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May 2018, Vol. 17, No. 3

Three trends causing the rapid commoditization of AFA storage

The all-flash array market has seen a precipitous price decline over the past few years. AFA prices of $15 or $16 per gigabyte of raw capacity have fallen to $1 or less. Discounts of 80% or more are frequently offered. Storage buyers often believe they're getting a good price from a big-name vendor, but then another vendor comes along at the last minute hungry for a deal and offers a better price. The AFA storage system price war is more surprising when considering how the NAND chip shortage of 2017 and early 2018 caused SSD pricing to increase during this same timeframe. What's the root cause of the rapid commoditization of AFAs? A better understanding requires some context. Skimming the cream High-end products and services have always been subject to commoditization. The first to market in a category typically carries a premium price; that's known as cream skimming. As competition increases, the price gradually declines. These products and services use feature and brand differentiation to maintain higher pricing. But, ...

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