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Hardware

IBM Bails Out of the Hard Drive Market 351

Posted by timothy from the spinning-down dept.
DJ STORM writes: "IBM has decided to exit the hard drive market citing the market has become too competitive.They plan to sell 70% of the their HD business to Hitachi. The new company name is unknown. One has to wonder if this has anything to do with IBM's troubled Deskstar GXP series." IBM will still have part ownership of the resulting venture, but it sounds like no more Deskstars. Update: 04/17 16:33 GMT by T : You may also find interesting some older posts about IBM's work on increasing hard drive storage (1, 2, 3); hopefully, the new company will continue that R&D effort.
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IBM Bails Out of the Hard Drive Market More

IBM Bails Out of the Hard Drive Market

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  • "Leaving" the market (Score:5, Insightful)

    by Darth_brooks ( 180756 ) <clipper377@g[ ]l.com ['mai' in gap]> on Wednesday April 17, 2002 @11:00AM (#3358930) Homepage
    will this be anything like the numerous times IBM has decided to get out of the desktop PC market?

    • Re:"Leaving" the market (Score:3, Insightful)

      by JJ ( 29711 )
      Unlikely. IBM made bad decisions in the PC market and yet kept thinking they could compete. And yet, because of their strengths, they thought they could make fabulous amounts of money there which they did for awhile. Data storage does not have the same appeal to IBM's marketing department and so is unlikely to lure the company back. Besides, they teamed up with a major player in the market and Hitachi probably has a restrictive agreement with them.

    • Re:"Leaving" the market (Score:3, Informative)

      by nolife ( 233813 )
      IBM and Toshiba had a joint interest in a large chip fab for DRAM until last year when they pulled out of that. Looks like they are still trying to rid themselves of potentially unprofitable businesses and "lean" up. Normally when businesses are doing this they are trying to stay alive...
      • I expect that IBM is not having troubles staying alive. I expect it is because IBM is fairly conservative, and attempting to get rid of problems before they do any serious damage.

        -Paul Komarek

  • Notebood Hard drives (Score:3, Interesting)

    by robkill ( 259732 ) on Wednesday April 17, 2002 @11:00AM (#3358934)
    I'd be interesed in seeing the effect this has on the price of notebook hard drives, since IBM's Travelstar series has a large share of the market.
    • If the demand remains constant, *someone* -- either Hitachi, if they buy that product from IBM, or someone else -- will supply.

      At first, there may be spike in the prices, but market forces will adjust that. The hard drive market, as the story said, is very competitive. And where there is competition (unlike the desktop OS market), market forces generally work well.
      • notebook hard drives, since IBM's Travelstar series has a large share of the market

      Which isn't necessarily a good thing. I do a bit of casual notebook trading and repair on the side, but I gave up on Travelstars recently. A lot of the older DADA < 10Gb drives were (or became) very noisy, and they failed uncomfortably frequently. The big problem though was that if you buy enough used Travelstars from eBay, then (quite apart from the stupid near new prices they can attract) you'll find an alarming number of them turn out to be failed drives that have clearly been slipped out the back door of a repair shop - including locked drives that are the devil's own work to unlock [slashdot.org]. That sort of thing goes on all the time (it's a perk of the job) but the scale I saw it happening on rather indicated that it had become endemic among IBM approved shops. Eventually I just gave up on the damn things altogther, and it's soured me on the brand. The nasty reports on the desktop drives - and worse, IBM's "not our problem" attitude - just put the nail in the coffin. Now you'd have to cut me a pretty good deal to persuade me to buy an IBM brand drive of any sort.

  • Bugger (Score:3, Insightful)

    by Izeickl ( 529058 ) on Wednesday April 17, 2002 @11:00AM (#3358935) Homepage
    Ive actually had zero problems with all my IBM drives, got about 500 gigs worth kicking about and not had a problem in 4 years. Always found their price to size ratio pretty nice. Oh well change as good as a rest.

    • Re:Bugger (Score:2, Insightful)

      by AntiNorm ( 155641 )
      Ive actually had zero problems with all my IBM drives

      I've had zero success with my IBM hard drives. Put simply, IBM hard drives are junk. Even worse is their customer service -- when you try and RMA a hard drive, they send you "refurbished" hard drives, which is just a nice way of saying that they are hard drives that others have already RMAd! And if you want to try and get a refund out of them, just about the only way is to take them to small claims court.

