Climate change or not, weather hurt tech
Thailand flooding ultimately affected server shipments, and was cited in poor financial results of HP, Dell
Computerworld - Scientists expect that climate change will increase the frequency and severity of extreme weather events, and last fall's flooding in Thailand fit the definition of extreme.
The floods were one the world's most costly disasters in recent times, and it had a major effect on hard disk drive manufacturing in the region.
The disk drive manufacturing problems spread through the supply chain and eventually hurt the bottom lines of server and PC manufacturers.
Details of the impact of the flooding on the tech sector is becoming clear as analysts release their quarterly reports.
Gartner this week said that 2.5 million servers were shipped by vendors in the last quarter of 2011, some 200,000, or 10% to 15%, less than would have shipped had it not been for the flooding, said Jeff Hewitt, an analyst at the research firm.
IDC this week put the number of server shipments last quarter at 2.2 million units. Analyst Matt Eastwood, an author of the IDC report, estimated that the floods cut shipments by 2% to 3%, or in the range of 50,000.
Jed Scaramella, also an analyst at IDC, said the overall server market was not hit as hard as the PC market.
The supply for performance-optimized 2.5-in. or 3.5-in. hard disc drives that perform at either 10,000-rpm and 15,000-rpm has been good, Scaramella. But the supply of 1TB-plus, 7,200 rpm capacity optimized drives "has been much more problematic for all enterprise server and storage OEMs since October," he added.
HP CEO Meg Whitman, in the company's quarterly earnings report late last week, said the shortage of drives had "significant impact" on the company's revenue.
"The industry supply of hard disk drives was about 30% below the expected demand," Whitman told investors. HP didn't put all the blame for a 7% revenue decline on disk drive issues, also citing the need for improvements in the overall business.
HP wasn't the only vendor to cite the Thailand floods as a factor in poor results.
Dell did as well, especially in its consumer PC business.
Gartner's Hewitt does not believe the vendors are using the Thai floods to mask other issues. "I think it was a real problem," he said, and it will continue to be one through the first quarter of this year.
Western Digital, a disk drive maker in Irvine, Calif. with manufacturing operations in Thailand that were flooded, last month reported that it shipped 28.5 million disk drives in the quarter ending in December, down from 52.2 million drives a year earlier.
Western Digital and Toshiba were most impacted by the floods. Seagate and Hitachi, which dominate the enterprise hard disk drive market, were both impacted only indirectly by the disaster, according to Scaramella.
Aon Corp., a risk management services firm, listed last year's flooding in Thailand among the top 10 insured loss events from 1980 to 2011, with $45 billion in costs. The flooding was also responsible for 790 fatalities.
Others on the top 10 list include Hurricane Katrina and the Tsunami in Japan.
The wettest year on record for the globe was 2010, and 2011 was the second wettest, said Scott Mandia, a founder of the Climate Science Rapid Response Team.
Mandia said man-made climate change is increasing the probability of floods such as those experienced in Thailand.
He points to a 2007 Intergovernmental Panel on Climate Change report that found that "globally, the number of great inland flood catastrophes during the last 10 years (1996-2005) is twice as large, per decade, as between 1950 and 1980, while related economic losses have increased by a factor of five."
Patrick Thibodeau covers SaaS and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at @DCgov, or subscribe to Patrick's RSS feed . His e-mail address is firstname.lastname@example.org.
Read more about Hardware in Computerworld's Hardware Topic Center.
- Gartner Magic Quadrant for Client Management Tools The client management tool market is maturing and evolving to adapt to consumerization, desktop virtualization, and an ongoing need to improve efficiency.
- Audit Ready and Asset Optimized: The Solid Promise of an Intelligent Software Asset Management Solution In this paper Frost & Sullivan examines the benefits of enterprise-grade Software Asset Management solutions, and how these solutions serve as the convergence...
- Pragmatic Endpoint Management: Empowering an SMB Workforce in the Age of Mobility Lacking the time for proper training and education, SMB administrators often resort to taking shortcuts to keep their environment running.This paper discusses the...
- Gartner Magic Quadrant for Application Security The market for application security testing is changing rapidly. Technology trends, such as mobile applications, advanced Web applications and dynamic languages, are forcing...
- Redefine Your IT Operations: Remote Office IT Has Never Been Simpler Join us to see why PC Pro named Dell PowerEdge VRTX the "2013 Server of the Year." PowerEdge VRTX may be just what...
- LIVE EVENT: 5/7, The End of Data Protection As We Know It. Introducing a Next Generation Data Protection Architecture. Traditional backup is going away, but where does this leave end-users? All Hardware White Papers | Webcasts