The little USB stick on your keychain and the memory in your iPod is fueling a revolution in the enterprise storage world.

It seems everyone is talking about flash memory, a type of solid-state storage that offers faster and more energy-efficient performance than rotating disk drives. The downside is that it's about 20 times more expensive than high-performance Fibre Channel drives, but that's where the popularity of USB sticks and the iPod comes in. Consumers are demanding flash memory and getting it — in digital cameras, the iPhone, the iPod Touch and even the MacBook Air laptop.

The consumer demand for flash and another major event — EMC's entry into the enterprise flash market this year — are combining to drive prices down, making it feasible for enterprise use, experts say. (Compare storage products.)

Big businesses are already starting to use flash storage for I/O-intensive applications, such as Oracle databases, credit card processing systems and stock trading applications. Many observers expect solid-state flash drives to be commonplace in enterprises within a year or two.

"This is the most exciting thing that's happened in storage in 20 years," says John Fowler, the head of Sun's servers and storage division.  

Click to see: Chart about flash storage

Solid state is electrical, unlike rotating drives, which are mechanical and have moving parts that make them inherently slower. Mark Peters, an analyst with the Enterprise Strategy Group, compares a spinning hard drive to your hand hovering over a checkerboard. Just as the drive head needs to move over the right piece of data, your hand has to be in the right spot to grab a checker. With flash, however, there are no physical movements and "everything is always immediately available," Peters says.

Direct- or network-attached?

The experience of early adopter Neovest, a financial services firm in Utah, illustrates the benefits of flash memory and one potentially vexing question customers and vendors must wrestle with.

A couple months ago, Neovest purchased a 160-gigabyte flash device for $4,800 from the start-up Fusion-io, which makes a PCIe flash storage card that's inserted directly into servers.

"As someone who is responsible for processing data and disseminating it out to our clients, we're always looking for ways to be able to handle that data with extremely low latency," says Brandon Farmer, senior network engineer at Neovest.