Should you push for solid state storage?

Stephen Andrews examines the evolution of enterprise SSD sales in the UK

A poll at a recent conference saw solid state drive (SSD) come third in a list of technologies CIOs expect to become prevalent across in-house datacentres over the next three years.

Reasons for replacing long-standing hard disk with SSD in either business or consumer applications are plentiful, including but not limited to SSD's ability to access data faster than HDD.

The read performance does not diminish based on where the data is stored on the drive, and they are more power efficient and therefore cost effective, after the initial outlay.

Many business SSD specifications are shared with consumer SSD, so analysing business SSD bound for the datacentre through UK distribution is tricky. However, it got me thinking: what is the penetration rate of enterprise-spec SSD in the storage market, and how much is it affecting the unit sales of enterprise HDD?

Our UK panel used the 2013 year to date, from January to August, versus the same period in 2012. Total unit sales for SSD and HDD combined rose 39 per cent from last year, primarily because of a 147 per cent-plus expansion in the SSD product category. HDD has also grown year on year by 17 per cent.

Chart copyright Context Research 2013 -- All Rights Reserved

SSD has gained 13 percentage points and now accounts for a 30 per cent share overall through distribution.

This could be down to businesses and consumers upgrading to new technology around end-of-life. However, there has to be a point where this pace of development can no longer be sustained. Sooner or later, the demand for higher specs and greater capacities will outweigh the manufacturer's ability to develop and produce the product.

A large proportion of enterprise storage sales is not driven by the distribution channel; large end users and cloud providers such as Amazon buy direct. We must also be aware that a large percentage of sales through distribution is driven by OEMs, for example HP and IBM, purchasing from manufacturers and then selling through their own channels.

Enterprise SSD shows a 96 per cent expansion in the January-August period, compared to the same eight months last year. This looks impressive, but Russia, Germany and France all saw higher year-on-year growth through distribution than the UK - 247 per cent, 216 per cent, and 107 per cent respectively.

A first and natural assumption might be that the average selling prices (ASPs) must have fallen considerably, and they did, by 25 per cent. Once again though, the UK market is different; France was the only country with a similar year-on-year decline of 26 per cent, while the ASP declined 42 per cent lower than in the UK.

Chart copyright Context Research 2013 -- All Rights Reserved

In value terms, the UK is looking at a year-on-year decline of 23 per cent, to 63 euro cents to the pound. In the Enterprise SSD segment the decline was 38 per cent, but the cost, as expected, was far higher - €6 (£5) per pound.

In the enterprise HDD segment, unit sales were down 10 per cent year on year, with the ASP also losing 10 per cent.

It's not all doom and gloom on the HDD front though: near-line and mobile segments of the category have enjoyed double-digit growth so far in 2013. SSD is becoming more prevalent in the enterprise - but the technology is some way off making a big difference in distribution.

Enterprise SSD as part of the SSD-market percentage split has slipped from last year's four per cent to three per cent this year - and enterprise storage as a whole remains a very small part of the overall storage picture in distribution.

Stephen Andrews is an enterprise analyst at Context