Enterprise demand pushes strong growth in SSD sales

Strong demand for solid state drives (SSDs) from the enterprise market saw sales nearly double in 2010, according to the latest data from IHS iSuppli.

Overall sales grew 93 per cent to $4.4bn and the outlook is just as strong in the first quarter of the year. While growth is slowing, the overall market will be worth over $7.2bn within the next three years.

"The momentum is with the enterprise now," Michael Yang, principal analyst at IHS iSuppli, told V3.co.uk.

"The consumer segment has proven to be very price-sensitive but price isn't as important as performance for many enterprise applications. Similarly, storage density is often not as big an issue as response time."

Yang pointed out that if a transactional engine can increase its performance a hundredfold with an SSD drive, and the new hardware only costs 50 per cent as much, it's logical for businesses to buy.

Overall the percentage of SSD sales in comparison to hard disk drives is still small. SSD sales are predicted to hit 15 million units by the end of this year, compared to 161 million hard disks sold just in the first quarter of 2011.

The technology also has significant selling points in other vertical sectors. Airlines are buying large volumes of SSD drives because they allow in-flight entertainment systems to be run with less hardware, thus saving weight as well as costs.

A small percentage of the consumer market is willing to pay for the high performance of SSD drives, but these account for only a few percentage points of demand. Almost all consumers are unwilling to pay the current price premium, Yang said.

But he warned that prices are unlikely to fall much further, since Nand Flash is reaching the limits of how far components can be scaled down.

"There are some generations left, but we are reaching the limits of what can be done with current technology," Yang said.

"I've confidence that the scientists can find a technological solution, however."