Was the HDD Crisis Fake?

there are other factors that influenced the cost of drives behind the scenes, had nothing to do with supply.
 
Are any of you surprised? Corporations do this all the time. Will always continue to do so as well.
 
Are any of you surprised? Corporations do this all the time. Will always continue to do so as well.

Do what? Charge whatever price the market will bear? It is not just corporations, but just about everyone who does that. You don't see people on ebay saying that they will accept the second or third highest bid.
 
Do what? Charge whatever price the market will bear? It is not just corporations, but just about everyone who does that. You don't see people on ebay saying that they will accept the second or third highest bid.

I think he means illegally collude to price fix.

Flat panels: http://money.cnn.com/2011/12/27/news/lcd_panels_settlement/index.htm
RAM: http://en.wikipedia.org/wiki/DRAM_price_fixing
Disks: http://www.justice.gov/atr/public/press_releases/2011/275738.htm

It's easy to subvert free markets when your company is one of 3-4 that control the world's supply of a commodity.
 
Do what? Charge whatever price the market will bear? It is not just corporations, but just about everyone who does that. You don't see people on ebay saying that they will accept the second or third highest bid.

However, you do see certain ebay auctions where they have stealth biders that are doing nothing but pumping the price. While your logic is reasonable, reality is usually not as reasonable.

The question is very simple "Are HDD manufactuers breaking the law by taking advantage of pent up demand and the ability to control supply". The only way the answer can be yes is If they "did so by working together". The good thing is that laws also cover for collusion via observation (e.g. if I see somebody else raise their price, so will I).

Will there be an investigation. Maybe. It depends on how long these prices stay where they are. If they stay this high by Q4-2012...then I think some DA might have a big enough case to try and bolster their political carreer.
 
It's easy to subvert free markets when your company is one of 3-4 that control the world's supply of a commodity.

It is not a free market if people are not allowed to sell their property at whatever price they choose. Setting the price you want to sell at is not "subverting".
 
By the way, prices *are* dropping. Maybe not as fast as we'd like, but at least in the segments I'm interested in, there's a downward trend. For example before the crisis 2TB "green" drives were down around $80 USD or sometimes as low as $60 on sale. Then they shot up to well over $200, IIRC, and for the past couple of months have been hovering around $160. Looks like the prices at Newegg are right now around $120-$130 for the Samsung and WD models.
 
It is not a free market if people are not allowed to sell their property at whatever price they choose. Setting the price you want to sell at is not "subverting".

Free market does not mean what you think it means. In a free market prices are set purely by supply and demand. The word "free" does not mean that players are free to do whatever they want. Some actions undermine the ability of the market to set prices via supply and demand so those things must be prohibited in free markets. This is basic high school economics.
 
Free market does not mean what you think it means. In a free market prices are set purely by supply and demand. The word "free" does not mean that players are free to do whatever they want.

You are confusing a free market with an idealized market. A free market does indeed mean that participants are free to make voluntary transactions, free of coercion.

You are thinking of an idealized market, where there are many suppliers and consumers, none of whom have the ability, by themselves, to cause a large shift in the supply or demand curves.

Some actions undermine the ability of the market to set prices via supply and demand so those things must be prohibited in free markets. This is basic high school economics.

Actually, no it is not. Economics is, among other things, the study of how markets behave in various situations. Economics says little or nothing about whether things "must be prohibited". That would be politics, not economics.
 
By the way, prices *are* dropping. Maybe not as fast as we'd like, but at least in the segments I'm interested in, there's a downward trend.

I've noticed this as well. Prices have been coming down for the past few months.
 
You are confusing a free market with an idealized market. A free market does indeed mean that participants are free to make voluntary transactions, free of coercion.

You are thinking of an idealized market, where there are many suppliers and consumers, none of whom have the ability, by themselves, to cause a large shift in the supply or demand curves.

Actually, no it is not. Economics is, among other things, the study of how markets behave in various situations. Economics says little or nothing about whether things "must be prohibited". That would be politics, not economics.

Friedman tried to redefine free market to mean what you're saying. The Laissez Faire crowd picked it up and ran with it but that doesn't mean that his revisionist definition is now the correct one.
 
I have no doubt that the companies were affected but seeing as how there are a plethora of cloud backup providers who are constantly buying HDD's, as well as a serious upsurge in enthusiast home mass storage I'm fairly certain that every advantage was taken... :rolleyes:
 
2TB of cloud storage rents for about $500/month. You can probably find it cheaper.

But ...

