For all sorts of reasons, the exponential improvement of so called solid state drives (SSD’s) is a very welcome one and they will soon sweep most of what’s in front of them. We will also look at some investment opportunities in this space..
What are SSD’s? It’s a bunch of flash memory that one can use in a computer instead of a traditional harddisk.
We are already familiar with them through the Apple Nano, the first product that used flash memory instead of a little hard drive. Comparing the Nano with it’s predecessor (the traditional iPod) also revealed some advantages and disadvantages, which we’ll discuss below.
The relentless working of Moore’s law (stating that the number of transistors on a chip roughly doubles every 18 months) produces SSD’s that are ever more capacious, and now they have come within reach to replace traditional harddisk, not only in iPod’s, but also in other Personal Computers and even Servers en enterprise storage solutions.
SSD’s have a number of advantages:
- It doesn’t have any moving parts, making them far less vulnerable
- For the same reason, they draw much less energy, saving battery life in laptops
- Their life expectency (time to failure) is a multiple of those of hard disks as well, they’ll last a lot longer
- The data access time is a fraction of that of hard disks, making them especially suitable for computing tasks that need to access a lot of relatively small files
- Their read and write time is now well above even the fastest hard disks as well (and it doesn’t taper off), so even in accessing big files they now have a significant edge over hard disks
- Unlike traditional hard disks, SSD’s do not need to be defragmented, so their performance doesn’t deteriorate over time
Ideal for laptops: faster, more reliable, longer life, drawing much less energy, it’s a win-win situation, except for their price. But even this is falling rapidly as broader acceptance kicks in the familiar mass market economies.
The ideal of a notebook with an SSD is very appealing (if they become a little cheaper), and that’s a notion that has not gone unnoticed at Intel. They’re at it as well:
- As Gordon correctly reported yesterday, Intel has finally seen fit to reveal almost everything we wanted to know about its forthcoming solid state hard disks. Due to hit the streets in less than a month, Intel’s new Extreme and Mainstream drives will attack both the server market, and the desktop/notebook markets.
- Intel had taped an envelope to the base of every attendee’s chair, inside of which was an 80GB X18-M Mainstream SSD. There was much excitement in the room, until we turned the disks over and saw the “non-working sample” stickers. Now that’s just nasty – it’s like giving your child a beautifully wrapped present on Christmas morning, only for them to find the box empty!
- Pat Gelsinger said that “Intel SSDs will be transformational to the data centre“, and I can see his point. What’s interesting is that Gelsinger was singing this same tune a couple of years ago, during the rollout of the Core architecture. The massive reduction in power draw and heat generation that the Core architecture brought to the table, meant that running costs of data centres could be reduced dramatically. Now, the same is potentially true when it comes to enterprise storage, with Intel’s Extreme solid state disks drawing a fraction of the power of traditional high spindle speed hard disks.
- Of course, despite the fact that the power draw and heat generation from Intel’s Extreme SSDs are far lower than a traditional Winchester drive, there are only 32 and 64GB versions on offer. This means that you’ll need to have far more drives in your rack, and the cost per drive is likely to be far higher, despite the lower capacity. Unfortunately Intel wasn’t willing to reveal pricing for either type of drive, but it’s a fair assumption that a move to solid state storage in your servers won’t come cheap.
- The Mainstream drives differ from the Extreme units on many levels. The most obvious difference is that the Mainstream drives will be available in 80GB and 160GB capacities, making them attractive to anyone who’s been put of solid state storage due to the limited capacity. However, although the sustained sequential read speed of 250MB/s is identical to the Extreme units, the sustained write speed is considerably slower at 70MB/s compared to 170MB/sec. The Mainstream drives also sport a less generous MTBF at 1.2 million hours, as opposed to two million hours.
- Both Lenovo and HP were on hand to confirm that Intel’s new drives will be seen in new notebook models soon. Not only will the new drives increase overall system performance, but battery life should improve too. And with the new drives shipping in both 2.5in and 1.8in form factors, we’ll probably be seeing them in everything from mobile gaming rigs to ultra-portable notebooks to UMPCs.
However, the above article really underscores another big market opportunity, servers and data storage. It’s actually wrong in arguing you need multiple SSD’s to replace a single hard disk:
- Objective Analysis predicts unit shipments of SSDs for the enterprise will rise 151 percent per year through 2013. The key is speed, as measured in IOPS (input/outputs per second). Many IT managers, particularly those at banks, stock brokerages or with other transaction-type needs, have so much trouble with HDD speeds that they hook up several HDDs to one enterprise server in order to increase IOPS.
- “With a single SSD they can get rid of a hookup like this altogether, replacing 10 HDDs in many cases, but I heard of one extreme case where one SSD replaced 38 enterprise HDDs,” Handy said.
- An enterprise SSD can cost from US$5,000 to $10,000, depending on capacity, but if it can replace the need for ten enterprise HDDs, which cost around $350 to $1,200 each, an IT manager has already recouped their investment. Tack on savings to the electric bill over time, and SSDs appear even more attractive.
So the guy writing about Intel had it upside down, a single hard disk being replaced by numerous SSD’s. It is the other way around, a single SSD can replace ten hard disks in the storage en server market, despite it’s lower capacity!
They might be considerably more expensive (although that price gap is likely to narrow considerably with mass introduction and the usual advancement according to Moore’s Law), SSD’s hold other critical advantages for this market:
- Their energy efficiency is compounded by three advantages: the SSD itself needs much less energy, an SSD replaces multiple hard drives, and server and data centers need a lot less cooling.
- We can even add a fourth, because of their much longer life time, far fewer of them need replacement, saving on the energy to produce them.
- They’re also much more reliable, which matters most for critical applications.
We think that by now you might see something in these nifty little things. They are about to conquer all in front of them (until an even more efficient memory/storage technology comes around, which is not impossible, but we’ll discuss that some other time).
Nice for the investor?
Some of the companies on the forefront are:
These companies stand to gain disproportionally and we like the more pure players SanDisk and OCZ better (although powerhouse Samsung especially is not to be disregarded in this space)
However, some basic economics tells you that you have two opposing economic forces at work:
- A rapidly growing market
- Commodification, that is, there is little to distinguish the products
The first will produce great top-line growth (especially for the pure plays), but a great bottom-line growth is not guaranteed. There are still significant differences and there are products that fetch premium prices (especially in the enterprise sector) but we fear the forces of commodification will set in at a certain time.
As an illustration, Samsung seems to be the only profitable company in the NAND flash memory space (which covers more applications than just SSD’s)
- The rankings in the NAND flash memory market remained constant in the second quarter, but Samsung Electronics Co. Ltd. was the only profitable supplier during the period, according to iSuppli Corp.
You can see the whole ranking by clicking the link.