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Flash used to be expensive. Five years ago, my all-flash laptop cost a pretty penny. These days solid state drives (SSD) are regarded as being much more affordable. But just how well is flash doing on the economic side?
Jim Handy, general manager of semiconductor and flash storage research firm Objective Analysis, said flash has been making major headway over the past decade in terms of overall cost.
“Flash chip prices have been dropping at about 30 percent per year on average for the past several years,” he said.
According to his numbers, 1 GB of flash cost $8.00 in 2007. By 2012, it was down to 71 cents – that’s less than 9 percent of its 2007 price. Today it’s going for around 30 cents per GB. It might even have gone lower, but Handy points to the “enormous difficulty of producing economical 3D NAND” as pegging the price for now. Therefore, he expects flash to remain around that level for the rest of the year, though it may ratchet a little higher.
NAND is non-volatile storage that doesn’t need power to retain data. It is widely used in devices such as MP3 players, cameras, USB drives and SSDs. 3D NAND offers a way to boost capacity and performance by stacking memory cells vertically. By achieving higher densities, this should greatly reduce cost. That sounds good. But executing the vision has proven a little more problematic than anticipated.
“Flash prices will remain flat, or slightly up, until 3D NAND is mastered,” said Handy. “Objective Analysis projects that this will occur in the middle of 2018, but nobody really knows.”
He’s expecting a manufacturing breakthrough of some kind to take place over the next year or so. When that happens, Handy thinks all 3D NAND makers will become more efficient at cranking out gigabytes, and this will result in an oversupply and a subsequent price collapse. Such price collapses, he said, usually result in a 60 percent reduction over only two quarters.
“These price reductions will be passed through to the end user, although the balance of the system won’t see such a huge decline,” said Handy. “Overall all-flash array system costs will probably drop by only 30 percent.”
Flash vs. HDD
Hard disk drives (HDDs) have always been cheaper than flash storage. But will it always be that way?
If you believe the hype from all-flash array (AFA) vendors, the gap is lessening with each passing moment. But is that really the case? Handy provided some figures to counter this argument.
“The interesting thing about flash and HDD pricing is that they are both being tied to similar price targets,” said Handy.
Flash has Moore’s Law, which targets a doubling of transistors per chip every year or two. That amounts to a cost decline of about 30 percent per year. HDD manufacturers set a target, added Handy, of increasing the number of bits on an HDD by 30 percent every year and tend to meet that goal. That’s why flash never seems to bridge the gap and catch up with HDD economics. But as flash goes lower, the savings from sticking to HDDs appear to become less relevant.
This can be seen in the fact that so many laptops these days incorporate SSDs without adding a ridiculous amount to the cost. Similarly, more and more storage arrays are either all-flash or hybrid versions that combine HDDs and SSDs.
International Data Corp. (IDC) offered slightly different numbers than Handy, although it reached similar conclusions. The most current IDC forecast has flash costs dropping at 26 percent per year through 2020. IDC analyst Eric Burgener said that the supply tightness in the market this year should be gone by the end of 2017.
The reason? He said additional fab capacity is coming on line from Samsung and others that will bring more flash onto the market. Whether this will be enough to overcome the problems Handy noted on 3D NAND productions remains to be seen.
For raw capacity, performance-intensive HDDs (15K, 10K RPM) are going for around 25 to 27 cents per GB. But capacity-sensitive HDDs (7200 RPM and slower) are at more like 2 or 3 cents per GB, according to IDC. The analyst firm puts the current price of enterprise flash at around 40 cents per GB. But that price should come down in the near future.
“Larger capacity SSDs such as the 16 TB version from Samsung and a 60 TB Seagate SSD will help drive the cost of flash capacity down further as they start to ship in volume,” said Burgener.
Secondary Economic Benefits
The raw economics of flash vs. HDDs, though, paints only part of the picture.
“People should also completely understand the secondary economic benefits of flash deployment at scale, not just the performance benefits,” said Burgener. “Some IT executives, particularly CIOs and CFOs, have an outdated perspective on relevant cost metrics for comparing all-flash solutions with legacy hard disk drive-based systems.”
The secondary economic benefits of flash deployment, says IDC, are due to the fact that far fewer devices are needed to meet performance requirements and thus it has much lower energy and floor space consumption needs. In addition, all-flash arrays impact the bottom line by requiring fewer application servers, lowering software licensing, decreasing administration costs and improving device-level reliability.
Part of the reason for this is that all-flash array vendors have successfully incorporated data reduction technologies in their products.
“For a flash-optimized system to get the most out of provisioned flash capacity in terms of performance, endurance, reliability, storage density, and cost, it must offer a range of these technologies, all of which do not impact its ability to consistently deliver sub-millisecond response times across varying primary workloads,” said Burgener. “When legacy general-purpose storage platforms that are predominantly used for primary storage workloads come up for renewal, organizations should be considering AFAs as replacements.”
Another aspect of the IDC view is revenue generation. In this age of speed and instant gratification, storage performance can play a big role in success. Slow serving of web pages, delays in online transactions and sluggish analytics can pass the advantage over to competitors. Therefore, flash storage must also be viewed in terms of how it can boost revenue, not just how much more in costs than disk.
“For applications where improved performance has a direct impact on revenue generation, the quality of customer responsiveness, or other bottom-line business benefits, an AFA purchase can be considered just for these more performance-sensitive workloads,” said Burgener.
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