Hard Drive Cost Per Gigabyte

By | July 11th, 2017

Hard Drive Cost

For hard drive prices, the race to zero is over: nobody won. For the past 35+ years or so, hard drives prices have dropped, from around $500,000 per gigabyte in 1981 to less than $0.03 per gigabyte today. This includes the period of the Thailand drive crisis in 2012 that spiked hard drive prices. Matthew Komorowski has done an admirable job of documenting the hard drive price curve through March 2014 and we’d like to fill in the blanks with our own drive purchase data to complete the picture. As you’ll see, the hard drive pricing curve has flattened out.

75,000 New Hard Drives

We first looked at the cost per gigabyte of a hard drive in 2013 when we examined the effects of the Thailand Drive crisis on our business. When we wrote that post, the cost per gigabyte for a 4 TB hard drive was about $0.04 per gigabyte. Since then 5-, 6-, 8- and recently 10 TB hard drives have been introduced and during that period we have purchased nearly 75,000 drives. Below is a chart by drive size of the drives we purchased since that last report in 2013.

Hard Drive Cost Per GB by drive size

Observations

  1. We purchase drives in bulk, thousands at a time. The price you might get at Costco or BestBuy, or on Amazon will most likely be higher.
  2. The effect of the Thailand Drive crisis is clearly seen from October 2011 through mid-2013.

The 4 TB Drive Enigma

Up through the 4 TB drive models, the cost per gigabyte of a larger sized drive always became less than the smaller sized drives. In other words, the cost per gigabyte of a 2 TB drive was less than that of a 1 TB drive resulting in higher density at a lower cost per gigabyte. This changed with the introduction of 6- and 8 TB drives, especially as it relates to the 4 TB drives. As you can see in the chart above, the cost per gigabyte of the 6 TB drives did not fall below that of the 4 TB drives. You can also observe that the 8 TB drives are just approaching the cost per gigabyte of the 4 TB drives. The 4 TB drives are the price king as seen in the chart below of the current cost of Seagate consumer drives by size.

Seagate Hard Drive Prices By Size

Drive Size Model Price Cost/GB
1 TB ST1000DM010 $49.99 $0.050
2 TB ST2000DM006 $66.99 $0.033
3 TB ST3000DM008 $83.72 $0.028
4 TB ST4000DM005 $99.99 $0.025
6 TB ST6000DM004 $240.00 $0.040
8 TB ST8000DM005 $307.34 $0.038

The data on this chart was sourced from the current price of these drives on Amazon. The drive models selected were “consumer” drives, like those we typically use in our data centers.

The manufacturing and marketing efficiencies that drive the pricing of hard drives seems to have changed over time. For example, the 6 TB drives have been in the market at least 3 years, but are not even close to the cost per gigabyte of the 4 TB drives. Meanwhile, back in 2011, the 3 TB drives models fell below the cost per gigabyte of the 2 TB drives they “replaced” within a few months. Have we as consumers decided that 4 TB drives are “big enough” for our needs and we are not demanding (by purchasing) larger sized drives in the quantities needed to push down the unit cost?

Approaching Zero: There’s a Limit

The important aspect is the trend of the cost over time. While it has continued to move downward, the rate of change has slowed dramatically as observed in the chart below which represents our average quarterly cost per gigabyte over time.

Hard Drive Cost per GB over time

The change in the rate of the cost per gigabyte of a hard drive is declining. For example, from January 2009 to January 2011, our average cost for a hard drive decreased 45% from $0.11 to $0.06 – $0.05 per gigabyte. From January 2015 to January 2017, the average cost decreased 26% from $0.038 to $0.028 – just $0.01 per gigabyte. This means that the declining price of storage will become less relevant in driving the cost of providing storage.

Back in 2011, IDC predicted that the overall data will grow by 50 times by 2020, and in 2014, EMC estimated that by 2020, we will be creating 44 trillion gigabytes of data annually. That’s quite a challenge for the storage industry especially as the cost per gigabyte curve for hard drives is flattening out. Improvements in existing storage technologies (Helium, HAMR) along with future technologies (Quantum Storage, DNA), are on the way – we can’t wait. Of course we’d like these new storage devices to be 50% less expensive per gigabyte then today’s hard drives. That would be a good start.

Andy Klein

Andy Klein

Director of Product Marketing at Backblaze
Andy has 20+ years experience in technology marketing. He has shared his expertise in computer security and data backup at the Federal Trade Commission, Rootstech, RSA and over 100 other events. His current passion is to get everyone to back up their data before it's too late.
Andy Klein

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  • Gucek

    the cost/GB has flattened, because there is no competition anymore.
    I remember when there was pretty strong price war and many consumer drives had 3 year warranty. since it wasn’t that profitable – at some point all of them except Samsung got back to 1 year warranty.. and then Samsung HDD division was bought by Seagate.. and this is basically the end of story.

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  • Max

    The “puzzle” of the flattening cost trend disappears if you look at tb/platter instead of tb/unit.

