Disks in short supply, hardware vendors say

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January 28, 2005 (Computerworld) -- IBM and EMC Corp. this week became the second and third large hardware vendors to report a disk drive shortage, and market research firm IDC said it expects delays in server shipments resulting from the shortage to continue through this year's second quarter.
Ron Clarke, director of commodity procurement for IBM's integrated supply chain operation, said the supply of disk drives "is a little bit tight right now." The shortage is industrywide and has been exacerbated because all the major drive suppliers launched upgraded versions of their products in the fourth quarter, he said.
Clarke added, though, that IBM saw the disk drive shortage coming and ordered additional stock to protect itself and its customers. He said he's optimistic that the supply problem will be resolved in the next 30 to 60 days.
But EMC warned that higher disk prices caused by the supply shortfall are likely to cut into its profit margins during the first half of the year. "My experience shows me you kind of get through these things in a six-month period," CEO Joe Tucci said during EMC's fourth-quarter earnings conference call on Tuesday. "We'll see how that goes."
The acknowledgments of a shortage by IBM and EMC came after Computerworld reported that some server shipments by Hewlett-Packard Co. were being delayed because the needed drives are on back order (see story).
A draft report issued this week by IDC said that in last year's fourth quarter, the demand for enterprise-class hard drives exceeded supply by nearly 7%, or about 400,000 drives. IDC said the supply shortfall was due to a combination of the product transition cited by Clarke and an increase in purchases by hardware vendors.
"The resulting allocation conditions were not unexpected but are deeper, more broad and more prolonged than originally forecast," the Framingham, Mass.-based company said in its report.
An investigation by IDC revealed delays in server shipments by all the major system vendors except Dell Inc., which told both IDC and Computerworld that it hasn't been affected. The delays primarily involve higher-end drives, specifically 15,000-rpm models with 73GB and 146GB capacities, IDC said.
On average, the standard shipment time for an enterprise server is one week, according to IDC.

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