Flash Dance: Lenovo Execs Get Cold Feet, Back Out Of 'Project Spark' SSD Demo

Lenovo pulled the plug today on the demonstration of a new solid state drive, citing the risk of losing a competitive advantage in the crowded, low-margin SSD market.

’Essentially, the leadership stepped back and did a reassessment of the risk for the loss of a competitive edge; they thought the risk was too great in doing it now versus doing it closer to release,’ which is set for mid-2017, a Lenovo spokesman told CRN.

’This shouldn’t have happened, and we’re going to have to talk about that. It’s a big issue. It’s a first for me in my career,’ the spokesman said. Scheduled for today at the Flash Memory Summit in Santa Clara, Calif., the unveiling was intended to be a preview of Lenovo’s ’Project Spark’ data center SSD, which was developed over the last 18 months with Seagate Technology, NxGn Data and Amphenol, and boasts up to 8TB of capacity.

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Project Spark is the first foray into data center SSDs for Lenovo, and it lands the Chinese PC powerhouse in an exploding market where most vendors have to scrap for slivers of market share while Samsung and SanDisk dominate, and Lenovo decided not to show its hand.

’Flash storage in general is an extremely competitive space,’ the Lenovo spokesman said. ’It’s a very spec-driven war right now. How much capacity can you cram onto them? How small can they go? How little power can they sip? The window where innovation gives you a lead is very, very small.’

With the data center SSD market already a low-margin business, Lenovo’s main challenge in that space will be keeping prices within reach of a wide spectrum of buyers, said Joe Lore, sales director at Sunnytech, a Woburn, Mass.-based solution provider that does business with Lenovo.

’Most of what we do is Intel white box,’ Lore said. ’Some of the [vendors] want you to buy their drive for their server, which sometimes is double the price.’ Lore said he sells Intel’s 540 series SSDs for about $329 per TB. Prices for HPE and Dell SSDs ’have gone crazy,’ he said.

’Lenovo needs to keep the price fairly reasonable, maybe one-and-a-half times what a comparable Intel is. Not two or three times, not like HP or Dell. I’d say if we’re going to be comparable for Lenovo, we’ve got to be able to keep it under the $500 price point, then people will buy it. Customers want it to be fast. I have a customer that pulls dental x-rays through the network. He wants it instantly, but he’s not going to spend $1,000 or more.’

Lenovo has already committed to an aggressive data center price battle with legacy vendors, and a line of data center-focused SSDs gives the company an opportunity to play in a rapidly growing market. Flash-based storage and memory is taking market share from traditional hard drives, and the industry shipped nearly 31 million SSDs in the first quarter, according to TrendFocus.

Only about 4 million of those drives were aimed at the server market, as opposed to the PC market, but that’s a nearly 70 percent increase in shipments compared to the same period a year earlier, according to TrendFocus.

The market is dominated by Samsung, which commanded a 42 percent market share in first-quarter shipments. SanDisk, the next-biggest SSD vendor, finished the quarter with a 12.8 percent share. The rest of the market is divided into into tiny slices shared among the likes of Intel, Micron, Toshiba and others.

Like Lenovo, Toshiba seems to be upping its SSD game, and recently released an 8TB unit of its own. Still, in the war for capacity, Samsung wins with an SSD that boasts nearly 16TB. SSDs from key Lenovo competitors Dell and HPE top out at 3.84TB.

Lenovo is banking on the fact that its new SSD is small, 31.5mm high by 112.5mm deep by 5.5mm thick, about the size of a memory stick. The tiny dimensions are intended to capitalize on a market quickly being dominated by 2-socket and 4-socket servers. Project Spark will be integrated into Lenovo’s future x86-based data center infrastructure, and it, Seagate, NxGn and Amphenol plan to advocate for standards for data center SSDs based on the Project Spark design, Lenovo said.

The company is also in the midst of phasing out its ThinkServer line in favor of the System X line of x86 servers acquired from IBM in late 2014. That effort will include slashing prices of X-series servers almost in half to bring them in line with current ThinkServer prices.