  • The Dave

    Given Moore’s Law, or at least it’s storage analog, wouldn’t bytes per dollar with a logarithmic y axis be more interesting?

    Or even better, bytes per Big Mac?

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  • Blissex

    Some very useful comments by an archival/storage expert whom I think very sensible and well informed:

    https://www.backblaze.com/blog/hard-drive-cost-per-gigabyte/

  • What’s stopping that chart to say price per terabyte instead of gigabyte? ‘Approaching zero’ is a pretty moot point here when we bound 8 fold every so many years on the standard size of drives. IE: we were using MB drives in the 90s, I don’t see your chart reading in price per megabyte.

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  • Iain McClatchie

    Doesn’t this challenge your business model, as well as others? I thought BackBlaze was able to offer unlimited backup for a fixed price because, over time, storage costs were decreasing exponentially, and the integral of an infinitely long decreasing exponential is _finite_.

    • There are infinite numbers between 1 and 0.

    • Aitor Bleda

      I dont think so.

      The current model of storage greatly benefits Backblaze.
      People are stopping their data accumulation practices and renting space + virtual property, “libraries”.
      This means the data per client increase is decreasin at about the same speed as the cost per gb is falling.
      It also means that HDDs can be used for longer, and that is also a good thing for backblaze.

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  • khanmein

    Are you sure? WD10EZEX still selling approximately below ~$60 in Malaysia whereas Amazon stick with the price $49.99 for a long time.

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  • Paul

    You suggested only one possible reason that prices are no longer dropping as they once were. Obviously you aren’t in a position to prove any reason, if it is even a provable thing. But the comments already got to another one – consolidation.

    So here are the top ones as I see it:
    * industry consolidation and lack of competition (this probably COULD be added to the graphs above, but there were so few manufacturers to begin with, correlation would be hard to establish)
    * consumer wants/needs. Do you know anyone with a 6TB disk? An 8TB disk? Multiples of either? Putting a finer point on it – what consumers are even buying spinning disks at all any more? Bigger than 2.5″ format (capping at 2TB these days)? Sure, a few of us geeks have big disks, one or more, in NAS or as external backup disks. But – internet speeds have (slowly) improved, so people can often do cloud-only backups (driving your business Backblaze), and they don’t need or want to store their videos or music locally. AND real needs have changed…. At one time, each individual consumer might generate or save photos, audio files or movies, and even documents that all added up to quite a bit of storage, and just kept getting bigger as quality improved. It seemed like there was no end to the data growth of consumer storage. But – documents really only seem to get so big. One can really only take so many photos, and the problems of managing them go up with the number you take. And at some point the resolution of the photos stops making much difference. Or the quality of your music files. Or, eventually, video. And that is the majority, by size, that consumers store.
    I wonder if the data growth projections factored this in. It seems likely to me that the businesses of the world will always come up with new ways to use storage space, but if consumers have effectively stopped buying hard disks, that will definitely impact the total number sold.
    * technology changes. 4TB->6TB marks the boundary for some relatively important technological changes. Could it be said that all the way up to 4TB, every new generation of hard disk was a relatively incremental change on the same technology? But now we’re putting in helium, and requiring the disk to actually heat up before you can write. PLUS the normal increment of just storing more bits. That is big – and it may be those changes WILL come down in price, but more slowly than the more incremental changes of the past. Or not. It is not like helium is ever going to be as cheap as air, and scientists are genuinely worried we might run out.

  • Matt Drury

    I love living in the future.

    My first hard drive was 5 megabytes (just enough to hold a single MP3, had they been around in 1983).

    It was $2,495 for 1/200 of a gigabyte (~$6,095 in today’s monies).

    If I can math today, $500/megabyte is $500K/gigabyte, $500M/terabyte.

    I can get a 1TB drive via Amazon for $40. Much better deal.

    • LouisFineberg

      The future isn’t what it used to be.

      • Rationalific

        “The future isn’t what it used to be.” Perfect comment, and so true! Remember, a 69-year-old in 1969 would say, “When I was born, we didn’t have cars or planes. Now, we’re landing on the moon.” If that man then lived to be 117, then in 2017, he’d see no major changes with cars (except for design), planes (including design), or space travel…but he would have seen major changes with computer graphics, the internet, and data storage. I very much hope that we are not at our own “1969”, but instead of cars and planes stagnating, it is now computer graphics, the internet, and data storage. But I have a feeling that we’re slowing down in that aspect of things. The Boeing 747 was first introduced in 1970 (47 years ago), and they are still at all major airports (even if they just recently ceased production). In the year 2100, will people still be using computer models from the year 2053? I hope not.

        • Guest_47

          That’s the way of the S-curve. Everything plateaus out in the end. Or if one were even more pessimistic, one would consider the Elliott wave, where periods of progress will be followed by periods of decline (although for not as long as the preceding advance).

          The low-hanging fruit have been picked. We have exploited silicon technology (which is easy to manufacture) to its potential. Sure there are alternatives in the pipeline, but each are more costly to manufacture than the last.

