Why the Future Is Now for Solid-State Drives

Predicting how fast a newer, more advanced, and more costly technology will eclipse an older, established, less expensive one is always a tricky business. Sometimes, as with the TV industry's transition to flat-panel models, the change happens far more quickly than expected. Yet other transitions, such as the migration from standard-definition DVDs to Blu-Ray discs, prove to be more painful and drawn-out than you'd guess.

In the case of solid-state drives (SSDs) -- storage drives made with flash memory chips -- I'm thinking that they'll be adopted more quickly than most people are expecting, displacing millions of traditional hard drives along the way. The transition won't happen overnight -- given their cost advantages, hard drives will be a big part of the picture for quite some time. But SSDs have too many advantages to be a bit player in the storage game for long. Of these, the biggest are:

  • They're thinner and lighter than hard drives.
  • They consume less power.
  • They deliver much better performance, especially for accessing small amounts of data.
  • They're more reliable. Drop an SSD onto a concrete sidewalk, and chances are that it'll be fine. Drop a hard drive in operation, and, well ...

Put these advantages together, and SSDs are suddenly in the middle of some of the biggest, overarching trends that you see today in technology. Namely: greater portability, lower energy consumption, and instant access to information. And as a result, SSDs are now popping up all over the place.

Who's using SSDs, and who benefits
Makers of high-performance desktop PCs, such as workstations and gaming rigs, are adopting SSDs in a big way. So are manufacturers of "thin-and-light" notebooks: Dell's cutting-edge Adamo XPS notebook, for example, uses an SSD. And interestingly enough, a lot of netbooks are also shipping with SSDs. At the low storage capacities that netbooks often look for (16GB or less), SSDs have become competitively priced with comparable hard drives.

In the enterprise world, the soaring power demands of data centers, along with an interest in improving server response times, are making SSDs a natural fit. HP (NYSE: HPQ  ) and IBM (NYSE: IBM  ) are offering them for their servers, while EMC (NYSE: EMC  ) and NetApp are providing them for their storage systems. Recently, a San Diego research center announced plans to build a supercomputer that will use 256 terabytes worth of Intel (Nasdaq: INTC  ) SSDs. That much SSD capacity sure doesn't come cheap, but the research center apparently decided it was worth it.

The rise of SSDs is bad news for hard drive giants Seagate Technology (Nasdaq: STX  ) and Western Digital, but clearly good news for Intel and Sandisk (Nasdaq: SNDK  ) , who should benefit both from their own SSD sales, and from healthier flash memory pricing. Enterprise SSD maker STEC (Nasdaq: STEC  ) is another name to keep an eye on. STEC's shares recently took a hit due to inventory issues with EMC, but the company remains a market leader, and its valuation is suddenly reasonable.

As flash memory costs keep dropping at a much faster clip than hard drive costs, it's safe to assume that SSDs are going to find themselves in a lot more PCs, servers, and storage systems. The transition might take time, but SSD makers can expect steady growth, and it's not crazy to think that in less than a decade, we'll be looking at hard drives the way that we now look at tube TVs.

Fool contributor Eric Jhonsa remembers the days when 120 megabytes seemed like a lot of hard drive space. He has no position in any of the companies mentioned. Dell and Intel are Motley Fool Inside Value recommendations. The Motley Fool is investors writing for investors.


Read/Post Comments (11) | Recommend This Article (11)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On November 16, 2009, at 2:14 PM, DeadmanLiving wrote:

    All of the points are valid but you have missed a critical one. SSDs, due to the nature of the technology, only have a limited life span in a write situation. Put more accurately, the more they are written to the fast they will wear out. With this fact they could never currently replace a mechanical hard drive. This limits the situations where they are useful. I can see them used as the drive in which the operating system is placed but for the everyday computing a mechanical drive would be cheaper to use.

  • Report this Comment On November 16, 2009, at 5:29 PM, sadil340 wrote:

    Eric, you also missed out on where SSD's can be found - both IBM and HP offer them in their storage not just their servers.

  • Report this Comment On November 16, 2009, at 6:16 PM, brianziel wrote:

    Hey Eric - Brian from Seagate here. We have never viewed this situation as SSD vs. HDD. In fact, the more storage devices in the ecosystem, the better - in the hand, the home, the office, the datacenter (cloud). It allows for massive amounts of data/content to be created, which ultimately needs to be stored, backed up and protected. The volume of that content just can't be handled by SSDs, economically.

    The reality is that SSDs do provide a good solution for certain environments where low power, low capacity and fast read speeds are important. Some of our customers are looking for that type of solution and that's why Seagate just shipped its first (of many) SSD products for a particular portion of the Enterprise market. That said, the storage ecosystem still requires massive HDDs to store all the data that's passing through the SSDs and studies show that HDDs will be that solution for years to come. HDD unit growth tells that story better than I can.

    We believe a more accurate way to look at SSDs and HDDs is found here:

    http://bit.ly/1MS3mI

    http://bit.ly/2ROC3u

  • Report this Comment On November 16, 2009, at 6:30 PM, sadil340 wrote:

    Eric, you also missed out on where SSD's can be found - both IBM and HP offer them in their storage not just their servers.

