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2003, January week 1, news archive

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Squeak! - Venture funds in storage
Squeak! - the Solid State Disks Buyers Guide
Squeak! - the Fastest Growing Storage Companies
Squeak! - the 10 biggest storage companies in 2008?
article:- Sanitization Methods for Cleaning Up Hard Disk Drives
Squeak! - Why are Most Analysts Wrong About Solid State Disks?
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ARMONK, New York - January 7, 2003 - IBM today announced a new, global agreement with Cisco Systems, Inc. to offer customers open storage networking solutions, expanding the two companies' reach into new growth areas for data intensive computing. Building on the successful strategic alliance between IBM and Cisco, this agreement will enable IBM and IBM Business Partners to offer customers Cisco's MDS 9000 Family products, beginning with the Cisco MDS 9509 Multilayer Director, Cisco MDS 9216 Multilayer Fabric Switch, and associated modules. IBM expects to finish interoperability qualification of these products and announce their availability by the end of the first quarter in 2003.

"IBM is the first vendor to enter into a reseller agreement for Cisco's new multiprotocol SAN switches, reinforcing IBM's strategy to offer customers the widest range of storage networking solutions," said Roland Hagan, vice president of marketing for Storage Products Division, IBM Systems Group. "IBM and Cisco have had a long, successful relationship working on storage networking solutions. This agreement will enable us to expand to a new customer set including telecommunication customers and customers interested in converging fibre channel and IP storage area networks." ...Cisco Systems profile, ...IBM profile


Watertown, Mass. and Milpitas, Calif. - January 7, 2003 - Sanbolic, Inc. andLSI Logic, today announced a strategic relationship and joint product certification of Sanbolic's Melio FS file system and Kayo volume sharing software with a complete line of LSI Logic Fibre Channel HBAs. The alliance provides a framework for SAN interoperability, performance and scalability enhancements for media-rich applications in clustered environments.

Melio FS is a highly scalable file system that is expected to be initially used in large file applications for shared or clustered environments. In these applications performance and shared access to data is a requirement of the workflow process. The integration of Sanbolic's Melio FS and the Fusion-MPT™ (Message Passing Technology) based LSI Logic 2 Gb/s, dual-channel LSI44929O Fibre Channel storage adapter in media-rich applications provides the performance and scalability required to deliver as much as 360MB/s of sustained read and write throughput per system in a cluster.

Kayo 3.0 is Sanbolic's volume sharing software for workgroup size shared storage environments. Kayo 3.0 uses a technology where all users have equal rights to access the data on the shared storage, using volume locks to regulate who has write and read access. Kayo 3.0 expands the storage network options for users, providing an easy to use interface that is seamlessly integrated into Windows Explorer. Kayo 3.0's advanced design and integration with existing Windows tools, allows customers to take full advantage of Kayo 3.0 with minimal training. ...LSI Logic profile, ...Sanbolic profile


FREMONT, Calif. - January 7, 2003 - BiTMICRO Networks announces that it will introduce its low-cost Ace-Disk flashdrive at AFCEA West 2003 Conference to be held in San Diego, California, January 14-16, 2003. The newly released Ace-Disk flashdrive is a solid-state disk that is fully compatible with the ATA/IDE interface. It can be used as a drop-in replacement for standard 2.5-inch ATA/IDE hard disk drives in mission critical environment requiring ruggedness, reliability and ATA/IDE compatibility. The Ace-Disk is ideal for military, airborne, transportation, telecommunications, instrumentation, and other industrial and embedded computing applications. ...BiTMICRO Networks profile


PALO ALTO, Calif - January 7, 2003 - HP today introduced two new DVD writers that allow users to easily preserve, edit and share video and data faster than ever before. Capable of writing an entire DVD (4.7GB) in as little as 15 minutes using a write-speed of up to 4X, the HP DVD 300i internal DVD writer and the HP DVD 300e external DVD writer enable users to quickly preserve and edit video, store data, record music and back up and transport information on DVDs and CDs. The HP DVD 300i and HP DVD 300e are built on the +R/+RW format. Both drives support direct-to-DVD recording from a digital camcorder with a few clicks of a mouse. The HP DVD 300e drive also offers the flexibility of working through either an IEEE1394 (fire-wire) or USB 2.0 connection, both of which are included.

