SSD vs. HDD Pricing: Seven Myths That Need Correcting: Page 3 -

SSD vs. HDD Pricing: Seven Myths That Need Correcting - Page 3

Reality: The Role of Market Forces

The historical SSD cost spike in 2009 and the flat to slightly upward trend of 2013 and early 2014 demonstrate that, as with any product or service in a capitalist economic system, SSD prices are impacted as much by economic trends and developments as by technological advances. The 2009 spike was the result of increasing demand (new need for flash in smartphones, tablets, and laptops) combined with the reduction in suppliers resulting from the recession. Even the source used for this information ( was optimistic and assumed a continued rapid decline that turned out to be false as supplies dropped off again in 2013, with the result that prices went up and have yet to go back down. This price increase is the result of a failure to meet demand for new products, such as the Apple iPhone 5 and increasing tablet sales, and a fire at DRAM provider SK Hynix which prompted vendors to shift their flash manufacturing lines to meet a sudden shortage of DRAM.

Compared to the HDD market, which only has three main manufacturers (Seagate, Western Digital, and Toshiba), the list of SSD manufacturers is considerably longer. There are about 40 companies manufacturing and selling SSDs, ranging from computer industry giants like Intel and Seagate to much smaller start-ups. As a result, while some of the larger manufacturers (such as Intel and Samsung) can offer some support or integration benefits, the key selling point for most manufacturers remains price, especially in $/GB, since there are no significant differentiations in quality or performance. As a result, SSD prices are forced down. A future consolidation in the future could level off or even increase SSD prices considerably.

It is important to note that, while performance is a major selling point, capacity is still the dominant force. Most vendors and reviewers measure price against overall capacity, or $/GB. In fact, I found no sources in my research that ever used a price against performance figure, such as $/GB/s. Rather, they touted superior performance of SSDs as a given advantage over HDDs without any costs included. This is the result of a highly competitive market where there are few distinguishing factors between technologies aside from capacity and price point as mentioned above.

Another important market force is the SSD industry’s focus on relatively small capacity, high-performance SSDs. The main factor is the high demand for smartphones, tablets, and other small and highly mobile computing devices. In these kinds of devices, performance and small size are prioritized over capacity, and HDDs are simply too large to be practical.

This had led to an advantage for SSDs in these markets. HDDs have specific form factors, require more moving parts that are vulnerable in mobile devices, and also have preset costs for the disk, case, motor, and other necessary parts. Since they can be produced in small spaces, perform faster, and do not have to worry about load wearing, SSDs are a better option for small consumer devices. However, once you get into larger capacities and more commercial or enterprise environments, this advantage disappears as HDDs become increasingly cost efficient and SSD expenses grow rapidly.

To compete in this market, most SSD manufacturers focus on SSDs with 256 GB or less, while a few manufacture SSDs with 512 GB, and even fewer manufacture anything above 1 TB. As a result, while prices for SSDs in the 256 GB and below range continue to decrease, SSDs of 512 GB and above have leveled off, and SSDs with 1 TB or more have prices described as “astronomical.”

This price difference means that, while small and mobile devices continue to increase SSD usage, large storage and enterprise level systems will continue to use HDD or tape storage for the foreseeable future.

Reality: A Note on the Difference Between Consumer and Enterprise SSDs

There are few manufacturers actually making SSDs at 1 TB capacities and above, and there are even fewer actually manufacturing what would be considered enterprise SSDs. The majority manufacture consumer SSDs.

Consumer and enterprise SSDs have several key differences. While consumer SSDs focus on lower cost, enterprise SSDs focus on performance and quality. As a result, consumer SSDs tend to be built with a SATA interface common in laptops and PCs, while enterprise SSDs are built with either SAS (for reliability) or PCIe (for performance) interfaces. In addition, low-quality MLC and TLC are used in consumer SSDs that strictly adhere to a 2.5” form factor to fit in consumer demands. Enterprise SSDs use either SLC (significant downtrend over the last year in production) or more commonly Enterprise MLC (eMLC) with 2.5”, 3.5” and special large form factors to meet demands.

The resulting difference in costs is considerable. Consumer SSDs tend to range from $300 to $650 depending on make, model and capacity, while enterprise SSDs can range from $2,250 to $16,000 depending on make, model and capacity. This range means that, while consumer SSD prices are relatively close, predictable and decreasing (especially on a $/GB basis), enterprise SSDs designed for database or supercomputer applications vary widely both in overall costs and $/GB.

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