If guys can rent out space for that amount, they are willing to pay more than I am for storage and that will force prices up. No need to price fix. Just sell the drives to the guys who are making a profit on renting them out.
 
2TB of cloud storage rents for about $500/month. You can probably find it cheaper.

But ...

If guys can rent out space for that amount, they are willing to pay more than I am for storage and that will force prices up. No need to price fix. Just sell the drives to the guys who are making a profit on renting them out.

2TB worth of 1TB RAID6 drives, a linux PC using low end hardware, OpenVPN, and OpenDNS doesn't cost more than about two months of that cloud rent even WITH the inflated hard drive prices :eek:.

Oh yeah, plus you have the added advantage of not giving your data to Google or Amazon or having to deal with bandwidth caps :D.
 
Do not think this was made up. I work in I.T. for a large company. I purchase HP hardware from CDW on a regular basis. Certain popular HP server hard drives have not been available PERIOD for several months. Worst example is the 146 gb 15K sas 2.5" drive. I had 19 of these drives on order since I think January and they just got here at the end of April. This is from CDW, who is the absolute largest HP reseller and if they have trouble getting certain drives, everyone else is definitely in the same boat. A lot of laptops were also on backorder and many were getting 250gb drives swapped with 750gb drives at no charge. Many of those after the swap, did not meet the "Energy Star" requirements but this wasn't passed on to the buyer.

Several months ago, I was told by a person (someone I spend $300K-$400K with every year) that you should stay clear of refurbs for a while. They were sending DIVERS into some of these factories to pull out stock and they were sold as "refurbs"... No idea if that's true - but if you think about it they should have stayed dry in those sealed static bags.

So it's definitely not made up. Whether certain companies are going to take advantage of you and keep overcharging and reducing warranties long after the factories are back on their feet - it's certainly believable.
 
This is probably old news, but I noticed it as I need to buy some new hard drives.
WD and Seagate both reduced their warranties.
All I buy are WD's and sure enough only a 2 year warranty. :( So far the enterprise versions are retaining the full warranty terms.

According to the companies it's not due to the flooding LOL....but to focus on
resources into improving technologies, support and reliability, but did not elaborate.
LOL...hows is reducing your warranty improving reliability? That means you are less confident in your product and are afraid it will fail more quickly, so you reduce the warranty period.

http://bits.blogs.nytimes.com/2011/12/20/seagate-wd-storage-warranty/

Sucks for your average consumer drives. Only 2 years for WD now. and a crappy 1 year :eek: on some Seagates. Seems most drives are reduced to 3, which is still not too bad, but still, that's huge, as Seagates always had a nice 5 year warranty on all drives. Something is fishy.
 
I bought from J&R a Hitachi portable 500gb for $59.99
Prices did go up, and now a 500gb goes for $89. Which is same prices a non-portable 500gb went for.
However, prices for 8gb USB drives and SD cards went down.
 
That means you are less confident in your product and are afraid it will fail more quickly, so you reduce the warranty period.
has more to do with the length of time they dedicate to continually building older drive models and stream lining the back end supply chain.

they want to get closer to what intel is doing with its CPU/platform refreshes. that is much more difficult to do when you have to keep building drives to service RMAs for 5 years.
 
they want to get closer to what intel is doing with its CPU/platform refreshes. that is much more difficult to do when you have to keep building drives to service RMAs for 5 years.

That might be believable if we were talking about going from 5 years to 3 years. HDD technology is not moving so fast that they cannot support a product for 3 years.

But many models got reduced to 1 or 2 years warranty. That is absurd. I refuse to buy an HDD with less than a 3 year warranty.
 
Its cool, I bought SSD's instead. So really the joke is on them.

personally i think it was done on purpose to move us all to ssd. Because now ssd prices make sense when before they didn't.
 
That might be believable if we were talking about going from 5 years to 3 years. HDD technology is not moving so fast that they cannot support a product for 3 years.

But many models got reduced to 1 or 2 years warranty. That is absurd. I refuse to buy an HDD with less than a 3 year warranty.
part of the reason it isnt moving faster is BECAUSE they have 5 year product cycles. you can't entirely convert a factory to new stuff if you have to keep making older drives.

NOTHING has changed with hard drives. they either will work for X amount of time or fail. I have 15 year old drives that still function just fine if i wanted to plug them in.

drives aren't magically less reliable by dropping the warranty periods.
 
personally i think it was done on purpose to move us all to ssd. Because now ssd prices make sense when before they didn't.

so, seagate and western digital are trying to move sales away fromthem and towards the myriad of SSD vendors? brilliant.
 
part of the reason it isnt moving faster is BECAUSE they have 5 year product cycles. you can't entirely convert a factory to new stuff if you have to keep making older drives.

