nd September 2013 10:26

Thought biz would NEVER go for pricey flash storage? Think again

Hard disk sales dropping off? Time for some proper margins, channel

The benefits of flash memory-based solid state drives (SSDs) have long been trumpeted. Better performance, lighter, quieter, lower power consumption and altogether greener than their hard disk drive (HDD) cousins, the only real barrier up until recently was price.

One or two years ago SSDs could cost 10 times as much as an HDD. Over time prices came down and SSDs began creeping into consumer laptops and desktops, where we reckon they now offer a 30 per cent performance improvement. Now enterprises are realising that similar benefits could transform their cloudy, virtual data centres – offering a fantastic sales opportunity for the channel.

First, the stats. According to Context research the total market for SSD unit sales grew by 127 per cent in Q1 2013, from the same period the previous year in western Europe. The market for enterprise sales was lower, growing 51 per cent over the same period, but this is still significant – and it is forecast to continue growing by around 60 per cent until 2016.

These impressive figures are mainly the result of SSD street prices, which have generally been declining: supported by NAND price declines, a move from SLC to MLC-based flash, as well as well as other cost weaknesses precipitated by SSD controller technology maturing.

In Q1 2013, the average selling price (ASP) for enterprise SSDs came down 21 per cent year-on-year, while price-per-gigabyte was down 43 per cent, as more and more NAND found its way into clustered low cost servers, hand-held devices and cloud service provider environments.

So, what’s driving enterprise adoption? For the most part it’s the usual suspects: virtualisation and cloud computing. With workloads spread across multiple nodes on a server in a virtual environment, HDDs require access to multiple blocks of data on the same disk, which is not necessary on SSDs. In the case of heavy workloads which need fast access to data, HDDs can therefore cause data bottlenecks, unlike SSDs.

SSDs and flash arrays can also manage the kind of cloud environments in which large volumes of users need to access different instances running in the same data centre at speed. SSDs are power efficient, quick and with a low physical footprint – ideal not only for cloud giants like Facebook and Amazon but increasingly a large number of enterprises building their own private clouds.

How can the channel benefit from all this? Firstly, there’s an opportunity to work with existing original equipment manufacturers (OEMs) such as Dell, HP and IBM to help meet end-customer demand to upgrade to an SSD-based infrastructure. Much greater potential lies in cultivating relationships with the original design manufacturers, however – the likes of Kingston, Micron and Intel which actually make SSDs.

Given that many enterprises are looking at building their own private clouds, they may not want to go with the likes of HP or Dell. Instead such firms may build out their own low-footprint, green data centres and buy in components from the channel. Unless you’re an Amazon or a Facebook, only the channel will supply the requisite reach and breadth of offerings required.

There’s a significant cost benefit to doing this: original design manufacturers (ODMs) are likely to offer SSD solutions for 25-30 per cent less than the OEMs. The appearance of decent enterprise quality SATA interface technology is also making it more affordable for the channel. Although there’s an opportunity for growth here, it will need a push from the ODMs to create a channel program of training and education around their offerings to compete against the storage system OEMs, where customers continue to pay a premium for integration, configuration, optimisation and support services.

But this learning curve isn't necessarily a bad thing. Once upskilled to sell these solutions, channel partners can really tap those business drivers and the undeniable technological benefits of SSDs to increase sales. This isn’t to say that HDDs are heading for the scrap heap; far from it. They will still have a place in certain use cases – storing large amounts of inactive data, for example. However, SSDs, like 10GbE pipes, are likely to meet an increasingly common need to support organisations’ social, cloud and big data requirements. ®

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