Also included with both drives is the Veritas software suite, which includes RecordNow, DLA (Drive Letter Access) and SimpleBackup with disaster recovery. The HP DVD 300i internal DVD writer is expected to be available at major retail outlets in the United States later this month at an estimated U.S. street price of $299, while the HP DVD 300e external DVD writer is expected to be available at major retail outlets in the United States in February at an estimated U.S. street price of $399. ...HP profile


CARLSBAD, Calif. - January 7, 2003 - Dot Hill Systems Corp. (AMEX:HIL), today announced it has narrowed the range of its earlier fourth quarter 2002 revenue guidance of $10 million to $20 million, and expects revenue to be between $15.5 and $16.5 million (75% up on the previous quarter). Annual 2002 revenues are estimated to be between $46 and $47 million. In the fourth quarter 2002, Dot Hill will take a charge in the range of $3.5 to $4.5 million related to excess inventory of the SANnet I product line along with excess and unused facilities. Combining these charges with up-front costs associated with Solectron's ramping up the first of four anticipated products, Dot Hill estimates fourth quarter losses in the range of $0.45 to $0.55 per share. Dot Hill paid off its U.S. line of credit and its available cash balances as of December 31, 2002 are estimated to be between $11 and $12 million. Dot Hill's guidance for 2003 is total year revenue targeted at $153 million ...Dot Hill profile

Editor's comments:- if Dot Hill were to announce a "reseller of the year award", it would surely have to go to Sun Microsystems, which has been a big factor in this growth. (Sun resells a LOT of Dot Hill's rackmount storage.) However, that award is unlikely to happen, because Scott McNealy hates the idea of Sun being called a VAR. When McNealy was really trying hard to say something rude about Dell in a Red Herring interview in May last year, he is reported to have called them "a reseller for Intel and Microsoft".



HOUSTON, Texas - January 7, 2003 - Texas Memory Systems announced today a partnership with NetStor Technology Group Inc. to bring the World's Fastest Storage®, the RamSan solid state disk, into the Canadian marketplace.

"Since entering the commercial market, it's been our strategy to expand our sales channels geographically," says Woody Hutsell, Marketing Director for Texas Memory Systems. "With Netstor Technology guiding us, we can bring our performance-leading solid state disk solutions to enterprises in Canada previously inaccessible to us."

"The Canadian market represents about 10% of IT spending in North America. North American companies, increasingly see faster applications running with faster multi-processors while waiting on slower hard disk-based storage. With the acceptance of solid state disk, we are able to increase the performance of an application by as much as 4 times the performance of a disk array." says Steven Cheung, managing partner of NetStor Technology Group Inc. "Solid state disk from Texas Memory Systems' provides the greatest price/performance value in the market. RamSan solid state disks are the fastest storage devices commercially available... and have a higher MTBF than conventional hard drives. They are typically used for I/O or bandwidth-intensive applications such as OLTP, batch processing, data warehousing and data acquisition." ...NetStor Technology, ...Texas Memory Systems profile


LOUISVILLE, Colo. - January 7, 2003 - StorageTek® (NYSE:STK) today announced that it expects fourth quarter 2002 financial results to be stronger than anticipated. Fourth quarter 2002 product sales revenue is expected to increase approximately 25% over third quarter 2002 and service revenue is expected to be approximately $200 million. Earnings for the fourth quarter are anticipated to be in excess of $0.45 per diluted share. This is above current consensus expectations (as reported by Thomson First Call) of $0.36 per diluted share.

Patrick J. Martin, StorageTek chairman, president and chief executive officer, said, "We are pleased to announce better-than-expected results for the fourth quarter as we remained focused on our strategy of growing the business across all product lines. Additionally, our cash position increased to approximately $650 million. We look forward to providing additional color on our fourth quarter and full-year 2002 results during our earnings call on January 22." ...StorageTek profile


MELVILLE, N.Y. - January 7, 2003 - FalconStor Software, Inc. today announced that NETGEAR Inc. will license NIC Express advanced failover and load balancing software for NETGEAR's new line of advanced Gigabit Ethernet adapters. The NIC Express solution will enable NETGEAR customers to enhance their servers and workstations with advanced network failover and load balancing functionality that is currently being used by some of the world's most fault tolerant environments, including trading operations at Bear Stearns, the U.S. Military and various 911 operations across the country.