  • Report this Comment On November 16, 2009, at 6:40 PM, rocknxj wrote:

    SSD as the demise of rotating storage has been predicted since the late 80's. Power and speed have always been cited as the drivers of the change, but cost has typically prevented significant gains. If I was a drive person, I would do what Seagate is doing, add SSD products for appropriate market segments, but continue pushing the cost advantage of HDDs.

  • Report this Comment On November 16, 2009, at 8:43 PM, JimHandy wrote:

    SSDs have suffered very low adoption in the PC (both notebooks and desktops) for some pretty good reasons, although they are finding fantastic acceptance in large-scale computing. This is unlikely to change anytime soon.

    I have researched this a great deal over the past few years. I try to be the "Man in the Know" on SSDs, as a longtime industry analyst covering flash memory.

    To get a really good understanding of how and where SSDs are gaining acceptance, see the presentation titled: "Why and How SSDs are Economical" at

    http://www.SNIA.org/about/SocialMedia/#webcasts

    Jim Handy

    Objective Analysis

    www.Objective-Analysis.com

  • Report this Comment On November 16, 2009, at 8:48 PM, efhouse wrote:

    The write cycle lifetime of flash memory is way up compared to the past. I attended an Intel seminar where they showed the average number of writes in a data center and their drives should last over 5 years under those conditions. In a portable that is only going to be ON, much less written to <10 hrs/day, they should outlast the portable. Go to Intel's website and read up on them.

    A platter drive is still cheaper, but that is the only remaining advantage. SSD's are MORE reliable, more power efficient, and faster by far.

  • Report this Comment On November 16, 2009, at 9:31 PM, anonEmous wrote:

    Eric,

    The value proposition for Flash SSD is this; even though a single solid-state disk costs 100 times more per GByte than HDD (as in the case of the $25,000 STEC drives), the idea is that where performance is critically important, a single SSD can replace dozens or hundreds of spinning disks.

    The problem is that there is not yet a single case where this has been shown to be true in actual, real-world scenarios.

    So far, the best that has been demonstrated is a Sun/Oracle payroll application benchmark in which 46 spinning disks (about $200 each) were replaced with a "performance equivalent" configuration of 40 SSDs (about $2,000 each). There is no planet in this galaxy on which people will pay 10X more for only 1.1x more performance (46/40) -- while simultaneously accepting only 1/4th the storage capacity.

    Even though the SSDs that Sun and Oracle used were 1/10th the cost of the STEC devices (that EMC recently admitted it could not sell this year), the SSDs still cost more than 5 times more per "IOPS" (input-output per second) than spinning disk.

    SSD will remain an economic "Turkey" (non-flier) until cost-per-IOPS drops to something dramatically below that of HDD.

    The formula for SSD success is actually pretty simple. If SSD cost/capacity ($/GByte) is 100X GREATER than disk (which is where we are today), then SSD cost/performance must be (in REAL WORLD applications), 100X CHEAPER than disk.

    Today, we are seeing SSD cost/performance that is only 1.2x to 2.5x better than HDD -- far off the mark.

    So, you said:

    •They're thinner and lighter than hard drives.

    •They consume less power.

    •They deliver much better performance, especially for accessing small amounts of data.

    •They're more reliable. Drop an SSD onto a concrete sidewalk, and chances are that it'll be fine. Drop a hard drive in operation, and, well ...

    Now...redo your math on a PER CAPACITY basis and you'll see how far we are away from SSD economic viability...

  • Report this Comment On November 16, 2009, at 9:58 PM, anonEmous wrote:

    Jim Handy said:

    "SSDs have suffered very low adoption in the PC ...although they are finding fantastic acceptance in large-scale computing."

    Jim, unless I'm missing something...the only purported "fantastic acceptance" in large scale computing was represented in the big EMC orders placed in June of this year...whereupon the STEC founders sold off their shares. Last week we learned that EMC's STEC inventory isn't selling and STEC's "success" was nothing more than good old-fashioned channel stuffing.

    Apart from the huge inventories of STEC that EMC is sitting on, where's the evidence of "fantastic acceptance in large-scale computing"???

  • Report this Comment On November 17, 2009, at 5:57 AM, soiseesurfer wrote:

    Eric,

    I had clicked on the comments option on the page of your article only to find that much of what I wanted to point out had been well covered. So I suggest that you read carefully the remarks posted by anonEmous, who has thoughtfully recapped the primary issues for you. I was particularly glad that the poster mentions the Sun/Oracle payroll application benchmark which I consider revealing in terms of current available technology, but there are many more suggesting the same conslusion.

    In addition to anonEmous' comments I would add that with regard to Mr. Handy's assertion that flash memory has realized "fantastic acceptance in large-scale computing", in fairness and in the spirit of disclosure, investors should be made aware that Mr. Handy is on the Advisory Board of the Flash Memory Summit,and is a member of the Solid State Storage Initiative. He has impeccable credentials in his industry which is semiconductor and I have learned from his many publications regarding flash memory and other solid state technologies. However, in this particular case I would respectfully disagree. While I believe that all major enterprise storage providers are actively offering SSDs, or are in the midst of evaluating how to deploy the technology in their various offerings, I do not believe there is a current "fantastic acceptance in large scale computing". "anonEmous" is quite right to point to the recent disconnect between EMC and STEC as evidence that the demand is not there yet.

