Thai floods darken cloud futures

November 26, 2011 § 2 Comments

If you’ve been watching the news in the past few weeks, you’ve probably learned about the extensive, unprecedented flooding in Thailand. Thanks to globalization, a significant percentage of the world’s hard drives are made in Thailand. Hard disk prices are skyrocketing in response to the damage at these factories. To see what I mean, check out NewEgg’s price history for a Western Digital 1 TB drive: the price tripled in less than two months.

Hard drive prices skyrocket

While this is hitting consumers hard, it also has the potential to put a damper on the migration to the cloud by introducing wild price variances into the equation. Even though cloud vendors have locked in discounted prices and buy in massive quantities, they’re not immune from the laws of supply and demand. This means that these price hikes may take a while to make it into the cloud vendor pipeline. Ironically, consumer hard disk prices will probably be falling at that point in time.

Curious about whether this will affect your cloud initiatives? Wondering how to mitigate risk? Stay tuned, because I’ll discuss that in some upcoming posts.

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