NIC Express keeps the data flowing for world's most mission-critical networks, and allows companies to build truly fault tolerant networks. The software establishes redundant links across all network data paths and maintains non-stop data availability by intelligently re-routing data packets around network trouble spots such as physical faults, logical faults and bottlenecks.

NIC Express will be bundled with NETGEAR's GA621 Fiber Gigabit Ethernet Card and GA622T Copper Gigabit Ethernet Card. The combined solution supports any Windows NT, Windows XP and Windows 2000 platforms, and will be available Q1 2003. ...FalconStor Software profile, ...NETGEAR


BOULDER, CO - January 7, 2003 - Exabyte today announced the availability of VXA-2 with FireWire, a new version of its VXA-2 tape drive specifically designed for Mac® users' intensive multimedia storage needs. Exabyte is unveiling its newest product at the Macworld Conference & Expo 2003. The VXA-2 tape drive is designed to deliver a native capacity of up to 80 GB and a compressed capacity of up to 160 GB, while maintaining full read and write compatibility with the first generation VXA-1 tape drive. The VXA-2 with FireWire has an MSRP of $1,693. ...Exabyte profile


MILPITAS, Calif. - January 7, 2003 - LSI Logic Storage Systems, Inc. today announced that it has integrated Seagate's 10K.6 Cheetah®146GB disk drive with its storage controllers so customers can run business-critical applications faster without being forced to choose between price per megabyte and performance. With integration of the new drive, LSI Logic Storage Systems can now provide customers with a 14% increase in footprint density. In addition, the 146 GB Cheetah drive delivers performance improvements with data transfer rates that are 25% faster than previous generation 10,000 RPM drives and average seek times that are 8% faster.

"Particularly in this economy, customers are demanding maximum return on investment," said Steve Gardner, manager, product marketing, LSI Logic Storage Systems. "By integrating this new drive into our small-footprint intelligent drive modules, we are enabling businesses to get more performance and capacity in less floor space, thereby giving them more for their storage dollar."

"LSI Logic Storage Systems' integration of Seagate's 10K.6 Cheetah drive is just one part of the story of how our companies work together to bring cost effective solutions to customers," said Brian Dexheimer, Seagate executive vice president, sales, marketing and customer service. "We use chip technology from LSI Logic Corporation in our disk drives, which are then integrated into their storage arrays. The end result of this relationship is a solution that gives customers high performance and capacity at a reasonable price." ...LSI Logic Storage Systems profile, ...Seagate profile


Redmond, Washington – January 7, 2003 - ADIC announced today a new compact LTO autoloader that provides a week or more of unattended backup for a risk-free, affordable alternative to standalone tape drives. The new product, the FastStor® 2, offers a high-performance LTO Ultrium Generation 1 tape drive and 8 data cartridges in a rack-optimized chassis that's only 2U high. The FastStor 2 provides 108 GB of data transfer per hour and 1.6 TB of capacity (assuming average 2:1 data compression). Its high reliability design features a 100,000-hour MTBF (over 10 years), and is rated for 250,000 cartridge changes. The FastStor 2 has a manufacturer's suggested list price of $6,950 and it will be available from ADIC channel partners in January. ...ADIC profile


MILPITAS, Calif. - January 6, 2003 - Adaptec, Inc. has been selected to provide its leading Ultra320 SCSI chip for NEC Corporation's new line of servers designed to deliver optimum performance for mainline storage, e-commerce and other data-intensive applications.

"System performance and reliability are vital for our server customers as they work to manage and store growing amounts of information and support round-the-clock customer communications," said Tetsuya Fujita, chief manager of NEC Solutions' Client and Server Division. "Adaptec's proven Ultra320 SCSI solutions will allow us to deliver the highest levels of performance in our next-generation servers, enabling our customers to maximize application performance and return on investment."

