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  5. If Disk-Drives Weren't Proprietary, Storage Would Still Be Expensive: Page 2 of 2
Data Centers

If Disk-Drives Weren't Proprietary, Storage Would Still Be Expensive: Page 2 of 2

Every once in a while I'm chagrined when another storage blogger, who should know better, starts complaining about the huge difference between the cost of a 2TB hard drive they buy at Fry's and the cost of a similar amount of storage in an enterprise array. Ladies and gentlemen, while disk drives may account for most of the weight of a disk array, we're past the point where they make up most of the value.
Howard Marks
March 17, 2010

My other problem is my fellow bloggers are comparing highly-discounted street prices with EMC's list. No one in their right mind pays EMC list. Even if you just want a Clariion AX, leaving aside for the moment why you'd want an AX, you can get 25-40 percent off by calling the EMC salesperson the last week of the quarter.

Now that's not to say EMC doesn't make a markup. They sell that same drive, with some firmware tweaks that, depending on who you listen to, either match them better to the Clariion controller improving customer value or just keep EMC customers from buying drives at NewEgg, for somewhere around $400 ($390 on the state of Texas price list, $495 on the NY state version, $660 MSRP). Much of the difference goes to reseller markup and the cost of keeping the EMC sales guy wearing nice suits, buying drinks and paying greens fees. It also pays for the R&D in the back room that has to be amortized across the units sold.  Since the equivalent of a gold record for a disk array is just 5000 units or so, the millions add a few grand to the sticker price.

One way to look at the whole problem is to calculate the cost of a drive bay in a disk array.  On my Supermicro server is around $400, a dLink iSCSI array w/10Gbps Ethernet almost $500. Slot costs on enterprise arrays are in the thousands of dollars. Of course for that you get fove-nines availability and a raft of data protection features. So before you go decrying how big bad storage vendors make obscene markups on "commodity disk drives" reflect on how the companies that market real commodities like frozen OJ work on much larger markups. I wonder how to calculate Kellogg's box cost.

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