      IBM deserves to have to get out of the hard drive business, IMO.
      • Ive actually had zero problems with all my IBM drives

        I've had zero success with my IBM hard drives. Put simply, IBM hard drives are junk.

        I'm more inclined to agree with the original poster. Out of five drives (a 75GXP and two 120GXPs at home, and two 60GXPs at work), all are running with no problems. The two work machines are fired up 24/7, too.

        Even worse is their customer service -- when you try and RMA a hard drive, they send you "refurbished" hard drives, which is just a nice way of saying that they are hard drives that others have already RMAd!

        ...and how is this different from what every other hard-drive manufacturer does? If you ship a dead drive to Seagate or Western Digital or Maxtor or whoever, you're going to more than likely get a refurb back (and I have a refurbed Maxtor on the shelf at work to prove it). After all, you're not sending them a new drive for replacement...why would they replace a used drive with a new drive?

    • I agree, this sucks. About 2 years ago, I switched from Western Digital to IBM as my favorite HD manufacturer. Hopefully someone will continue the Deskstars.

  • deskstar? I doubt it (Score:5, Insightful)

    by parc ( 25467 ) on Wednesday April 17, 2002 @11:00AM (#3358936)
    I very seriously doubt the deskstar caused IBM to give up. It was one version of a single product in a long line of products they produced.

    Think about it. Prices are $1.4/GB, and people still complain about the price. At what point do you say "we're making...$.50 per drive we sell. Let's give up." ?

    • I very seriously doubt the deskstar caused IBM to give up... At what point do you say "we're making...$.50 per drive we sell. Let's give up." ?

      If, as you say, they were only making $0.50 per drive, that's an awful narrow profit margin. It doesn't take too many returns to wipe that slim profit out completely.

      I think the DeathStar debacle had a *lot* to do with this development.


    • Re:deskstar? I doubt it (Score:5, Funny)

      by perky ( 106880 ) on Wednesday April 17, 2002 @01:20PM (#3359861)
      At what point do you say "we're making...$.50 per drive we sell. Let's give up." ?

      The point at which you are making 50 cents per drive? ;-)

  • Until all this recent shenanigans with the Deathstars, I thought IBM made "some of the best drives" now, I've sold my GXP, and bought Western Digitals..... 120 gig, 7,200 RPM, and 8 megs of cache, I love my new "media" drive.

  • They were the real competitors (Score:5, Insightful)

    by Brento ( 26177 ) <brento@brentozar ... minus herbivore> on Wednesday April 17, 2002 @11:01AM (#3358941) Homepage
    IBM has decided to exit the hard drive market citing the market has become too competitive.

    Too competitive? They were the ones introducing all the cool features. They were the first ones out with quiet IDE drives, the first ones with adjustable noise levels, the first with the "pixie dust" stuff with awesome platter density, the first big (60+ gig) laptop drives. I can't think of another hard drive company that was nearly as competitive as IBM was, and for them to say the market is too competitive, that really tells you something.

    • Re:They were the real competitors (Score:4, Interesting)

      by garcia ( 6573 ) on Wednesday April 17, 2002 @11:03AM (#3358965)
      they might have come up w/the cool technology but they were selling it at rates that just could not compete w/the other vendors.

      It was like their PC lines. They were always $500 - $1000 more than anyone else. Who the hell would want to pay that?

      I have an IBM Microdrive and I love it. But I wouldn't want to pay extra money for a regular HD when I could get something comparable for a shitload less.
      • It was like their PC lines. They were always $500 - $1000 more than anyone else. Who the hell would want to pay that?

        I'm typing this from my Thinkpad, with a 32gb drive in it that spins so quietly I can't hear. They've got my vote, to say the least. But to be fair, I went to CDW's hard drive section to check prices. IBM's 60gb Deskstar 7200 rpm IDE is $136 - exactly the same price as Maxtor's about five lines down. Sounds competitive to me.

      • OK, I have been hearing "You're paying way more for the name" with reference to IBM. I've owned several IBM computers and would say unequivocally that you are paying more for quality. One example: I bought a low end Aptiva pentium 200mmx about 4 years ago that has had at various times Win95, Win98, NT 4, BSD, and linux. Aside from adding memory and additional hard drives I have never had a single problem with it. It is currently the internal server for my home network (DNS/IMAP/SMTP/MP3) running linux and in the last two years has only ever been turned off for moving. I have freinds who bought computers at the same time (Dells, Compaqs, Gateways, etc) that didn't undergo nearly as much abuse as my Aptiva, and they were all replaced about 3 years ago.

