The Impact of SSDs on Coffee Prices

Coffee 5-year Prices (BarChart.com)A friend who trades in commodities has been having a difficult time lately.  He placed a sizeable bet on coffee futures back in 2011, only to see prices slide from a $314 peak to today’s $151 prices.

So why would this appear in the pages of The SSD Guy blog?

In a nutshell, coffee demand is falling thanks to increased use of SSDs.  It’s not that people were giving their computers coffee to speed them up, nor were managers ladling coffee into their employees to get more out of them when the real problem was slow PC performance.  Instead it’s about boot-up time.

For the past few decades the average worker comes into the office, turns on the PC, then goes to the coffee room to get the morning’s first cup of brew while the PC slowly finds its way to full operation.  While in the coffee room that worker may encounter workmates, and delve into a heady conversation about last night’s TV programs, or a sporting event, or even politics.  This might turn that one-cup coffee-room visit into a 2-cup session.

Now that savvy bosses are equipping their employees’ PCs with SSDs the employees are getting something useful as soon as they switch on the power.  Instead of chatting with a colleague, they get drawn into their e-mail, and may work for a couple of hours (or even right up to lunch) before discovering that they still haven’t had their morning cup of hot java.

The resulting fall in demand has caused coffee bean prices to decline significantly.  Today’s prices are less than half of their level 4 years ago according to BarChar.com.

It’s no surprise that a drop in demand results in a significant price drop.  My evil twin The Memory Guy has expounded for years that this is the nature of a commodity market.  When supply exceeds demand a commodity’s prices can drop pretty fast.  It happens to technology commodities like NAND flash and DRAM the same way that it hits agricultural commodities like coffee and pork bellies.

There’s nothing to be done about it.  The SSD makers aren’t any more interested in the welfare of coffee plantation owners than the coffee folks are about technologists.  The more SSDs that sell, the worse life will be for the coffee farmers.

But it is still an interesting phenomenon, so that’s why this post found its way into The SSD Guy blog.  Plus, it’s April Fool’s Day!

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Jim Handy
Objective Analysis
SSD Market Research
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Jim.Handy (at) Objective-Analysis.com

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