The $15 per terabyte hard drive is coming

I just saw a Western Digital external hard drive special: a 12TB desktop drive for $187. How do drive vendors do it?
Written by Robin Harris, Contributor

I just saw a Western Digital external hard drive special: A 12TB desktop drive for $187. That's $15.58 per TB. Within a year, we'll be seeing $15 per TB drives on regular offer. How do drive vendors do it?

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I used to work for a disk drive manufacturer, starting back when disk drives were around $50 per MB or $500,000 per TB. I still get blown away by storage prices and today is no exception.

How do they do it?

Two ways.

Much of a disk drive's costs are fixed at around $50, independent of drive capacity. Platters, spindle motors, packaging, power components, and electronics costs are pretty much the same in a 4TB drive or a 16TB drive. High capacity drives have more platters and heads - heads are expensive - but the rest of the parts are largely the same.

Much of the differences in drive capacity comes down to the software within the drive. Signal processing, ECC codes, data handling, and layout: Once you've written that firmware, the software cost doesn't vary with capacity.

Manufacturing is largely automated, with drives assembled in cleanrooms by robots. Some work is done by hand, but the labor content of a drive is not a major cost driver. 

That takes care of the technology.

The equally hard business problem for the world's remaining three hard drive vendors is conceptually simple: Extract maximum margin dollars from each advance at the top of the market, and at every step down the capacity curve. But in a world of shrinking HDD demand, it's a tough balancing act.

Fortunately, the cloud runs mostly on hard drives, aided by solid-state storage at key points. Cloud vendors are willing to pay for drive advances -- such as lower power consumption thanks to helium-filled drives -- that consumers don't much care about. 

Cloud vendors also have a very good handle on reliability and data integrity issues, which is why today's hard drives typically sport two-million-hour MTBFs, and 1 in 10^16 unrecoverable read errors. In the early 1980s, a 25,000-hour MTBF was a feature, not a bug. 

HDD survival depends on maintaining a cost difference against flash storage. Flash has recently dropped to the 10 cents per GB range -- unless you pay Apple's prices! -- so HDDs need to be at 2 cents per GB or less. And as this sale price shows, they are.

The Storage Bits take

Just as tape is still with us, decades after pundits started predicting its imminent demise, so will HDDs continue for decades to come. In fact, if the promise of other non-volatile technologies such as carbon nanotube RAM pan out, HDDs may very well outlast today's flash technology.

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