NOTHING has changed with hard drives. they either will work for X amount of time or fail. I have 15 year old drives that still function just fine if i wanted to plug them in.

drives aren't magically less reliable by dropping the warranty periods.
No, but they can release Rev. 2 of drive X where they can replace a tiny part from $less_shitty_company with one from $shitty_company costing $0.01 less because it only lasts 1 year instead of 3.

If the drives were really the same, why make such a damaging move that lowers your reputation enormously?
 
you're not listening or you're a complete moron.

if you have to produce a product for 5 years and you have X number of facilities to produce drives in then anytime you come out with a new drive you have to support it for 5 years minimum.

do you not understand how this makes it more difficult to roll out new drives at a reasonable rate?

i'm not saying we didnt get fucked in this whole 'crisis' thing we absolutely did. i'm saying we're asking them to not only roll out increased capacities at a break neck rate but also to support them for 5 years when in the enterprise space tax laws allow us to depreciate hardware over 3 years so if we're talking enterprise you should be refreshing your drives every 3 years anyway, wiping them, and selling them on ebay. presuming whatever it is you do doesnt force you to shred the drives.

in the consumer world, w/e who cares. you should be backing up all your critical stuff to various cloud services, at least one local copy, and if you're real smart at least one monthly optical or tape. if you lose data its cause you're an idiot not because a drive failed. they're so inexpensive these days it is youre own fault for not refreshing every other year anyway.

hard drives either die right away or fail MUCH later and in most cases power events are the main culprit.

if you really think someone is going to risk the wrath of the internet by purposely making drives with inferior components that fail regularly you're a moron. IBM pioneered liquid bearing tech with the original deskstar line. don't look now, everyone uses liquid bearings now they just were the first to do it and had some major issues. remember the negative press around that? you really think someone is going to purposely risk bad press like that?

stupid.
 
Because there was a massive shortage of disks, and instead of having a certain percentage of your stock tied up in "warranty possibles", you can sell it, to counteract an even larger price spike.
 
part of the reason it isnt moving faster is BECAUSE they have 5 year product cycles.

That's absurd. Offering 3 year warranties instead of 2 or 1 year would not slow down releases of newer technology hard drives.

You are pretty quick to call other people morons, but I see you posting several things that are just wrong.
 
so again, you don't understand how having a finite amount of resources to produce drives combined with a 5 year cycle in which you have to produce said drives makes it more difficult to roll out new drives?

you really don't understand that?
 
Geez, quite a few conspiracy theorists and alarmists in here.

It's actually quite simple, though it needs to be fleshed out a bit.

When word hit of the flooding many companies including my own started to buy up drives that we had projects pending for, along with capacity to hit our normal run rate for the next 2 quarters (hey, we would have probably bought more if it would have made sense financially). I personally ordered 300-400 1TB drives...as well as a bunch of 2TB and 3TB drives. I had calls in to some of our larger clients the day we found out about the flooding recommending they buy drives they think they will need for spares or projects they might need a few drives for. Most took advantage. I remember one client that had $2600 worth of spares they wanted to order. Their procuremet dept dragged their feet, and by the time they ordered the drives, the price was $4500 (not us, they bought drives elsewhere due to contracts, but they're still my client so I let them know).

Again, we weren't special by any means. Most companies did the same thing and this is what drove the initial drive up in price. Supply was there already, but it was like a run on the banks and there wasn't really enough supply to adaquately cope with the immediate rise in demand.

About 1-2 weeks after the flood hit we started to see a steady creep up in prices as suppliers/distributors started to get a little worried as their stock was dwindling, and they realized that the shipments they were getting were going to cease worst case, or shrink considerably best case. Some refused to sell stock because people were calling constantly trying to buy up a ton of drives and then resell them on ebay/amazon/etc. I talked with a pretty decent sized OEM of storage appliances around this point to discuss the next quarters potential for orders and availability. They said they had enough drives for 1-2 months, after that they planned on focusing on thier chassis manufacturing business becuase they just couldn't find drives at decent prices. They were in an uncomfortable area of the market...not big enough to get decent direct buys from WD or Seagate, but they weren't small either...they're usual demand would clean them out pretty fast.