          With hardware coming to the end of the S-curve, software is now just starting out. Weak AI will be the future and we will see many advances in that area. It’s not the panacea of all things, but it will drastically change the world much like the internet did. Yet that has it’s limits. This is not strong AI, where each generation can improve itself to the point of singularity – that’s a long way off. When the weak AI curve flattens out, perhaps within our lifetime, the world will enter into a period of stagnation, before a totally new form of technology comes along beyond 2100.

          There’s quantum computing, nano replication, and of course strong AI, but those are much harder than what the media makes it out to be. It’s unlikely we will stumble into something as miraculous as CRISPR again.

        • Norbert

          Boeing 747, apart from the outside looks a modern 747 8 has nothing to do with the original 747. Unfortunately 99,99% don’t know this because all that matters to them is appearance. But it’s simply not true everything is static. Also a car 1920 has, apart from having 4bwheels for practical reasons nothing in common with a 2017 car.

  • Rudolf van der Berg

    No, really no… You are making that same mistake Christensen wrote the Innovator’s Dilemma about. You are looking at yesterday’s technology, while the market is moving from spinning discs to stacks of chips. Every technology bottoms out at some point, this however says nothing about the storage market. What we should be wondering about is the alternative technologies that are lurking in the corner. SSDs are now ten times the price of spinning platter HDs on a per GB basis. However chip type storage is moving quickly into everything that needs it. The history of the industry has shown that the price of the new will eventually drop significantly below that of the old.

    Everybody wants and needs more and faster storage. Chips of some form appear to be the way to go. They end up everywhere and take over the volume of the market. TCO-wise they may be a decent deal too. What is there against chip based storage at less than 1ct/GB?

    • Rudolf – I’d never say never, but the 10X has been with us a long time. Do you think we’ll see the size gap close soon, even over he next decade? The 4TB for $130-140 seems the sweet spot for HDD. It feels a long way off for there to be a 4TB SSD offering at sub $500.

      • gavingreenwalt

        It’s currently 10X but about 4 years ago it was more like 15x. So if the trend line holds…

  • Stiennon

    So are you replacing drives or adding 75,000 drives? When is a 1Tb drive too little to justify taking up rack space? Are power costs per year more than the cost of the drive?

    • Vince

      Didn’t backblaze replace 1TB drives ages ago? I’m sure I remember them saying no more 1TB drives.

    • Chris G. Sellers

      There is also the cost (or benefit) of blast radius upon failure. That mostly depends on your bucketing size for services. If you RAID across pods, then it is not as important, except for the data mobility problem in the re-sync process….

  • Alvaro Carneiro

    I may be wrong, but I believe there are only two manufacturers: WD and Seagate.

    Other brands are owned by WD.

    This will not help price drop.

    • Skal Tura

      Almost. FCC wanted to avoid the current situation and forced WD to sell HGST 3.5″ business to Toshiba, including all IP.

      But Toshiba & HGST are small fishes and we are in Duopoly, which is the sole reason of the high pricing FCC wanted to avoid.

    • Peter Fuzessery

      hitachi makes drives..not owned by WD…and Toshiba makes drives too..not owned by WD. there are others just not as common and not as popular.

    • Cameron Fenton

      There are three:

      1. Western Digital (~43% market share in 2016)

      2. Seagate (~39% market share in 2016)

      3. Toshiba (~17% market share in 2016)

      Every other brand you see is a subsidiary or licensee of one of those companies.

  • I remember buying an Apple branded Lacie drive, 3GB, for $300. That’s $100,000 for the terabyte I now complain isn’t dropping fast enough. The article, and the charts, are great. I’d love to see one that goes back a couple more decades. And include SSD. For all the talk of spinning drives dying a slow death, I still see SSD at nearly 10X the cost of HDD. Cheap enough to be the boot drive in desktops, but I’ll still fill the extra bays with HDD.

    • Robert Grant

      Yeah, but Apple haven’t sold a hard drive with such a high markup for over two years, now :-)

    • Trip66

      True but not anymore. Any apple branded drive of say 1, 3, 4tb etc isn’t an apple hard drive anyway it’s usually a Toshiba or Hitachi at least in laptops but now they have their proprietary SSD in the newer laptops which can’t be replaced anyway (not by an end user anyway) apple is ala carte now which sucks. No more upgrading your MacBook pro hard drive or ram. It’s all soldered on the logic board so you buy what you will need to still be sufficient in a year or two until you can afford to buy another entire MacBook or MacBook Pro instead of being able to just add faster internals or more RAM which sucks. And because of that I will never own another Apple laptop ever. I can buy a much cheaper Windows machine and Hackintosh it and there are several out there that are damn near Just As Nice in build quality now and several hundred dollars cheaper with the same exact specs and still have upgradeable Hardware inside. I hate apples new ala carte laptop system it sucks. You going to have to buy one every few years now instead of just upgrading the one you have that’s perfectly fine