Disk-drive demand may be slowing server shipments

Demand for certain types of disk drives used on Intel-based servers may be running ahead of industry supply. At least that’s been the case for Hewlett-Packard Co., which has been forced to delay shipments of some servers.

HP customer Al Angarita, director of IT and administration at the Baltimore Community Foundation in Maryland, an organization that distributes and manages millions of dollars in charitable funds, placed an order for two ProLiant servers on Dec. 29.

Angarita said that in follow-up telephone calls to HP customer service this week, he was told that his servers may not arrive until Feb. 11 because of a lack of hard drives.

“I love HP and Compaq servers — that’s the sad part,” Angarita said. “But I can’t say it’s been a smooth ordering process.”

Early last year, HP faced problems in filling some customer orders as a result of supply chain problems. The problems were blamed for the poor performance of its Enterprise Servers and Storage Group in the quarter that ended July 31, which led to the firing of three top sales executives.

HP this week declined to discuss the latest problem because it’s in the “quiet period” before the release of its latest financial results.

HP spokesman Don Gentile said the earlier supply chain problems “are now behind us” and that “generically,” the company can face supply and demand issues in any quarter.

“What we’re experiencing is reflective of strong customer acceptance of our products and demand for those products,” said Gentile.

Industrywide Shortage?

Computerworld anonymously called HP customer service to inquire about availability of a ProLiant server similar to what Angarita ordered, the ML 350 with a 36GB, 15k-rpm hard drive. It was told by a representative that “there is a seven-week back order” on the drive and that there’s “an industrywide shortage.”

Angarita said servers with larger and more-expensive disk drives are available. That was also Computerworld’s experience: It was told a 146GB, 10k-rpm drive was available.

Demand has been rising at the same time that disk drive makers are moving to new products, said John Donovan, an analyst at market research company TrendFocus Inc. in Los Altos, Calif.

“There is clearly some pent-up demand that these guys can’t meet,” he said, referring to the hard drive makers.

Although larger-capacity drives are available, the 36GB, 15k-rpm drive is popular with enterprises, said Woody Monroy, a spokesman for Seagate Technology LLC in Scotts Valley, Calif. The disk drive maker this week reported US$1.85 billion in sales for all its drives in its most recent quarter, up from $176 billion a year earlier. “We shipped a record number of drives,” he said.

Monroy said it’s possible there could be a backlog on a particular drive, but he had no specifics. A spokeswoman at Dell Inc. said the company wasn’t experiencing delays on its main servers.

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