Adaptec's Ultra320 controllers powered by the chip deliver data transfer rates of 273 megabytes per second over one channel and 546 megabytes per second over two channels, as much as 60 percent faster than the nearest competitor in backup and replication, server and workstation applications. Adaptec's Ultra320 products have attained peak I/O performance of 105,000 I/O operations per second, also the industry's fastest.

NEC, one of the world's largest computer companies and Japan's top server provider, selected Adaptec's Ultra320 SCSI chip for its Express 5800 120Mf, 140Rc-4 and 140Hd servers. ...Adaptec profile


MILPITAS, Calif. - January 6, 2003 - Maxtor Corporation today announced that Mike Cannon, president and chief executive officer, has resigned to joinSolectron Corporation, a $12 billion provider of electronic manufacturing and supply chain management services, as its president and chief executive officer, effective immediately. Paul Tufano, 49, chief operating officer and chief financial officer, has been named acting president and chief executive officer. Mr. Cannon, 50, will continue to serve on Maxtor's Board of Directors. The company reiterates all of its recently updated financial guidance for the fourth quarter ended December 28, 2002, including pro forma net income of between $25 and $35 million, or 10 to 14 cents per share.

"In his six and a half years at Maxtor, Mike has made significant contributions to the company, including the completion of the integration of Quantum Corporation,s hard disk drive business," said Dr. C.S. Park, Chairman of the Board. "He has positioned the company well to achieve its goal of sustained profitability and is leaving Maxtor in capable and experienced hands. We are very pleased Mike will remain on our Board and wish him well in his new endeavor." ...Maxtor profile

Editor's comments:- There's not much of a storage connection here (I think). Solectron owns a whole bunch of diverse companies including Force Computers, the world's leading manufacturer of compactPCI SBCs, who in turn own Dy 4 Systems which makes military systems and fibre channel cards.



Hopkinton, Mass - January 6, 2003 - EMC Corporation (NYSE:EMC) today announced stronger than expected preliminary results for the fourth quarter of 2002, which ended December 31, 2002. EMC expects to report total revenue of more than $1.47 billion, and earnings in the range of $0.01 to $0.02 per diluted share, excluding a previously announced restructuring charge. The charge is expected to be approximately $160 million on a pre-tax basis, primarily associated with the previously announced workforce reduction and consolidation of facilities. Including the charge, the net loss for the fourth quarter is expected to be in the range of $0.02 to $0.04 per share. These preliminary revenue results compare with revenue of $1.26 billion in the third quarter of 2002.

Joe Tucci, EMC President and CEO, said, "We are encouraged by the strength of these results. Overall, customer spending was better than we anticipated in the fourth quarter. In addition, demand was particularly strong for our newly introduced CX family of CLARiiON storage platforms." ...EMC profile

Editor's comments:- here's a revenue comparison for the same period in previous years.
  • Q402 - $1.47 billion
  • Q401 - $1.51 billion
  • Q400 - $2.5 billion


SAN JOSE - January 6, 2003 - Hitachi Global Storage Technologies today introduced a new 1.8-inch hard disk drive, ideally suited for a variety of mobile applications that require high performance, high capacity and energy efficiency in a small form factor. The new Hitachi Travelstar Compact Series C4K40, available in 40 and 20 gigabyte capacities, is built in a newly introduced 1.8-inch form factor. The new drive is compliant with the SFF8111 standard, making it a perfect match for laptop computers, tablet PCs, handheld computers, portable consumer electronics and other pervasive computing devices supporting this standard form factor. The new drive will be available in April of this year.

With a rotational speed of 4,200 rpm, areal density of 67 billion bits per square inch, and low power consumption in both idle and read operations, the new 1.8-inch drive presents a powerful combination of performance, capacity and energy efficiency in a compact size. In addition, the new drive has connector compatibility with the current 2.5-inch form factor, making it easy for product developers and manufacturers to transfer from 2.5-inch designs to the new 1.8-inch design inside laptop PCs. ...Hitachi profile


SCOTTS VALLEY, Calif. - January 6, 2003 - Seagate said today that MPC Computers is shipping one of the world's first PCs to feature Serial ATA hard drive technology. MPC's Millennia 910i desktop employs the industry's first PC hard drive with a native Serial ATA architecture: the Seagate Barracuda ATA V, featuring 7,200-rpm spin speed and large 8MB onboard cache. Offering up to 120 Gbytes of Seagate Serial ATA storage, the Millenia 910i can be configured with up to two Seagate hard drives for Serial ATA RAID 1, 0, which provides customers with either increased performance and storage capacity, or redundant protection of the user's data.

