Thailand Flooding Leads to Sharp Price Increases in Technology Hardware

The Thailand flooding portends a crisis for businesses and consumers who are moving toward cloud computing or offsite data storage, especially if they are projecting rapid growth in their needs over the next 12 months.

It is not yet known the extent of the damage caused by the flooding in Thailand, but some estimates say about 20% of the country is now flooded. Thailand happens to be one of the largest producers of hard drives in the world. The technology industry is bracing itself for scarcity.

According to reports in the New York Times and Forbes, business initiatives that rely on cloud computing and off-site storage may have some setbacks to deal with in the next two to three quarters. Complaints about too much production concentration in one small area of the world are falling on deaf ears. A scenario of production created by economic conditions in less volatile times simply illustrates the complaints many people have about corporate greed and displaced workers in the American economy.

According to John Monroe, research vice president at Gartner, a technology research firm, there are more ramifications of the flooding in Thailand than what people are considering presently.

Where would we be without cloud computing? Monroe gives examples of Google and Facebook whose dependency on high-capacity storage is critical. If storage does not have the capacity to grow at its normally accelerated rate, the culture of these two giants, which depend on immediacy and “present status,” could suffer immensely. Major problems could be just around the corner for the internet, which is to say, those who use it and rely upon it heavily for everything from business to socialization.

Early guesses are that the impact could last for about a year at most, but really, no one knows just how devastating the floods are, nor how much has been destroyed. The assumptions are that the hard drives needed for technology production have been met and shipped through the December orders. But, consumers can expect the price of goods and storage to rise quickly, in part because of the coming holiday shopping season, but also because they must brace themselves for scarcity for the next 12 months. They will simply collect their anticipated profits in advance.

If hardware producers take their cues from oil companies, hard drive buyers will find that the crisis may establish a permanent safety threshold for future pricing. The ones who suffer will be the users of future storage. (twitter @twt54)

Sources: New York Times, Forbes

Article first appeared in Blogcritics as Thailand Flooding, Cloud Computing, and Storage.

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