Solid State Storage is Coming

It appears that the Asustek Eee PC was among the top-ten notebook PCs sold by Amazon over the Christmas season. That might be interesting for several reasons, including the fact that it is a Linux machine or that it uses solid state storage.

Up to this point, solid state storage has been expensive enough, compared to hard disk alternatives, that its use has been limited. The smallest iPods use solid state, but the larger-capacity devices use hard disks, for example.

But Moore's Law continues to operate. Even if solid state costs an order of magnitude more than hard disk storage, costs are declining fast enough that one can predict a point where solid state storage is cheap enough to be useful in a much-wider range of settings, including many that currently rely on hard disk drive storage. And it isn't simply consumer devices where that trend will be important.

So far, the biggest barriers to adopting solid-state drives (SSD) in the data center have been price and capacity. Hard disk drives (HDD) are much less expensive and hold much more information. For example, a server-based HDD costs just $1 to $2 per gigabyte, while SSD costs from $15 to $90 per gigabyte, according to IDC. So far, the cost disparity has been so high that SSD has not been an option, though some would argue it has other advantages.

Alan Niebel, Web-Feet Research Inc. CEO says the average cost of solid state storage per gigabyte is $10 while and hard disk drive storage costs 30 cents for a gigabyte of storage. Many observers say a price point of $1 per gigabyte is the inflection point at which solid state really takes off. And at an expected 50-percent annual price decline, that might happen by 2011. Of course, hard disk drive storage will cost just three to 10 cents a gigabyte at that point.

And prices are falling fast. Right now, the industry trend is a 40 percent to 50 percent drop in SSD pricing per year, according to Samsung.

At that rate, how long can it be before solid state storage starts to become a bigger factor in both enterprise data center, consumer electronics and computing devices, especially mobile devices?

Assume a gigabyte of hard disk storage now costs about one dollar. Assume the highest price for solid state storage is $90 a gigabyte in 2007, and that prices will drop 50 percent a year. By 2010, one then sees solid state storage at about $5 to $6 a gigabyte, competitive enough with hard disk drive storage to be reasonable in some applications where energy costs, extended battery life or light weight are important considerations. Make that data center storage applications, notebook computers and portable gaming or music devices as primary examples.

By 2011, one is down to about $2.50 a gigabyte of storage for solid state media. Of course, hard disk drive costs will decline as well. If hard disk storage costs drop at the same rate, a gigabyte of hard disk storage will cost three cents per gigabyte by about 2011. That's still an order of magnitude difference, but for many applications the cost of solid state storage will no longer be a barrier to use in many consumer device or data center applications.

Level 3 Provisioning Issues?

Level 3 Communications has made seven acquistions in the last 18 months, including Broadwing, part of the Savvis portfolio, TelCove, Looking Glass and ICG. Several of the buys related to its new content delivery network portfolio. But many of the sizable acquisitions are related to its core bandwidth business.

If you have been around the business long enough, you know what is happening in the back office. Disparate systems are running in parallel. Manual reports have to be built. Billing systems don't talk to each other. Inventory cannot be interrogated in real time. Provisioning backlogs are the inevitable result.

That is one possible reason Level 3 reported relatively light revenue and earnings growth in the most recent quarter. Demand for its services isn't the problem. If anything, in light of the back office issues, demand possibly is outstripping provisioning.

Any company would have at least some issues getting new customers provisioned efficiently were it to digest as many acquisitions as Level 3 has made recently. So we would not be surprised if the company is having issues getting the new customers onto the network.

In fact, it probably is safe to say that bandwidth in service has grown at an unprecedented level over the last year. If one looks at total in-service bandwidth provisioned by Level 3 in its entire history up to about 12 months ago, the amount of bandwidth in service probably has doubled again in the last 12 months.

That rate of growth would cause issues for any service provider. So we wouldn't be surprised if there was some hiccup in provisioning new orders. In fact, the backlog could be great enough that three months might have to pass before the provisioning teams can catch up. Level 3 wouldn't be the first company to have problems with too much success.

Google Will Buy 30% of Servers in 2010

In 2010, say analysts at the Gartner Group, Google alone will consume 30 percent of all the world’s servers. That's three out of 10 of all servers manufacturing globally that year. That's some serious scale! And explains why Google buys so much optical bandwidth, and is investing in its own cable.