Hybrid drives, which combine NAND flash memory with traditional hard disk drives (HDDs), were first introduced about four years ago. Reception was lukewarm. More accurately, those early implementations failed.

The biggest problem was that the early models didn’t have onboard data management for the flash component, according to Jim Handy, director of the Objective Analysis research and consulting firm; instead, they relied on data management embedded in Microsoft’s Vista. It didn’t work well.

In their more recent hybrid drives, manufacturers are integrating the data management functionality. And to boost performance, they’re putting in much larger caches compared to the early hybrid drives.

So far, Seagate is the only HDD manufacturer shipping hybrid drives — the Momentus XT, which was introduced in May — but the other drive manufacturers are expected to follow soon.

In a just-released report on the market (“Are Hybrid Drives Finally Coming of Age?”), Objective Analysis predicts that shipments will go from about one million units this year (if Seagate is successful), which represents about $120 million in revenue, to 600 million units by 2016, representing revenue of $34 billion.

Hybrid drives are typically associated with PCs, but Handy says that they can be used anywhere HDDs are used today, including enterprise-class disk arrays.

What’s driving renewed demand for hybrid drives? “Hybrids provide near-SSD functionality with HDD capacity and price,” says Handy.

Can anything stop the expected rapid growth of hybrid drives? “Only if people believe Steve Jobs’ recent statement that hard drives are dead,” says Handy.

For more information on Objective Analysis’ report, see “Are Hybrid Drives Finally Coming of Age?”

(Note: The report is targeted at manufacturers, and is priced at $5,000 for a single copy and $10,000 for a site license.)