"Seagate has been dedicated to developing Serial ATA technology that we could integrate into our Millennia product line," said Paul Peterson, vice president of product marketing and product development at MPC Computers. "Millennia desktops provide customers with cutting-edge performance and speed, and Serial ATA is a key component in delivering the innovative, new technology that allows for increased processor speed, superior data integrity and system reliability. At MPC Computers, we're excited to bring the Serial ATA advantage to our government and mid-market business customers." ...MPC Computers, ...Seagate profile


Taipei, Taiwan - January 6, 2003 - IEI today announced the signing of distribution deals with two UK based channels:- Evesham Technology and Quadrant Storage Technologies. IEI's extensive range of NAS products are now available to UK users from both these companies with immediate effect. IEI has been funneling a lot of attention on gaining new European channels, and these latest partners in the UK brings to 17 the number of new distribution channels gained within the last 12 months. With a broad array of NAS products, from Enterprise level to SMB, SoHo and personal levels, and even with a solution based solely on Flash Disk technology for industrial applications, IEI offers reliable and cost-effective storage solutions that are both scalable and flexible to the requirements of multiple storage environments.

"Storage is gaining more and more emphasis within the global IT market," said Simon Hsieh, IEI's Chief Strategic Officer, "and so for us to have gained two new channels in the UK shows the confidence our new partners have in our products in Europe. Before we launched our products in Europe, we decided on a strategy that would ensure that our channel partners got the best possible deal from us and we wanted to be different to other manufacturers. We feel that what we have achieved really allows our partners to profit, even in these turbulent times" ...Evesham Technology profile, ...IEI profile, ...Quadrant Storage Solutions profile


MINNEAPOLIS, MN - January 6, 2003 - CNT announced today that the UltraNet Edge Storage Router has been verified by Brocade as interoperable with all of the Brocade 2 gigabit family of Fibre Channel switches-including the SilkWorm 3200, SilkWorm 3800, SilkWorm 3900, and SilkWorm 12000-through the Brocade Fabric Aware Program. This verification of interoperability exemplifies Brocade and CNT's commitment to enabling their mutual customers to more easily deploy a SAN infrastructure for business continuity and disaster recovery by assuring that heterogeneous products will work together. The Brocade Fabric Aware Program, an end-to-end interoperability initiative for storage entry to enterprise networks, is a comprehensive testing and configuration initiative designed to foster enterprise-wide SAN interoperability in multi-vendor Brocade-based SAN environments. The Fabric Aware Program has added more than forty members since its launch in 2000. Testing was conducted at the Brocade interoperability labs, which are state-of-the-art facilities supporting end-to-end interoperability and performance testing of SAN products in multi-vendor and large fabric SAN environments. ...Brocade profile, ...CNT profile


Shingle Springs, CA -January 3, 2003 - Mediatechnics Systems, Inc. has launched the new PACT240IJ system with inkjet capability built in line. Adding this affordable CD/DVD copier system to the current line of systems allows customers who are looking for duplication ability to purchase the unit without a large investment. This system is loaded with features such as 220 disc capacity, 20GB hard drive, In-line Inkjet Printer, Fast loading Impact robotics, Easy firmware updates, Instant boot up and much more!

According to Rick Wilson, President at Mediatechnics, "A good working relationship with our vendors and customers allows us to respond to their needs and offer them incredible duplication power at a cost reduced price". ...Mediatechnics Systems profile


POOLE, UK - January 2, 2003 - BakBone Software announced today that UK Internet Service Provider, Server City, has installed NetVault to ensure reliable backup and recovery of data at their site in London, UK. Providing virtual web hosting services to thousands of clients throughout the UK, Server City has invested heavily in data backup in order to minimise downtime for their clients' web services running across Windows 2000 and Sun Cobalt RaQ4 server appliances.

