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Blake J. Graham | Wednesday, November 9, 2011

Floodwaters occupy Thailand. Beyond the evident and tragic cost of human life, the effects of the flooding are far-reaching for tech companies.

In its wake, the flood has left ruined homes and inundated factories. More than 1,000 production buildings that formerly made equipment and components for the automotive and technology industries sit silently while CEOs and managers scramble to figure out how to pick up the slack. Most devastating is the effect on the companies who manufacture hard disk drives (HDDs).

The hard drive is the storage complex of technology. Any information contained within a closed system is placed onto the HDD (or equivalent such as an SSD) where it can be retrieved by any program that needs it.

Thailand’s government predicts the rise of the water until the end of the year, but even when the water recedes, there’s no knowing how long it will take to resume factory operation. The effects have yet to take a major hold on the market as drives have been produced to meet demand through December. Come quarter one of 2012, hard drives will be out of supply. Apple CEO Tim Cook is on record predicting “an overall industry shortage.”

Production will decrease by approximately 30 percent, or 50 million units. Factories in China, Malaysia and the Philippines owned by Western Digital, Seagate and Asus are already at 90-98 percent capacity — they cannot make up the substantial difference.

With the production of HDDs not resuming until February at the earliest, the manufacturers are already experiencing price increases in distribution channels. In some cases, distributors are stockpiling to wait out the period. PC manufacturers, looking to keep the cost of their machines down, are searching the grey market for cheaper devices. The result would put volatile drives in consumer devices.

PCs are not the only technologies operating on hard drive storage platforms. Companies like Amazon, Microsoft, Google, Apple and Facebook all purchase massive amounts of enterprise grade storage to hold the data constantly served on the Internet. The amount of information users dump into these cloud-based services accumulates on a super-massive scale. You can’t expand the Internet without expanding storage drives. When we reach the point when Google and Facebook cannot access or procure the drives they need, the Internet, as a whole, is in trouble.

The problem lies in the fact that the Internet was built on the assumption that storage is negligibly inexpensive. Trends for years indicate the ever-reducing cost per byte of data. The cost of production hasn’t changed but availability has. Because there was never concern about data supply, companies indulged in all-you-can-eat data models.

Nobody ever thinks about how the storage on their Gmail account perpetually grows. Nobody worries about how many photos they can upload to Facebook — click upload and go. Not just one copy of each photo exists on Facebook’s server, approximately seven do, each optimized for a different purpose. Services like Spotify offset the cost of maintaining 16 million instantly streamable songs with lucrative licensing deals. We live in a world where over 50 hours of video are uploaded to YouTube every minute — and then YouTube will store up to five different versions of each video on their servers. Without need to be efficient with data, the system has become exceptionally bloated and heavy-footed.

In the coming months, the giant Internet companies will be forced to create teams of programmers with the goal of optimizing their systems. It’s a seemingly insurmountable challenge. How does one reconcile doubling data usage with static quantities of storage? It’s a problem with an answer long overdue. Analysts deem it unfortunate that these teams will be taken away from product and service development, but the total effect of an efficient web is monumental.

HDDs remain the slowest component within computers today. There is a growing trend towards Solid-State Drives (SSDs) that step away from the slow magnetic disks used in HDDs and replace them with solid-state memory. SSDs are stable, smaller, significantly faster and very expensive. SSD production has been left unscathed by the flooding.

As the HDD deficit grows, the cost per gigabyte is likely to double. When comparing old technology with new technology at an equal price-point, the decision is much easier to make. Perhaps it’s time to replace the 50-year old HDD industry itself. Crushing constraints and limited resources are known to produce states of rapid invention. There is promise for a better web amidst the murky water.


Blake J. Graham is a freshman. He can be reached on Twitter @BlakeGraham or at [email protected]

The views expressed in this column are those of the author and not necessarily that of The Observer.