Data Storage and Management Costs Continue to Fall

The fact that the cost of data storage and the cost of managing it continues to decrease probably doesn’t come as a surprise to most people. What may surprise you is that there is so many factors contributing that the price decrease that it will probably start looking like the plunge in global oil prices.

Lets take a look at a few non-technical issues before we address the technical ones. First some of the mergers/acquisitions. Dell-EMC is the obvious choice but I think the cost reductions there will be mostly organizational redundancies. More importantly is the acquisition of San Disk by Western Digital. This puts them on equal footing with IBM and Seagate (their supplier is Micron).

From a technical standpoint, increases in capacity always drive down the cost per megabyte. The cost of  Solid State Drives (SSDs) has gone down due to the consumer side (laptops, tablets and phones) and the number of high end semi-conductor companies playing in this arena (Toshiba, Samsung and Intel). Additionally recording technologies such as Perpendicular Recording has increased capacities and packaging elements like air and hydrogen infused cases, which has improved the reliability of disk drives.

Movement into the cloud by Fortune 500 companies has also further reduced the cost. Allianz is in the process of reducing 140 data centers down to six. Additional companies are also consolidating and moving to the cloud as they have more faith in the security it has to offer. It is turning into a interesting battle between the likes of IBM, Amazon, Microsoft and Google for this business.

Add to all of the corporate business drivers and there are just as many consumer applications that drive cost down. With smartphones, tablets and laptops all having solid state storage, this provides the economies of scale for their enterprise products.

Facebook’s “Open Compute Project” is a simple, innovative and cost effective storage solution that will have OEM’s changing how they view storage arrays for a long time. With the push for inexpensive drives instead of rigorously tested disk drives, this alone is a game changer for HP, EMC, HDS and NetApp. Long gone are the days of a $3,500.00 ,600gb, 15k RPM drives when you can get the same drive for $350.00. Talk about a “Shot Across the Bow.”

Lastly the cost of data management has always been greater than the devices that carry it. The complexity has not and will not get easier. Though the consolidation of storage into the cloud provides for a common method instead of having to learn each storage vendors idiosyncrasies. It makes economic sense to manage the data and not manage the devices. This also changes the way that corporations archive and backup their data. With the cost of a Hard Disk Drives (HDDs) & SSDs still decreasing it makes no sense to ever use tape storage again. Even if the media cost less then mounting, locating and restoring data from such a slow medium it has enormous costs.

With all of these changes coming about there might be a few bright lights that will keep the industry from going over the financial edge. These storage behemoths will not go away quietly and they will fight to maintain margins. Storage is becoming more object oriented, unstructured, less file and structure oriented. When these object files are stored and retrieved it is necessary to encapsulated them with lots of metadata. This not only adds space but also latency to deliver these data objects with conventional HDDs. Thus the need for additional SDDs that can deliver objects at a cost that is still greater than conventional disk drives.

When these non-technical issues iron themselves out, the storage industry will get back to its normalcy of price decreases based on technology. After all data is doubling each year and who knows what that doubling factor can be. I do know that it is a brave new world if you are in this industry.