NetApp raises storage prices in response to Thai floods

NetApp announced it will raise the price of disk drives in its storage systems from 5% to 15% in the wake of Thailand's flooding, which affected the world hard drive supply.


NetApp this week announced to customers that beginning February 6, it will be raising the price of hard disk drives in its storage systems by 5% to 15% because of worldwide supply shortages.

Two other enterprise-class storage vendors have also raised their hard drives prices in as many months, and Lenovo said it had run short of certain drives for its PC systems.

Flooding in Thailand that began in August and lasted about three months wreaked havoc on disk drive manufacturers, in some cases shutting down as much as 75% of production.

"Similar to other vendors we have seen a negative impact to our drive costs. While we initially absorbed the cost increases to protect our partners and customers, we are no longer able to do so," NetApp stated in its announcement.

IDC analyst John Rydning said the most "painful period" for drive shortages would last from December 2011 through February 2012. "We expect the situation will improve, but it won't feel as if things are back to normal until 2013," he said.

In November, HP sent a letter to its customers stating that the reduction in available hard drives had caused "immediate and significant increases in the prices that HP and all other vendors pay for hard disk drives."

Tom Joyce, HP 's vice president of marketing, told customers that component prices had risen about 20%, forcing HP to increase its prices for certain hard drives. He did not specify which hard drives were included in the price increases.

"In the ordinary course of business, we often adjust prices we charge for components based upon market conditions, and this situation is no exception. What is different now is that some of these component prices may rise significantly, and for an indeterminate period of time," Joyce stated.

Last month, EMC also sent a letter to customers explaining that it would be jacking up its drive prices beginning this month across all EMC business lines for an indefinite period.

Also in November, Lenovo sent an email to its corporate IT customers telling them it is out of a number of hard disk drives. In the email, a Lenovo representative stated that customers who normally purchase systems with 160GB 7,200rpm drives, or various other drives that are unavailable, will have to settle for "off-spec" drives.

Most recently, drive prices on consumer sites have begun to settle down. According to Dynamite Data, the top 50 hard drives on sites such as and leaped in price by 50% to 150% after the flooding.

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