Driving Storage

Leading hard drive manufacturers have consolidated their position and are now looking to new markets and technologies.

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By  Paul Barthram Published  November 2, 2003

I - Introduction|~||~||~|Leading hard drive manufacturers have consolidated their position and are now looking to new markets and technologies

After Fujitsu's retreat from the desktop drive market last year, the hard drive industry would, at first look, seem to have been fairly quiet of late. Prices have stabilised, capacity has increased steadily, and with the exception of a small yet steady growth in shipment of serial ATA drives, there have been no great moves in the market. But as demand for storage continues to ramp up, the three leading hard drive manufacturers have not simply sat back to carve up the market between them. New markets are beginning to emerge, which the manufacturers are positioning themselves to address.

At the desktop level, the technology inside the drive has reached a point where capacity has outstripped the needs of most users. The areal density-the number of bits that can be recorded on a square inch of a disc's surface-has steadily increased over the past couple of years, with no particular bottlenecks in the technology. At the same time consolidation in the industry has created a less turbulent market. Hafeez Khawaja, regional director of emerging markets for Western Digital believes that this is not a bad thing.

"We have achieved on areal density a point where 80GB per platter is enough today. Three platters give you a 250GB drive-you don't need that much [storage]. The areal density curve has stabilised, there will be a new generation of areal density but it won't be every six months, it will be every two years, which makes the market very stable, creates trust with the customers, and pricing stability for the channel. I think the channel needs that, it has been missing," said Khawaja.

With no major changes inside the drive, the focus this year has mainly been on the interface. At the enterprise level, vendors have introduced drives that utilise the serial ATA interface rather than parallel ATA, which has proven to be a success, with more changes in interface predicted in the coming year. "This year we shipped about 5-6% of drives with serial ATA," commented Didier Trassaert, vice president of Maxtor EMEA. "We believe that next year, with the push from Intel, the market will move from parallel to serial ATA. We will also continue to increase our capacity for SCSI drives, and you will have the same type of revolution next year with the interface, as we move from SCSI to serial attached SCSI later in 2004."
||**||II - Next generation|~||~||~|
But while the technology of hard drives is moving forward, there are also applications of the existing hardware that are causing some excitement. Maxtor recently launched the third generation of its OneTouch external hard drives, in capacities up to 300GB. The drives have been designed to allow simple backup and storage for a wide range of users, primarily as a retail product for home or SOHO users, although commercial usage is also increasing, which Maxtor is looking to address, Trassaert said. "We have many applications for this [product]-storage for digital pictures, backup, expansion of notebook memory or people wanting to carry their information from one place to another. In many SMBs or divisions of larger companies, staff want their own backup, many companies don't have backup, or it is not flexible, and people want to be sure their data is safe. This business is already booming, above our expectations, so Maxtor will continue to invest in this consumer field, with several new devices, not just OneTouch."

Both Seagate and Western Digital also have external drives, and are now considering bringing them to the Middle East. While retail is not a major part of Maxtor's business, the market is still significant to the vendor.

"This year, Maxtor has shipped over one million drives per week," Trassaert said. "Retail represents a few percent of the total, but a few percent of one million represents a big quantity, and retail sales are increasing very fast. It represents a big incremental business for us, and is also a great contribution to brand awareness."

Another area where demand for disk drives is increasing is from notebooks. Western Digital will be launching notebook drives next year, while Seagate reports that has been successful with its Momentus range of notebook drives. The Momentus series of 2.5" hard drives, operate at 5400rpm, but while notebook demand is growing, Alastair Stewart, director for Northern & Eastern channel sales for Seagate said that this is not where the biggest interest is coming from. "We have had a lot of success with the Momentus product, with people looking to fit it into blade servers, because it is 40% faster than the majority of notebook drives out there," Stewart said.

"It is inevitable as time progresses, that people will want smaller and smaller desktops and servers. We feel that on the enterprise side particularly, the savings in reducing the physical size of your storage devices is actually quite considerable, and will probably drive that market to 2.5" drives before the desktop does. For a data centre you can save 70% floor space for the same data capacity," he added.

Increasing demand for blade servers and small form factor PCs creates a new area of demand, as the operating requirements are different to notebooks, Stewart explained. Notebook drives need to be rugged and to have low power consumption, so that they can withstand knocks and get the most out of batteries while mobile. When the same drive goes into a product that isn't mobile, the criteria change.
||**||III - Notebooks V Desktops|~||~||~|
"If you think why notebook drives cost more than desktop drives now, the footprint is kind of irrelevant-if the market demands smaller footprint desktop drives, the only thing they have in common with notebook drives is they both store data-the desktop has completely different criteria, it needs performance, reliability and cost. It will be the same [desktop] product as now, but taking up less space," he said.

To address the segment, Seagate plans to launch a small form factor drive in the first half of next year. But it is not just PC applications that are driving the demand for smaller drives. All of the vendors are looking to the next big thing-consumer electronics. Seagate and Western Digital both supply hard drives for Microsoft's Xbox games console; while Maxtor's drive for brand awareness is also intended to help position itself to take advantage of a predicted boom in demand for drives in devices such as set top boxes, digital video recorders, and even automobiles. To cater for consumer electronics the manufacturers are looking at smaller, cheaper, and quieter drives that they believe will become as ubiquitous as microchips.

"The forecast is by 2006 there will be a market of 40 million units in consumer electronics, and we think we should have roughly one third of that market, as there only three big players left in this industry," Khawaja said. "We are one of the largest suppliers for Microsoft Xbox. We are working with other consumer electronics suppliers like Sony, Panasonic, TiVo for digital video recorders, and cable TV companies for set top boxes. We were always known as a computer industry supplier, today we are storage suppliers-it doesn't matter where that storage is used."

To prepare for the ramp up of demand from consumer devices, the manufacturers are investing heavily in production capacity and technology. Western Digital recently acquired head manufacturer Read-Rite to give it vertical technology integration. Seagate already produces its own heads and media, and said Stewart, the company's investment in technology will allow it to meet the technological product criteria for consumer electronics, along with the increased volume demand.

"The investment in technology is relentless, and that, and the invest in support and service will be what wins. We develop the technology, and we are able, as and when the market demands it, to bring new technologies to market," Stewart said.

"When the market needs the next step we have always had the technology to do it. Fluid dynamic bearings-we were the first to do those, because the market wanted silent drives. We have to make sure we are listening to our customers and developing the products they want, because we are not even at the tip of the iceberg of the storage explosion yet. The omnipresence of hard disk drives is still in its infancy, we are already addressing the technology needed to put hard drives into a car or TV or whatever it will be, and I don't think the time is far off when consumer electronics is as big as PC applications for hard drives."||**||

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