Fortunately, no major storage manufacturing factories were hit by disaster this year. Smooth sailing is great, but it also gave election-year politics and whatnot more opportunity to steal attention from important things happening in the industry. Now, heading into the end of 2012, we’d like to turn back and recap the top storage events that directly impacted enterprises and will remain significant through 2013.

Market Overview

There used to be more than 200 vendors in the hard-disk drive (HDD) market. Today, there are effectively five brands sold by the major manufacturers: Seagate, Samsung, Toshiba, HGST, and WD. There are a few key benefits to consumers arising from the smaller number of HDD manufacturers.

Largely thanks to economies of scale, for example, current HDD manufacturers enjoy lower manufacturing costs. Rather than multi-sourcing, the remaining brands utilize vertical integration that allows additional resources to be devoted to scientifically challenging and often groundbreaking R&D.

Seagate was first to market in 2011 with 1-Tbyte disk platters. Achieving the 625-Gbit-per-square-inch areal density necessary for 1-Tbyte platters (never mind subsequent advances) requires multi-billion-dollar investments in process development and new manufacturing capabilities that few companies can sustain. Larger size and scale help these companies to keep advancing the storage market while driving down per-gigabyte costs.

Consolidation also plays a role in the solid-state drive (SSD) market. There are currently more than 100 SSD vendors, with about 15 targeting the enterprise SSD space. This number might have been larger but for steep NAND costs (much declined over the past year or two) as well as the fact that drives marketed as “enterprise” are not created equal.

HDD manufacturers have three decades of experience in tailoring features such as error detection/correction and controller interface coding. In contrast, SSD vendors have only a few years at most of addressing such matters. This isn’t to say that enterprise SSDs aren’t compatible. They usually are. But when it comes to optimizing SSDs and integrating them into a specific environment, the hard-drive vendors have seen it all, and this work carries over into their SSDs.

Hard-drive vendors have made several strategic acquisitions and partnerships with the SSD world. For example, WD acquired SiliconSystems in March 2009. Seagate made an equity investment in DensBits for its controller technology and continues to source certain NAND flash from Samsung to stock its hybrid and SSD products.

Hybrid Tech Ready For Primetime

Of course, not all NAND goes into SSDs. One of the most exciting developments in storage this year was the continued maturation of hybrid drive technology. Hybrids are essentially conventional hard drives with a large chunk of NAND flash built into them. This flash functions separately from conventional cache. Rather, it works as more of an SSD for boot-up and commonly used application tasks.

SSDs can be dramatically faster than HDDs for access times and throughput, but hard drives have the counterbalancing advantage of far larger and more affordable storage capacity. Hybrids look to keep the best of both worlds. Early designs launched by Seagate and Samsung in 2007 seemed promising but ran into driver problems with Windows Vista—problems significant enough to essentially stall hybrid development for three years. In 2010, Seagate’s 2.5-in. Momentus XT hybrid drive brought the SSD up from 256 Mbytes to 4 Gbytes and integrated much better with Windows.

However, the second-generation hybrids still had room to improve on the speed boost front. In large part, this was because Windows, while now functional with hybrids (via the ReadyDrive feature), was not optimized for it. At the same time, Seagate had a wide open field of options for how it could refine its algorithms for maximum performance.

The result is that Windows 8 is now built to cooperate with hybrids and assist drives that work to predict what data is used most frequently. This commonly sought data, which includes Windows boot files, gets dynamically stored in NAND. (Generally, any data fetched a certain number of times gets copied into the faster storage medium.) As the SSD fills up, the most recently fetched files knock out the last fetched. This is a greatly simplified explanation of the algorithms that Seagate collectively called Adaptive Memory technology.

Because Adaptive Memory technology copies rather than moves files from magnetic to NAND storage, the most recent Seagate hybrids offer another layer of data protection on top of what is already performed by error correction. In addition, because the NAND handles many operations normally handled by the hard-disk part of the drive, platters can stay idle or spun down longer, potentially saving a significant percentage of the drive’s power consumption and extending drive longevity.

How hybrids will fit into enterprises remains to be seen. We may eventually see hybrids open a new niche between lower-tier storage and mid-tier nearline. Starting now, though, at the end of 2012, the case for hybrids in laptops is overwhelming. For only a few dollars more than conventional client HDDs, users will get a more than tangible speed boost with little sacrifice in storage capacity. Interest from major OEMs continues to climb, with Dell being among the first wave embracing the latest hybrid generation.

“The increased need for computing performance, coupled with data being created at astounding rates, has driven significant attention to the benefit of SSHD (solid-state hybrid drive) technology,” says Glen Robson, vice president and CTO of Dell’s End User Computing Group. “As such, Dell has elected to incorporate Seagate SSHDs across an array of our products. Our view is that SSHDs provide SSD-like performance in many applications while at the same time preserving high capacity and an aggressive price-per-gigabyte position so our customers can maximize the return on their technology investments.”

The Cloud Thickens

If there was one dominant theme in the storage market of 2012, perhaps it was the emergence or expansion of sub-markets. Hybrids are one example. More widespread adoption of SSDs in the enterprise is another, particularly of enterprise-class drives based on multi-level cell (MLC) NAND.

Yet another sub-market seeing lift-off this year is self-encrypting drives (SEDs). Originally stalled because of poor BIOS support, SEDs have slowly gained traction as support has improved. Now, with support essentially universal and volumes continuing to climb, this year has at last seen SEDs reach price parity with their non-encrypting counterparts. In the Seagate Savvio 10K6 model, for instance, there is no premium for the SED variant. Expect this to have a profound influence on encryption adoption throughout the industry and how enterprises go about performing drive retirement.

In terms of sub-market expansion, perhaps the best example was the growth of public and private cloud infrastructure. In a sense, cloud computing harkens back to the outsourcing boom of the 1990s. Rather than paying to set up and maintain mountains of storage on-premise, enterprises can pay for as much storage as they need on-demand from providers. But in addition to outsourcing their storage, companies are outsourcing their datacenter skill sets. This is neither good nor bad. It merely represents a paradigm shift in the market.

Such shifts often require new hardware designs. Until recently, many enterprises knew exactly how to fill their upper-tier storage with SSDs and high-RPM hard drives, but filling the lower tiers was problematic. Large capacity and low price are paramount at this level, so it has been common to resort to client-grade drives, even though such drives are not built to withstand the workloads typical of datacenter applications.

As a result, businesses often lose in long-term support and replacement costs more than they gain in up-front pricing. This is why Seagate recently released its Constellation CS drive, also known as the Seagate Enterprise Value HDD. The 7200-RPM drive family currently reaches capacities of up to 3 Tbytes and features a 24x7 duty cycle, but it is priced closer to client drive levels than any other 3.5-in. offering in the Seagate enterprise lineup. The Constellation CS drive seeks to fill a niche that has been uncovered during the recent “cloud boom.”

Another aspect of fledgling sub-markets is that the channel rarely knows how to address them sufficiently. Enterprises lean on channel partners—consultants, value-add resellers, and system integrators—for help with leveraging new sub-market technologies, but the channel partners themselves first need education and training. Strong vendors eventually face such needs with specialized programs, such as the new Seagate Cloud Builder Alliance. This effort enables the channel to provide accessible solutions for building out cloud storage infrastructures. Everything should be customizable, but staying customizable and reliable can be tricky for enterprises. Tactical education should help make for smoother, more profitable sailing.

All told, 2012 wasn’t the most dramatic of years for storage. But with changes such as these, IT professionals should feel enthusiastic heading into 2013. There are more opportunities for robust, affordable, flexible storage solutions than ever.