The Situation

Disastrous flooding has impacted much of Thailand, resulting in hundreds of deaths, widespread devastation, infrastructure issues such as road blockages and power outages, and a major impact on global business — specifically hard drive production.

According to an IDC report, Thailand accounts for almost half of worldwide hard drive production, and most of that has been impacted by the floods. Flooding has literally halted the production of many major manufacturers, such as Western Digital and Toshiba. In addition, many companies that supply hard drive components are under water, and unlikely to resume operations for the foreseeable future.

Thailand flooding

This has resulted in a global shortage of hard drives. Specialists are estimating that regular production could resume as early as January — and as late as the summer of 2012. Until the situation is resolved and producers are operating at full capacity, every company selling products including hard drives or components will be challenged by both product availability and dramatic price increases.

Already, hard drive prices have increased substantially, and major consumer goods companies have raised prices and are showing stock shortages on key items.

Our Response

First and foremost, the management team and employees of Observint Technologies — and its portfolio companies — have been following the situation very closely, and are extremely saddened by the catastrophic events in Thailand. The company maintains extremely strong relationships with supply partners throughout the world, and wishes for a quick recovery for all of our friends, partners, and others that have been impacted.

Fortunately, the direct relationships we maintain with our suppliers afford Observint a unique position — relative to many of our competitors — to minimize the impact of this disaster on our customers. As a well-funded, stable company, we are able to quickly anticipate and react to global market conditions, and we have already taken necessary measures to insulate our customers from major price disruptions or product shortages.

At this time, we are confident that we will be able to meet the expected product needs of our loyal customers for the extent of this crisis, and will continue to procure additional supply as necessary. As costs increase, we may need to adjust our pricing to reflect these changing market conditions — and our actual costs — but we will not irresponsibly raise our prices to profit from this situation.

If you have any additional questions relative to this crisis, expected product availability, or the potential impact on your business, please don’t hesitate to contact one of our expert sales consultants at 877-995-2288.

Links to news online about the situation:

• Thai Flooding Impact on Tech Companies, Suppliers
• Thai Floods Increase Hard Drive Prices, Impact Supply Chain
• Thailand Floods Could Have Severe Impact on 2012 PC Shipments
• Thai Floods May Take Months to Recede, Delaying Factory Restarts

About Brian Wood, CEO of Observint Technologies

Brian has served as Chairman of the Board since the organization was formed and acquired Supercircuits in August 2006. Brian has also served as President and CEO of all Observint portfolio companies since 2008. Prior to joining the team, Brian spent 18 years with Dell, Inc, where he held a variety of executive and general management roles including VP/GM of the Dell US Public Sector business and VP/GM of the Dell Large Enterprise business. Prior to joining Dell, Brian was a faculty member at the University of Texas at Austin and an independent consultant. Brian holds a B.S. degree in Biology from Emory University and an MBA from the University of Texas at Austin.