Channel Partners Struggling With Crippling SSD Shortage See Little Chance Of Relief In 2017
Joseph F. Kovar and Lindsey O'Donnell
Solution providers and system builders are finding that a growing shortage of solid state drives (SSDs) is starting to impact their enterprise and PC businesses.
Supply difficulties on the enterprise system and PC sides of the SSD business are pushing solution providers to look for alternative options as customers increasingly turn away from traditional spinning hard drives.
Marc Harrison, president of Silicon East, a Marlboro, N.J.-based Intel partner, said the shortage of Intel's popular SSD 540 client SSDs, including the 2.5-inch and M.2 models, has sent his hardware business spiraling down 20 percent this quarter.
"There's a huge worldwide shortage of SSD drives and we haven't seen anything from Intel in months," Harrison told CRN.
Intel, one of the top providers of SSDs, declined to comment to CRN on the SSD issue citing the current "quiet period" before it announces its next fiscal quarterly results.
The SSD shortage stems from a combination of fast-growing demand for SSDs as the per-gigabyte price falls closer to that of slower-performing spinning hard disks; and a transition by manufacturers of NAND memory, the key component in SSDs, toward 3D NAND technology, according to multiple industry sources.
These two factors are especially impacting enterprise SSD solution providers, who report that the shortages are slowing down shipments of servers and storage systems.
Jeff Olson, vice president at Northern Computer Technologies, or Nor-Tech, a Burnsville, Minn.-based custom server and storage system builder with a focus on the enterprise business, has been forced to look beyond Intel, its biggest supplier, to meet demand.
"It's not a big deal," Olsen told CRN. "So far, they are more available. I'm not sure how long that will last. But we have not been stymied by lack of SSDs."
Andrew Kretzer, director of sales and marketing at Bold Data, a Fremont, Calif.-based custom system builder, told CRN via email that it is almost impossible to get Intel's enterprise SSDs in the channel.
Gautam Shah, president of Colfax International, a Sunnyvale, Calif.-based solution provider, said his company is lucky in that it managed to secure enough supply to last through at least part of the shortage.
"You'd have to have been blind to not have heard of or seen the shortage," Shah told CRN. "There have been lots of reports. People who listened prepared themselves in advance. The lead time today can range from zero days up to four weeks. You can't plan in advance for demand for all SKUs. So you plan for your bread-and-butter SKUs."
On the client side, Silicon East's Harrison said he is particularly wary of the SSD market's impact on his business as Intel's next-generation NUC (Next Unit of Computing) small-form-factor PC hits the market in April. Silicon East integrates Intel NUCs and resells them, but without access to SSDs, the company won't be able to bring the products to market, he said.
Harrison said that the Intel SSD 540s series drives were also unavailable through other distributors, including Tech Data and Ingram Micro. Neither company was available to respond to CRN's request for comment by publication time.
A CDW sales representative told CRN that the company ships those Intel SSDs as fast as they come in, but does not expect new shipments until late May or early June.
Kent Tibbils, vice president of marketing at ASI, a Fremont, Calif.-based Intel system builder, said that he's seen shortages across the board since October 2016, and has heard that the shortages on both the client and data center sides will continue through the remainder of this year due to supply allocation and constraint issues.
"The collective news is, it's not good," Tibbils told CRN. "In terms of the shortage on SSDs, I’d say that yes, this is impacting channel partners. We are seeing shortages and higher prices on SSD and memory, so both NAND and DRAM are impacted. In terms of SSDs, the shortage is the reason our sales are down for this category. The interest and demand for SSDs is still strong but supply is just not there right now due to the transition to 3D NAND."