        You want quality, you pay for it. You want cheap, you get cheap. Which means lower grade parts, poor assembly, and generally lousy support. I wouldn't know about IBM support, however. In my years of using their laptops and desktops at several jobs I've never needed to use their support.
        • any computer I have ever used (Packard Bell 386SX even) has outlasted anyone else.

          I am still using a generic dual 400 celeon from 3 years ago w/o a single major upgrade, I had a 486SX25 that was from NCR (yeah, NCR) and that was running for over 2.5 years straight, only went off when the UPS died)

          I have a Dell LM-133 laptop that is still kicking it (ran straight for 3 years on my desk at school).

          I think it all depends on the particular computer and the particular user doing the upkeep.

          I guess I have been lucky. Anyone w/a Packard Bell that lastest as long as mine did (it was even running when I recv'd the class action suit papers like 5 years after we bought it).

          Crossing my fingers.
        • It's too bad you have been able to use IBM's support, because it's incredible. I consider EasyServ the *best* in the business. I had to get a ThinkPad serviced a couple years ago (it was 2.5 years old) and the day after I called for warranty service a FedEx guy was on my doorstep with a box to ship the laptop in. I put it in the box, he took it, got to IBM the next day, they serviced it in one day and then I had it back the next. 3-day turnaround time - the best you can get without entrusting it to a "local service center" (usually a CompUSA or something with techs of dubious expertise). And when they serviced it they even replaced the TrackPoint cap, threw in some extras, and added a little pad to the bottom that helped dissipate the heat. Unfortunately, after 4 years that ThinkPad has been retired, but when I bought my new one I bought it knowing that in the extremely rare case anything goes wrong, I'm covered.
      • "It was like their PC lines. They were always $500 - $1000 more than anyone else. Who the hell would want to pay that?"

        I think you ought to look back at what they've been charging for PCs in the past three years. Each year they've had sub $1000 machines on the market. Granted they've lost money on them, but they have been price competitive, and not, as you say, $500-$1000 above everyone else.
    • IBM has decided to exit the hard drive market citing the market has become too competitive.

      Interpretation: At current market prices, we can't research/design/produce/sell them and make a profit.

    • IBM wants (perhaps more importantly their analysts want it to) to focus their energies on things that they can get a high margin for. Services, big servers, and software. Hard drives are a commodity and not a very lucrative business. Hitatchi is a major player in storage which might explain their desire to own some IBM tech. Anyway, hard drives didn't make a lot of profit, so they trim down thier operation to focus on the big bucks. It's a smart move.

      • Re:They were the real competitors (Score:4, Insightful)

        by Ed Avis ( 5917 ) <ed@membled.com> on Wednesday April 17, 2002 @11:46AM (#3359254) Homepage
        This is also, perhaps, a sign that IBM isn't so interested in the PC / small system market. The big appeal of IBM in the past was that they produced almost all the parts for their systems in-house. So if there was a problem with a particular model of disk or monitor or RAM chip, IBM would know the full history, know who designed it, and have the expertise to support it. Or more importantly, IBM's knowledge of the parts they used helped them put together reliable systems to start with. (There was a time when every IBM upgrade (for the PS/2 line) was guaranteed to work with every other IBM upgrade.)

        But since the reorganization of the 1990s, IBM divisions have been encouraged to sell outside the company, even to direct competitors, and make money in their own right. In this context it makes a lot of sense to spin them off.
    • IBM made the wrong move. For years they have been leading innovation in the hard drive business, but lately have given up a lot of mind share on the reliability of their drives. They really screwed up with their inability to make good on their Deskstar problems. It's as if they pretended the problem didn't exist!

      The prudent approach would be to severely clean house at the top management level of the disk drive division. It's as if the thumbheads at the top don't know any better than to look further than the quarterly bottom line money figures. Sure, their disk-drive profits are probably tanking big time right now. But how can they be so stupid to not know the real reason why, or expect that the current situation must be permanent?

    • The market has become too competitive

      In other news, this evening, entropy has become too disorderly, the absolute value of Pi has become too unwieldy and Jon Katz' arguments have become a tad specious.

      (I'm not saying that the point isn't understood. Rather, I'm saying the words it's expressed in are meaningless.)

  • Price reduction? (Score:2, Interesting)

    by fabiolrs ( 536338 )
    "Hard-disk drives, similar to other components for computers, have experienced sharply reduced demand and corresponding reductions in pricing."

