Memkor Inc. Technology: Cost of Ownership

Flash SSD addressable market is enormous
Flash SSD's are used as a drop-in replacement of HDD's. The addressable market is the HDD market. This market is around 400M units shipped in 2006 expected to double by 2010.

Even if flash SSD specification looks very attractive, nobody expects that flash SSD will entirely replace HDD in the foreseeable future.

- Flash SSD Market

Cost of raw solid state memory, in terms of $/GB, has always been several times higher than cost of HDD and unit shipments reflected this ratio. In 2005 one flash SSD was shipped for every 900 HDD's. This ratio is expected to be around 1:20 in 2010 due to the rapid flash memory price erosion.

Defined Market Opportunity

The figure above helps to visualize this deployment dynamics and how large is the defined market opportunity for the flash SSD technology.

Flash market appears is elastic and the cost is one of key attributes governing the deployment. Since flash SSD displaces HDD, it is important to rate key values for each technology.

Flash SSD vs. HDD - some cost of ownership factors:

- Flash SSD owns the market where systems cannot fail

The past of Flash SSD shipments reflected how many applications required absolute system and data reliability and/or ruggedness. The cost was an insignificant part of the deployment equation.

- HDD owns the market where $/GB is a driving force

On the other hand, HDD is very cost effective and for a long time did not have a serious competitor, mostly because of the cost. The vast majority of storage requirements were therefore written based on what HDD can and what HDD cannot do.

The Flash price decline changes this way of thinking. While cost remains an important factor, other technology becomes more significant in the deployment equation.

- Cost of Technology

CCost in terms of $ per capacity unit is still several time higher for flash SSD. The flash NAND price falls 30-40% annually reducing quite dramatically initial deployment cost. It is important to ensure that the most recent pricing is used in any cost analysis.

Value: Cost

- Reliability

Flash SSD does not have any movable mechanical parts. This inherent advantage over the HDD will translate into a lower cost of owning the flash technology that can be easily calculated. Flash SSD superior reliability may facilitate storage system design. The disk redundancy may not longer be required which would reduce design complexity. This translates into lowered initial cost and savings in terms of system maintenance.

It may be however quite difficult to assess, in case of storage failure, cost impact of stopped production line, lost customer transaction billing information, security camera unable to record crime images, or customer dissatisfaction from the entertainment system failure on the trans-Atlantic flight.

Value: Reliability

- Life Expectancy

HDD replacement rate due to disk failure reaches 8% already during the second year of disk operations (source: Google). Typical life expectancy of the HDD is 40-70K hours. Preventive maintenance procedures are widely used as a vehicle to manage low life expectancy (and reliability) of HDD's. Due to the large deployment base, the cost of maintenance is very high.

The HDD life cycle length is driven by consumer market and rarely exceeds 2 years and is much shorter than for the flash SSD. For industrial, or telecommunication applications, the storage qualification or re-qualification cost is around $250,000. Each re-qualification due to technology update will add a substantial cost to each drive.

Typical life expectancy of flash SSD is 300-1000K hours. Preventive maintenance is typically not required.

- Ruggedness and Operational Temperature

HDD mechanical system does not like shock, vibrations and uncontrolled temperature environments. Low, high and fast temperature changes impact adversely its operation. Shock and vibration experienced in many mobile applications would prevent HDD from operating. One does not have to quote military applications. The up-scaled laptops today include add-value shock detector that automatically shuts-off the HDD to prevent its damage.

Special ruggedized enclosures are built drastically increasing HDD deployment cost that most likely would exceed the cost of solid state memory. Value: Ruggedness

- Drive Capacity

HDD technology will most likely retain the leadership in terms of capacity. Most storage applications do not require a fast access and are used as a repository of data. The HDD technology is perfect for these applications.

It may be noted that density improvement will increase drive capacity but will also adversely impact performance measured in I/O per second or MB per second normalized per capacity, as mechanical system latencies are not expected to improve significantly. Consider data stored on two HDD's and each disk performance is "X". Users have therefore 2xX pipe to access the data. Doubling the capacity will allow using just one such disk to store the data. User experience will however deteriorate as now only 1xX performance is available.

Value: Capacity

- Peformance Value

Solid state and no mechanical system latencies will ensure flash SSD leadership in terms of raw read/write speeds and especially where random access is required.

With falling flash prices, the performance has become the third most important factor, after ruggedness and reliability, behind deployment of flash SSD's.

Storage designers are using, in parallel to $/GB, cost benchmarks that include performance aspects, such $/IOps, or $/MBps. For some applications requiring very high performance, these metrics indicate a clear advantage of flash SSD by making possible designing into the system less drives and consequently less servers resulting in lower initial cost, less power consumption and less heat, lower cooling requirements, smaller footprint, less inventory and lower recurrent cost of system maintenance.

Value: Peformance

- Power Consumption

Data Centers are spending a fortune on air conditioning. One enterprise class hard drive may require as much as 11 W during write/read operation. Data Centers may have thousands of disks installed.

Flash SSDs use 1-2W during write/read operations that translate into potential energy savings.