Thailand was tragically flooded last year. The number of surprise alligators in the region also likely increased. As home to much of the world’s production capacity for hard drives, the shutdown of facilities caused the cost per gigabyte stored on magnetic hard drives to balloon to prices not seen since the middle of the last decade. Demand dropped for hard drives. Value-driven consumers may have opted for alternatives such as more expensive solid state drives (SSDs) or removable media like DVDs. Other purchases may have been deferred, playing catch-as-catch-can with hard drives already owned until prices begin to have some semblance of normalcy. The obvious. But none of this would have merited such a… cache-y blog post title.

In the year or more that people in the industry estimate it will take for hard drive prices to return to pre-flood prices, there ought to be changes to the fabric of the Internet. Cisco estimates Internet traffic to increase by about 45% annually; that is, by the time hard drives return to the same price as they were last September (let alone reach the price they would have been if the normal trend in reduced prices had continued unimpeded), we humans will be bandying somewhere in the neighbourhood of 50% more data over the Internet. Meanwhile, the per-Gbps cost (and per GB) of sending data (from the Internet Overlords’ perspective, not the consumer’s) has fallen by about 45%.

As a result, for the next few years, caching using hard drives is going to be a (relatively) more expensive proposition than it used to be. This ought to cause a long-term increase in bandwidth usage over the non-flood scenario. For consumers, this might mean data streaming and remote backups become more attractive options. Instead of keeping all those multi-gigabyte TV shows locally, downloading it on demand becomes more desirable. Could flooding in Thailand help companies like Cisco and Netflix?

Disclosure: I have positions in neither CSCO or NFLX (or any derivatives with those as underlying assets).

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