    By way of disclosure I should mention that I am a member of the BOD for the International Disk & Equipment Manufacturer's Assn. (IDEMA) and have for over thirty years, been associated with the disk drive industry. The last 16 years I have been an independent consultant and I presently live and work in SE Asia.

    For the reasons already mentioned by anonEmous and other posters, I think that solid state technology (an encompassing term I should note, there are more flavors than one can find at Baskin Robbins) has a long way to go before displacement of the hard drive might be realized. There are many reasons for my opinion, including those mentioned above. However, one I would point to in particular is the rapid growth of demand for more storage capacity (at a reasonable cost/performance ratio). This makes for a moving target for solid state storage promoters who are targeting displacement. On the other hand HDD will not sit still, and new technologies are presently being tee'd up that will likely lead to accelerating gains in the areal density curve that is the primary yardstick for HDD technology. To date, the shift to vertical recording has been fully realized at all HDD manufacturers and will hold forth on new high capacity HDD products for some time to come. In addition, all HDD manufacturers are in the midst of developing variations of new technologies which will extend the HDD well into the forseeable future. These can be referenced easily under the following search terms: "HAMR" or "Heat Assisted Magnetic Recording", and "Bit Patterned Media" will do for a start. I've provided a few links below as a start for investors who wish to perform more diligence on this subject. These technologies are targeting discreet magnetic features on a disk in the sub 50 nm realm, well below current geometries.

    I cannot stop myself from mentioning one of your primary rationales: "They consume less power"

    While this is true we would note that in any system today, whether PC or server, the power consumed by HDDs are typically far less than the motherboard, or the display. Certainly green is good, and all HDD manufacturers have offered lower power consumption models. However, disk drives have not been the component of primary focus when power management is considered by system designers, although it does gain in importance for large "disk farms"

    I'll share with you what I believe to be a far more important issue for consideration by investors watching this space. Both Seagate and Western Digital have SSD products. They are throwing their weight into R&D of SSD products because the technology does hold promise in a variety of applications today, and moreso in the future. The real question as far as I am concerned is whether the HDD giants can leverage their knowledge of their demand base, their channels, and their storage technologies in general, to stake a claim in the nascent market that assuredly will evolve over time. Or, will Intel, Sandisk, STEC, et all, be the future leaders of the SSD market? One might be seduced into believing that the leading edge suppliers represented by the latter group should be the obvious choice but as a storage insider I would be unwilling to make that bet today on a long term basis. As a short term trading opportunity, all of these manufacturers offer some interesting dynamics.

    To close I would offer the following quote from a report issued by TrendFocus just yesterday. (TrendFocus is one of the leading market analyst companies in the storage business)

    "As the [HDD] industry rolls along in a solid CQ4, there is increasing evidence that CQ1 will be down slightly or perhaps flat: moreover, with Win7 and lower PC prices representing a great opportunity for upgrades, 2010 might be a banner year for HDDs."

    To put this in perspective, a "slightly down" or "flat" CQ1 would suggest extraordinarily aggressive demand for HDDs as compared to the historical demand seen in prior CQ1 terms. Today, all indicators suggest that HDD inventories are at historical lows and the pricing scenario is stable. The HDD manufacturers continue to evidence capital and opex restraint in a high demand cycle. The leaders are being run by experienced and seasoned managers. In my opinion, they are the best of breed at present.

    Respectfully,

    Gary Davis

    Links:

    http://www.bentham.org/nanotec/samples/nanotec1-1/Piramanaya...

    http://dspace.mit.edu/handle/1721.1/42140

    http://www.trendfocus.com

  • Report this Comment On November 18, 2009, at 8:13 PM, StorGuy wrote:

    The SNIA Solid State Storage Initiative (SSSI) site has a lot of useful information about SSD technology.

    http://www.snia.org/forums/sssi

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1044495, ~/Articles/ArticleHandler.aspx, 10/25/2014 2:45:30 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 17 hours ago Sponsored by:
DOW 16,805.41 127.51 0.76%
S&P 500 1,964.58 13.76 0.71%
NASD 4,483.72 30.92 0.69%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/24/2014 4:00 PM
SNDK $88.76 Up +0.30 +0.34%
SanDisk Corp CAPS Rating: ***
EMC $28.17 Up +0.47 +1.70%
EMC Corp CAPS Rating: *****
HPQ $34.93 Down -0.01 -0.03%
Hewlett-Packard Co… CAPS Rating: **
IBM $162.08 Down -0.10 -0.06%
International Busi… CAPS Rating: ****
INTC $33.18 Up +0.49 +1.50%
Intel CAPS Rating: ****
STEC $0.00 Down +0.00 +0.00%
STEC, Inc. CAPS Rating: ***
STX $58.36 Up +1.85 +3.26%
Seagate Technology CAPS Rating: ****

Advertisement