Storm clouds continue brewing in the usually uneventful land of hard disk drives. \n The severe flooding that inundated Thailand a few months ago swamped more than 1,000 factories, including some of the world's largest hard disk drive (HDD) manufacturers. Toshiba had to halt production in the majority of its hard disk production facilities, while world number one HDD maker Western Digital ceased all production in the country. \n The flood in Thailand has since receded, and the various manufacturers and their suppliers have scrambled to replace waterlogged machinery and restart production. However, this hiccup in production has far-reaching consequences to the global supply of hard disk drives.\n Some expect the current supply chain shortage to take up to a year resolve. In a Computerworld report, IDC analyst John Rydning said, "We expect the situation will improve, but it won't feel as if things are back to normal until 2013." Intel chief financial officer Stacy J. Smith mirrored that stance, telling analysts in a December 12 conference call that the company expects the shortage of HDD to be "pretty significant" in the early part of 2012. \n Seagate, the only HDD manufacturer to avoid direct damage from the flood, points out that overall capacity demand is growing currently at 40 to 50 percent per year. That means even if unit supply were to recover earlier than expected, unmet capacity demand would still pose a problem.\nSignificant HDD Price Spike When flood waters caused production of HDD to be suspended, the first to be affected was the retail sector because manufacturers yanked the distribution of product over to OEMs to avoid supply disruptions. This resulted in a spike of 50 percent to 150 percent in the price of consumer hard disks almost immediately, according to analytics data supplied by real-time ecommerce tracking company Dynamic Data. The company reached its conclusions by tracking prices of the top 50 HDDs models across its database of 3,000 merchants. This price has since come down slightly, but is still at an all-time high compared to the first nine months of 2011.\n The shortage of HDD has also hit PC makers particularly hard. Indeed, market research firm IHS iSuppli has cut its PC market forecast, projecting a 3.8 million-unit shortfall in the first quarter of 2012. After all, you can't sell a PC without a storage drive. On the enterprise front, storage vendors such as EMC, NetApp and Hitachi Data Systems have announced temporary price hikes of 5 percent to 15 percent for their HDDs.\nWarranties and SSDs Beyond price hikes, HDD vendors are taking other steps that may be shortage-related. Western Digital (WD) and Seagate recently reduced the warranty period for certain consumer-centric HDD models. Seagate cited a need to redirect the resultant savings towards technology innovation and more unique features for its products; WD did not provide a reason. The shortages of HDDs and industry consolidation of hard disk manufacturers is likely to have played a pivotal role by making such measures easier to force on the market without impacting sales.\n In response to queries by CIO.com, Brian Ziel, senior director of Corporate Communications at Seagate said the company "is doing everything it can to satisfy its customers' supply requirements, including in some cases entering into long-term supply agreements." PC manufactures are generally reluctant to enter into long term agreements, and negotiate on a quarter-by-quarter basis to exact the best prices. It is hence plausible that PC makers may opt to pass on to customers any costs incurred from the long-term agreements.\n One hypothesis that has been making the rounds is that the shortage of HDD will push demand towards solid-state drives (SSDs). That may well be the case for high-end desktop and laptops, but the continued price disparity and relatively low storage capacity of SSDs will likely limit its mainstream adoption. \n The case for SMB adoption of SSDs in storage appliances or servers is even more tenuous, given the even higher cost of an SLC (Single level cell) SSD. So, while the HDD shortage may accelerate existing plans to adopt the use of SSDs, it is unlikely to persuade businesses that are not already convinced of their benefits.\nLarger Enterprises to Get the Drives At least one storage consultant is certain that the needs of larger and more lucrative enterprise customers will be prioritized over other types of customers. "The drive vendors have been forced into a limited-supply allocation scheme, and that means that their largest customers get the largest allocations and commitments at the expense of smaller system manufacturers," said Tom Buiocchi, CEO of Drobo, in an email.\n That means large enterprises that routinely deploy SANs from the large storage vendors may see temporary price increases but are unlikely to experience disruption in the long run, leaving smaller businesses to bear the brunt of the supply shortage. SMBs will be squeezed by PC makers who may be inclined to pass on the higher cost of HDDs. Moreover, storage vendors serving the SMB market may find themselves left out of the limited supply allotments, forcing SMBs to acquire HDDs piecemeal at inflated prices from retailers. \n For now, SMBs with immediate needs for additional storage requirements will have no choice but to go ahead and pay the higher prices. And given the volatile situation, it may also be wise for companies with mid-term requirements to buy sooner rather than later.\n\n\nPaul Mah is a freelance writer and blogger who lives in Singapore. You can reach Paul at email@example.com and follow him on Twitter at @paulmah.