David Graham, Customer Services Director at Server City cites the ease of implementation as the key advantage of NetVault. "It was all very painless and quick. It is a flexible software solution, reliable and it has enabled our organisation to meet the ever-growing need to provide a secure backup service not only to ourselves – but more importantly to our clients. We are now able to back up core DNS servers and websites that run on Linux and Windows, which are then rented to our clients."

"The installation at Server City demonstrates our continued promise to support an extensive range of operating systems and appliances, including Linux and Sun Cobalt servers, whilst maintaining our key ease-of-use advantage," comments Andrew Unsworth, Managing Director EMEA, BakBone Software. "More and more customers are discovering the true power of NetVault as a heterogeneous enterprise backup software solution which does not compromise simplicity for functionality." ...BakBone Software profile


CLEARWATER, FL - January 2, 2003 - Tech Data Corporation today announced it will carry a new bundled SAN solution for its U.S. reseller customers serving the SMB market. The bundled SAN works in a distributed Intel-based environment in the Windows NT/2000 space, and is pre-tested, pre-configured, CA Smart Certified, and Brocade SOLUTIONware certified. The solution is comprised of the following components:
  • Brocade: SilkWorm 3200 - 8-port Fibre Channel fabric switch that delivers the availability, manageability, scalability and security required for networked storage environments.
  • Computer Associates: BrightStor ARCserve Backup v9 - BrightStor SAN Manager provides discovery, zoning, LUN (Logical UNit) assignments and enhanced visualization to simplify SAN management. In addition, adoption of industry standards and existing management interfaces enable complete end-to-end management control of SAN environments, bridging SANs, fabrics, arrays and TCP/IP networks.
  • Emulex: LP9002L HBA - Features automatic speed negotiation capability, which allows complete compatibility with existing 1Gb/s Fiber Channel SANs, while allowing seamless upgrades to higher speed 2Gb/s SANs. The LP9002L provides the flexibility and broad interoperability needed for complex highly scalable SANs.
Tech Data will complement the bundled SAN solution with a host of reseller support services that include logistics management, technical assistance, systems engineers, business development, vendor product specialists, education and training, credit/financing options, marketing and configuration support.

According to research firm AMI Partners, worldwide spending among SMBs on storage hardware, software and services will increase from $4.6 billion to $19.5 billion between 2002 and 2006. A pre-packaged, entry-level SAN solution, the new offering provides an attractive opportunity for resellers looking to achieve customer satisfaction and higher revenues for business growth. ...Tech Data profile


AUSTIN, Texas - January 2, 2003 - Crossroads Systems, Inc. (NASDAQ: CRDS) today received a notification from Nasdaq stating that Crossroads had evidenced compliance with the minimum bid price requirement, set forth under Marketplace Rule 4450(a)(5), and all other requirements necessary for continued listing on the Nasdaq National Market. The Company will continue trading on the Nasdaq National Market, and its hearing before the Nasdaq Listing Qualifications Panel which was scheduled for January 16, 2003 has been cancelled. ...Crossroads Systems profile


ALISO VIEJO, Calif. - January 2, 2003 - QLogic Corp. today announced that H.K. Desai, chairman, CEO and president, and Frank Calderoni, senior vice president and CFO, will be presenting at conferences in Scottsdale, Arizona and New York City the week of January 6, 2003.

Desai and Calderoni will present at the Morgan Stanley Software, Services, Internet and Networking Conference held at the Phoenician Resort in Scottsdale on Monday, January 6. On Wednesday, January 8, Desai will speak at the Fifth Annual Needham and Company Growth Conference held at the New York Palace Hotel, and on Thursday, January 9 he will address investors at the RBC Capital Markets Systems Area Network Conference at The Plaza in New York City. The presentation for these conferences will be available through live and archived webcasts through the QLogic website. ...QLogic profile
Other news on this page

IBM and Cisco Team to Deliver New Storage Networking Solutions

Sanbolic and LSI Logic announce Fibre Channel product certifications

BiTMICRO to Introduce Low-Cost 2.5-inch ATA/IDE FlashDrive Solid State Disk Storage Device at AFCEA West 2003

