The great HDD price conspiracy


Cloud backup service BackBlaze earlier this week published the intriguing story of how it survived the global hard disk drive (HDD) shortage triggered by the severe flooding in Thailand last year. As anyone who tried to purchase HDDs then knows, HDD prices made a steep climb in the weeks and months following the floods.

Faced with prices that had practically tripled--from $129 to $349--the cloud startup BackBlaze adopted a strategy of buying cheaper external HDDs. Internal HDDs were removed from the external cases and deployed for use. You can read the low-down here, which makes for an interesting read over a cup of coffee.

To the point though, the entire story brought back to mind a far-from-ideal situation in which three major HDD makers--Seagate, Western Digital and Toshiba--were manufacturing a significant percentage of storage disk drives in the world. Wikipedia has a diagram of the acquisition process, which you can see here.

If anything, the Thailand floods proved that having so few HDD makers is detrimental to consumers, who found themselves straddled with high prices due to supply shortages. Ironically, instead of taking losses or even making less, the HDD makers actually made more money.

Seagate, which was largely unaffected, saw a staggering profit of 750 percent in wake of the Thailand floods. Even Western Digital, who was arguably the worst affected, experienced its "strongest revenue and profit performance in the company's 42-year history."

Unfortunately, the situation is unlikely to change any time soon, given the dearth of new players and absence of cheaper storage technologies. Even with growing trend of solid-state drives in laptops and desktops, I certainly don't expect HDDs to become obsolete any time soon for mass data storage. - Paul Mah  (Twitter @paulmah)