Eventually prices climbed to a point that made it impractical to buy large quantities of hard drives. I can remember a 1TB drive costing (not retailing) for over $150-$160, 2TB and 3TB were bad, and Enterprise SATA or SAS was just outlandish. Entire storage servers went up by more than $5000+ in some instances where you had 24 large capacity drives.

At this point Seagate went to all it's major customers (and some of Western Digital's now desperate customers) and renegotiated their contracts with them. They basically said, if you want a constant flow of hard drives, we can do it, but it is going to be more expensive per drive. If I was in their shoes, I sign that contract without blinking. In the channel WD and Seagate both were raising prices on drive shipments to distributors, and shipments had stopped or slowed waaaaayyyy down. But at this point, large percentages of drives were going to supply the large Tier 1s and OEMs..not the channel.

Around this time you saw one of three things when you went to buy a drive at retail. Some companies sold drives at their original prices (Best Buy did this for awhile). Some companies sold them at what I would have considered a decent price for the time (thank you for at leat lubing up before bending me over). And some companies were selling them at what it would cost them to buy the drive again, simply allowing them to retain some drives instock. Yes you also had the people on ebay just cranking the prices up too (can't avoid them on any hard to find product, but hey, if you needed it you could pay for it)

One of the rumors floating around at the time was that at some point price won't matter because you won't be able to get the drives you want. I know there was a time where we cut off the buying of any drive because we felt the ceiling for drive prices had been reached and they would come down (and we wouldn't want ot be stuck with drives we paid too much for.)

Between then and now, it was beg, borrow, and make any deal you could to get drives in any kind of quantity. Certain Enterprise SATA and SAS drives were still non-existent while desktop drives started to flow back into the channel, and as each new shipment arrived, prices trickled down.

Currently, while pricing for desktop drives hasn't returned to pre-flood levels, inventory in the channel is pretty much at a point where you don't have to freak out if you need 40-50 drives at one time. Yes, certain drives are still hard to get, but 1TB, 2TB, 3TB drives are cheaper and instock, and 7200RPM notebook drives are available in pretty good quantities and capacities.

Enterprise is still hit or miss. Certain drives like the Seagate 1TB 2.5" drives are very hard to get. Really any 2.5" drive in enterprise SAS or SATA are hard to find in any kind of quantity, and when you do find them, they will probably not be there when you take a second look. BUT, that's improving as well. 1TB enterprise SATA are available pretty much all the time now and at decent prices.

I have been to two conferences in the last month where both WD and Seagate spoke and both mentioned that drives are still short shipping in quantities in the 10s of millions of drives. Charts show what I have detailed above...things are getting better...but they still need a quarter or two ( or three :D) to catch up.

One pleasant surprise through all of this was Toshiba. They found themselves in a unique position of being barely affected by the flood, and they didnt have huge contracts in place with large OEMs that would suck up their stock, so their Enterprise drives have been a nice option as they have been available when others have not.

Just be thankful that a lot of you guys had the choice to not buy drives at the higher prices...you could make that choice and life would go on. But for a good many people, it was business threatening. There was a lot of fear and anxiety, and a lot of people lost a lot of sleep over it.
 
Because of them. SSDs are now around $0.60/gig. Lower than ever. Keep charging astronomical prices for drives that are good for only keeping music and videos on by todays standards. I actually reinstalled an image of my PC onto my Samsung spinner just to feel it again and OH MY GOD felt like I downgraded my PC 3 generations of hardware.

SSD for ever for me until the next best thing comes out.
 
It wasn't fake, but the price was over-inflated. Like it said, nothing EVER went out of stock, which is BS if there was an actual shortage. It was just companies taking advantage of a disaster. I responded by not buying a mechanical drive since pre-tsunami, and I wont until 3TB is in the $100 range.

You just weren't a customer for the drives that were either under severe constraint or flat out unavailable. Drives did go out of stock. You could not buy a 900GB 2.5" SAS drive in November/December/January...not from normal sources. IF they were available, it was a handful, and they were being massively marked up by ebay sellers or people selling through Amazon affiliate type accounts.

The demand for Enterprise class storage so far eclipses the demand from the consumer market it's not even a fair comparison. You think Amazon, Microsoft, Google, etc use consumer drives in their data centers? How about EMC or Netapp, desktop drives in their storage solutions?

Drives did get impossible to find.
 
so again, you don't understand how having a finite amount of resources to produce drives combined with a 5 year cycle in which you have to produce said drives makes it more difficult to roll out new drives?