HP Introduces Its Fastest DVD Writers Ever

Dot Hill Estimates Revenue Grew 75% Sequentially in Q4

Solid State Disk Sales head North from Texas

StorageTek Announces Higher-than-Anticipated Q4 Results

NETGEAR To License FalconStor's Load Balancing and Fail Over Software

Exabyte Announces Availability of VXA-2 with FireWire for MAC Users

Seagate's New 146 GB Disk Drive Helps LSI Logic Storage Systems Work Faster

ADIC Launches FastStor 2 LTO Autoloader

NEC Selects Adaptec's Industry-Leading Ultra320 SCSI for New Servers

Maxtor's President and CEO Moves to Solectron

EMC Announces Preliminary Fourth Quarter Results

Hitachi Introduces 1.8-inch Mobile Hard Disk Drive

MPC Computers Ships Serial ATA PC to Customers

NAS from IEI now available in the UK

CNT and Brocade Expand Interoperability for End-to-End Storage Networking Products

Mediatechnics Announces New 2 Drive Professional Series CD/DVD Duplication System

NetVault Serves as Best Backup for UK I.S.P.

Tech Data U.S. Provides Bundled SAN Solution for Technology Resellers

Nasdaq Delisting for Crossroads Systems Cancelled

QLogic Executives to Present at Upcoming Conferences

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Nibble: Is the External Disk Market Heading for a Crash?

T
wo recent market research reports got me questioning the validity of my own assumptions about the long term prospects for the that part of the storage industry which supplies disk based storage such as RAID, NAS, SAN etc. And I'm starting to feel a cold chill which has nothing to do with the seasonal weather.

First it was the December 6 news from IDC saying that worldwide disk storage systems factory revenue in the third quarter of 2002 was down 3% compared with the second quarter. "The failure to gain revenue momentum in Q3 is yet another indication that a rebound in the disk storage systems market is not imminent," said Charlotte Rancourt, research director of IDC's Disk Storage Systems program. "The third quarter is consistent with an emerging trend whereby growth in gigabyte per unit does not offset the unrelenting decline in dollar per gigabyte."

Then there was the December 10 report from Peripheral Research Corp saying that the demand for critical components for rigid disk drives hit a five-year low in 2002. "The industry has been on a 60-100% per year increase in areal densities, which by nature reduces the number of Magnetic Heads and Disks in each drive... The demand for Rigid Disk Drives has flattened out to about 195 million units per year for the past three years." This report went onto say that growth in demand for disk drives in consumer products would eventually lead to growth in overall disk shipments, but that doesn't affect the computer market which we're discussing here.

Let's recap on the two main reasons that so many computer companies flocked into the storage market in 2000 and 2001 during the recession in the PC and server market.

The first, was a widely held belief supported by direct experience, and codified in a widely publicised EMC sponsored research study saying that the demand for storage capacity would double every year. The second factor was the growth and profitability of EMC back in 2000. Both factors, taken together suggested to many oems, that here was a market which was ripe and growing, and in which there plenty of opportunity for efficient low cost producers to make higher profits than in the PC market by undercutting the fat dumb and happy market leaders. News travels fast in this wired world. So hundreds of companies had exactly the same idea.

But what if these assumptions are wrong? Or don't give the whole picture? What if an annual doubling in demand for disk storage doesn't actually lead to any increase in storage revenue? And what if an overcrowded market of EMC wannabes leads to the same fierce competition and pricing models seen in the PC market? That's good for users but spells ruin for many storage oems.

In the semiconductor world Moore's Law has reliably predicted the shrinking geometry of chip and the growing density of memory for 3 decades. There isn't an equivalent in the disk storage world. But looking back at the last 10 years, disk drive capacity has increased by a factor of 1,000, which means that on average it's doubled every year. So even if demand for storage is doubling, there's no compelling reason for the market to increase in value. In fact, if you take into account the new wave of intelligent archiving software from companies like Princeton Softech there are optimistic grounds for believing that users will be able to keep a lid on runaway storage growth by using more compression and faster intelligent archiving based on data usage patterns.

If disk storage technology keeps improving, users could end up paying less for their storage networks in the long term, instead of more. Now there's an interesting thing to think about as we ponder what the new year may bring.

See also:- ...EMC profile, ...IDC profile, Market research, ...Peripheral Research profile
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