Thailand Floods Raise Havoc On Hard Drive Business As Customers Scramble For Supplies

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Overland Storage is dual-sourcing its hard drives from both Seagate and Western Digital, and so is able to shift suppliers, Kelly said. "The companies that will be most hurt are those who single-source from Western Digital," he said. "They can move to Seagate, but need six weeks to qualify the drives for their systems."

The toughest part for storage vendors is that they have been keeping inventories to the bare minimum even more so than in the past because of the economic slowdown, Kelly said.

"This is one time I can tell my operations people to go buy the disks we need and not worry about the price falling," he said.

Philip Black, CEO of Nexsan, said is company is probably less impacted by the hard drive shortage than others because it purchases only enterprise-class hard drives.

"To the best of my knowledge, Western Digital plants in Thailand focus mostly on desktop drives," he said. "But I'm still hesitant. There may be things we don't know."

Cameron Presley, vice president of global operations for Nexsan, said that it is important that companies carry some inventory for risk mitigation, deal with multiple sources, and have a bonded supply, which is a supply of components like hard drives which is committed to a particular customer like Nexsan.

"Between what we have on hand and what is bonded for us, we're in a good position based on everything we know today for this quarter," Presley said.


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