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perspective...

comparing the SSD market today

to earlier tech disruptions



by Zsolt Kerekes, editor - January 3, 2012
It probably won't surprise you to learn that the subject of SSDs came up a lot with the friends and relatives I talked to during the recent Christmas holiday.

How do I explain the significance of the SSD market to people with diverse backgrounds in a couple of sentences?

That's quite a challenge.

The easiest people to discuss the SSD market with are those with a background in electronics - particularly if they have worked in semiconductor companies.

There are also many common frames of reference when I talk to people who have worked in the computer market.

Despite that, however, the semiconductor related issues (such as risks of potential bottlenecks in product roadmaps and reliability subtleties and cost factors associated with different types of flash memory) are concepts which are beyond the comprehension of most computer people - even if they understand how processors work. CPU designers have stuck to the safe side of the chip technology rules street in recent decades - whereas SSD designers have been crashing around and beyond the safety barriers of accepted memory process design rules.

Even those who are very computer literate just have to accept that there are important strands in chip technology which they can't understand from first principles - and they therefore have to rely on indirect clues and hope that the reference sources they trust are correct when it comes to making supplier choices.

Since the flurry of acquisition and IPO fever in the SSD market in 2011 - it's become much easier discussing the significance of the SSD market with people whose backgrounds are financial - like accountants and business managers with MBAs. That's because money talks. And the SSD financials tell a clear story. Here is a market which was till recently too small to bother learning about. But it now such good prospects for revenue growth (100% / year in some segments) and potential towering revenue ceilings. These factors mean that a handful of leading SSD companies were valued in 2011 at a total amount worth more than the combined revenue of the entire market of several hundred SSD companies. SSDs could be a new tech growth bubble.

The toughest people for me to explain the context of the SSD market to - are those who have no technology background at all - even if they have achieved senior positions in people related markets - like law and psychology.

In those circumstances I know that not a word I say about architecture, chip technology or market size is going to be understood. But I can still find reference points from everyday life. And my argument goes something like this.

Since the early 1970s there have been 3 revolutionary disruptive influences in the electronics and computing markets.
  • the microprocessor
  • the commercialization of the internet
I can relate where I think we are in the SSD market at the start of 2012 to distinct phases in those earlier revolutionary markets.

Comparison with the microprocessor market.

The first microprocessors started shipping in the early 1970s. By 1980 - it was clear that the micro was going to affect a lot more than just the computer peripherals market. By that time micros were being designed for wide deployment in factory automation and process control systems and the new digital technologies enabled improvements in the levels of efficiency and repeatable quality in the manufacture of everything from foodstuffs and chemicals to cars - which had previously been impossible. All this was still before the introduction of the Wintel PC - which as a standard reference platform later enabled the creation of entirely new markets.

I would say that the SSD market today (despite its long history) is similar to the state of the microprocessor market in 1980. Some of the SSD types and applications for SSDs are already in use - but we still haven't got to the equivalent of the 16/32 bit micro market - because there are many architectural improvements and reference platforms still to be developed.

Comparison with the internet market.

The internet moved into a new higher orbit with the introduction of commercial web sites in 1995. Before then the primary use of the internet had been email - but as we now know - the web eventually made it easier to find out information about almost anything and then buy it in almost seamless real-time transactions.

I would equate the state of the SSD market today with the state of the web in about 1998 - when you could already see a lot of the promise and the direction that the web was going towards (the hype was so great we had the dotcom bubble) but this was still before Google became operational and long before the economics of digital rights management - and iTunes and the Kindle.

In the SSD market today we can extrapolate from current business uses of SSDs and speculate about future SSD enabled markets. But we still haven't got the pure play SSD enabled information economies in play yet. Most of what we've got today with Facebook, YouTube and online games is SSD accelerated versions of businesses that already existed before.

How long before we get to the Kindle age in the SSD market?

I expect we'll see entirely new SSD enabled markets in the next few years - but it could be 2015 or later before it starts to be clear who the SSD equivalents of the Wintel platform (leveraging the microprocessor) or Amazon and Apple (leveraging the web) will be.

If you're the CEO in a new startup and you think that your SSD enabled services will change the world - send me an email when you're ready for our readers to know more.
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With the benefit of hindsight it can now be clearly seen that 2003 - which saw the shipments of the first terabyte SSD systems - also marked the beginning of the Modern Era in the SSD market.

After 2003 the only technology which could displace an SSD from its market role was another SSD (or another SSD-centric technology).
SSD market history
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SSD Jargon

Do you understand all the ingredients in the SSD news headlines?

This might help.
... SSD Jargon

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"Financial data is backwards looking, is too late to provide visibility in fast growing discontinuous markets, and is not available for significant companies in the market which are privately owned."
the Top SSD Companies

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image shows mouse at the one armed bandit - click to see VC funds in storage
VCs in SSDs

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"SSD revenue will exceed $10 billion / year sometime in the next several years.

Thats old news.

I published that market potential size prediction back in 2003.

But it won't stop there.

I now have good reasons for thinking that SSDs have the potential to eventually become a $100 billion / year market by the close of this decade.
Zsolt Kerekes, editor - StorageSearch.com - quoted in the email - Registration Opens for Flash Memory Summit (June 2013).

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"The user mood is changing from - can I afford to use SSDs? to a realization that - I can't afford not to use SSDs."
where does all the money go?

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"This is a lot like the x86 processor. Suddenly you have this cheap, commodity processor and you can build computers and eventually servers out of this architecture."
...Rick White, FIO - in the DCIG article - Server-based Flash Poised to Change the Data Center - February 10, 2012

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10+ years of "MRAM will soon replace flash" etc
The emerging size of the flash SSD market as you see it today was by no means inevitable.

It owes a lot to 3 competing storage media competitors which failed to evolve fast enough in the Darwinian jungle of the storage market.
SSD past phantom demons image - click to read the article The article - SSD's past phantom demons explores the latent market threats which hovered around the flash SSD market in the past 10 years. They seemed real and solid enough at the time.