I understand what you are saying, but you are wrong. The difference between a 3 year warranty and a 1 or 2 year warranty is a negligible factor in the time for HDD manufacturers to release new technology HDDs.

The main reason they changed the warranty length is to save money and increase profit margins, and because they COULD do it at this time without losing much in sales. I think it reflects more on the customers than on the HDD manufacturers that they are able to get away with that. I refuse to buy an HDD with less than a 3 year warranty. Apparently that is not true for many other customers.
 
The demand for Enterprise class storage so far eclipses the demand from the consumer market it's not even a fair comparison. You think Amazon, Microsoft, Google, etc use consumer drives in their data centers? How about EMC or Netapp, desktop drives in their storage solutions?

Actually, the market for enterprise drives is considerably smaller, at least in terms of number of units shipped.

In the last quarter Seagate shipped 47 million drives globally - of which 6.4M were enterprise class units. There were 37.7M desktop and mobile drives shipped in the same period, with the remainder presumably going to the consumer electronics market!


More here

http://www.crn.com/news/storage/232...tage-hits-enterprise-drive-shipments-hard.htm


It would appear that WD was hit much harder than Seagate!
 
Actually, the market for enterprise drives is considerably smaller, at least in terms of number of units shipped.

In the last quarter Seagate shipped 47 million drives globally - of which 6.4M were enterprise class units. There were 37.7M desktop and mobile drives shipped in the same period, with the remainder presumably going to the consumer electronics market!


More here

http://www.crn.com/news/storage/232...tage-hits-enterprise-drive-shipments-hard.htm


It would appear that WD was hit much harder than Seagate!

I stand corrected...I was under the impression it was different, but maybe I was going off information as to shipments to specific market segments. At any rate my initial statement was obviously wrong. Thanks for the clarification.
 
When it comes to WD, they had a $200 million charge, which was likely taken care of by insurance if they don't insure themselves. Anyhow the quarter after the flood they shipped 20% less drives than they did the year before, and this last quarter they were only down by 12%, likely because Hitachi's stock took up a lot of the slack.

Seagate didn't have any losses, and I don't recall hearing that they shipped less drives than they did the previous year. Pretty much everyone had months worth of drives in various parts of the wholesale/retail channel. After the flood everyone rushed to buy drives expecting a shortage, which just ended up emptying the channel out of drives made previously during the year for both Seagate and WD.

It's classic supply and demand. If before the flood there was a six month supply of drives in the channel, and a rush drops it down to two months, the price is going to go up simply because everyone's stockpile is getting low. Both of them will probably take their time in trying to get the supply back up (if they can help it) to enjoy the price premium
 
You just weren't a customer for the drives that were either under severe constraint or flat out unavailable. Drives did go out of stock. You could not buy a 900GB 2.5" SAS drive in November/December/January...not from normal sources. IF they were available, it was a handful, and they were being massively marked up by ebay sellers or people selling through Amazon affiliate type accounts.

The demand for Enterprise class storage so far eclipses the demand from the consumer market it's not even a fair comparison. You think Amazon, Microsoft, Google, etc use consumer drives in their data centers? How about EMC or Netapp, desktop drives in their storage solutions?

Drives did get impossible to find.

900GB drives are still scarce. i was just told it would take 2-3 weeks to fill an order for 240 of these. which is fine, i redid the config to use mostly 800GB SAS ssds and it is actually a lot less expensive to fill the IOPs/size requirements I need that way than with 10k SAS.
 
Fake or not, these prices sure aren't fake. HDDs are still priced way too high IMO. I need two more 2TB HDDs for my WHS but I'm still waiting for decent prices. I'm loving how SSD prices are dropping though :)
 
Fake or not, these prices sure aren't fake. HDDs are still priced way too high IMO. I need two more 2TB HDDs for my WHS but I'm still waiting for decent prices. I'm loving how SSD prices are dropping though :)

How does that even make sense? How are SSD prices falling but HDD prices are rising? Do they have different suppliers?
 
How does that even make sense? How are SSD prices falling but HDD prices are rising? Do they have different suppliers?

1. They're made by different companies
2. They're made in different places
3. They're made of different materials
 
I stand corrected...I was under the impression it was different, but maybe I was going off information as to shipments to specific market segments. At any rate my initial statement was obviously wrong. Thanks for the clarification.


It does of course also depend on how you "size" the market - Seagate may ship 6x as many desktop/mobile drives as they do enterprise models, but you can be sure that in terms of revenue, for instance, the desktop/mobile market won't be anything like 6x as large.
 
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