The prices of used IBM 3380 disks shot skyward last week as users tried to cope with an unexpected disappointment. IBM had slated a mainframe disk announcement for July 25, then cancelled it at the last minute. Speculation about the forthcoming storage devices had caused the disk buyers to hesitate and awaited the news that never came. When it became clear that IBM had cancelled its scheduled product debut, panic set in. All of a sudden IBM 3380 [AA4 and B4] standards are going for twelve, thirteen grand a box, maybe higher, according to Don Kovacs, who heads lessor Neptune Group’s San Diego office. That’s a $3,000 jump from where prices were just the other day. The current situation, which could last right through Labor Day according to leasing industry executives, is just as uncomfortable for used equipment dealers as for users. Last I looked, we had maybe 25 3380-AA4s or B4s in inventory, reckons Dave Wolff, vice president of El Camino Resources, a lessor headquartered in Northridge, California. Unfortunately, Wolff adds, we have received orders for more than 100. Obviously, we can’t accept all these orders, and we can’t even provide price quotes until we know we can deliver. Third parties that promised customers older 3380s at the lower prices that prevailed until very recently may take a bath. They could be forced into the volatile spot market to buy at any price to avoid defaulting on their commitments. Despite the price bubble, the oldest and least expensive of IBM’s 3380 family disks – standards – are still the cheapest for users that want to add file capacity on an interim basis. When IBM does unveil its new mainframe disks, either later this year or in 1990, customers that have gotten by with 3380 standards will have a smaller investment in equipment they may wish to replace. Even at $13,000 for a 2.5Gb unit, the old 3380 is a relative bargain – on a cost-capacity basis, at least. New 7.5Gb IBM 3380K drives list for $110,300 or $134,400 each, depending on model. Even though buyers ordering multiple units can get substantial discounts, new IBM boxes are much more costly than used ones. Between the original standard 3380s and the current K models IBM sold D and E models; used Ds and Es have risen in price, too, but not quite as dramatically as the standards. Very short-term boom The gyrations in the used 3380 market have been exacerbated by the reluctance of some users to add used 3380Ks for fear the drives will prove to be unreliable. IBM 3380Ks made before last October have suffered a rash of bearing failures that result in permanent data errors. Users who have gone through K failures say that while IBM has done a very good job repairing downed disks, the disruptions caused by the data losses have been extremely annoying. IBM has begun deploying an engineering change for 3380Ks that it believes will catch bearing problems in their early stages. The engineering change will be generally available in the third quarter, after IBM has had time to train its field personnel and distribute required parts, tools and instructions. In the meantime, users are a bit edgy about buying used 3380Ks, and this further concentrates demand on the suddenly scarce older models in the 3380 line. Some shops have tried to get around the problem by installing plug-compatible disks. But National Advanced Systems, generally regarded as the leader in ersatz 3380Ks, is pretty much sold out right into the fourth quarter, not only in the US but in Europe, too, where disk market conditions mirror those in the States. Hitachi [which supplies the NAS disks] is unlikely to ramp up production to take advantage of what may be a very short-term boom, observes Jim Porter. Porter’s Disk/Trend, of Mountain View, California, is the storage industry’s leading analyst. While the Japanese could divert shipments from their domestic market to other customers worldwide, Porter continues, such a major shift would not be consistent with their past behaviour. – Hesh Wiener Copyright (C) 1989 Technology News of America Co.