    Price reduction? This guy must be crazy... memory, for example, is costing many times more they were costing last december. Same goes for LCD monitors and HD...
  • A friend of mine bought one of their drives. It was the only one he had that spun up REAL fast, then died immediately. The replacement for it worked of for 2 months, then decided it wanted all the other devices' IRQ numbers...caused conflicts. The drive after that seemed ok...4 months down the line, smoke started pouring out of it. I say "BAH" and good riddance.

    Just my $.02

    JoeLinux
    • The drive cannot "decide it wants the other IRQ numbers". That is a problem in your BIOS or OS.

      I have purchased at least 40 IBM drives and been very happy with them.

    • Bad Power Supply (Score:5, Insightful)

      by crow ( 16139 ) on Wednesday April 17, 2002 @11:37AM (#3359201) Homepage Journal
      The situation you described sounds like a bad power supply. As others have mentioned, it's the controller, not the hard drive, that requests IRQs--that's something that is usually part of the motherboard chip set. So if the failure you described is accurate, you're seeing failures in multiple parts of the system, which is a strong indicator of a bad power supply. That could also explain why you had more than one drive fail in the system, though often with drives you do find reliability comes and goes in bunches.

    • Re:Good Riddance... (Score:5, Insightful)

      by CaptainPhong ( 83963 ) on Wednesday April 17, 2002 @11:42AM (#3359236) Homepage
      I don't really think it's fair to condem them for one bad line of drives... For those of you with short memories, prior to the Desktar GXP, IBM drives were frequently (most often actually) the first choice for quality. Somehow this fiasco gave all their drives a bad name. They certainly weren't the first manufacturer to have serious problems with a particular line or model of drive (in fact, probalby all of them have been hit at one point or another.)

      Years ago my 1.6 Gig Western Digital Caviar drive started to suddenly sprout bad sectors. I gave WD a call and was given an abusive and insulting runaround by the tech I got. I got so mad that I had to smash a few things to calm down before calling back to try to get someone else. The next guy was actually really nice and gave me an RMA# immediately once he realized I knew what I was talking about. After having the replacement several months, I booted up one day and the HD suddenly made the sort of noises you'd expect from a modem. That's when I discovered that the 3 platter 1.6 gig Caviars had been quietly recalled because they were extreemly prone to a variety of failures. I was rather mad, not so much because of the defect (stuff happens), but that the recall was apparently delayed and not well publicized.

      IBM could have handled the situation better for sure - a well publicized recall is in the best interest of the customer. However, more often than not, keeping the problem as quiet as possible is in the best interest of the company. IBM apparently tried to keep this one quiet (or was simply blind to the problem for a long time), but they got blasted instead. Sadly, I don't think the loss of this competitor in the HD market is a good thing.
    • Hard drives cannot decide to use other devices' IRQ numbers. It is the IDE controller that uses the IRQ, not the drive. Most IRQ controllers are hard-coded to use IRQ 14 for IDE 0 and IRQ 5 for IDE.

      If your friend had a problem with IRQs, then he most likely had either a faulty controller or a faulty BIOS or both.

  • Not quite out... (Score:5, Funny)

    by zodar ( 141552 ) on Wednesday April 17, 2002 @11:02AM (#3358951)
    Actually, IBM is going to stay in the hard drive market, but only for 330 hours per month.

    • Actually, IBM is going to stay in the hard drive market, but only for 330 hours per month.

      Kind of like how /. editors only hate the MPAA for 330 hours per month?

  • manufacture vs. research (Score:5, Interesting)

    by buzban ( 227721 ) <.ten.nabzub. .ta. .zub.> on Wednesday April 17, 2002 @11:02AM (#3358952) Homepage
    what i don't think this article talks much about is whether or not IBM will continue to conduct the voluminous research it has traditionally done relative to data storage. IBM has patents on tons (a technical term) of HDD and related technologies; the company has a hand in many such products, even when their name isn't on the label.

    personally, i hope they keep their labs working on the research end of data storage, because i'm not sure that there's anyone else to pick up the slack. if there isn't, the pace of "bigger capacity, faster, smaller footprint, more, more, more ..." just might slow down a little.

    • Perhaps they are leaving the "hard disk" market to persue some other means of mass storage.
      • wow, there is a good thought.
        I think its hight time something new came along. The market is ripe for it, over saturation of the current(read:old) technology, IBMs dominance not what it once was, they own most of the HDD patents, which might be coming due to expire hmmm.

        The more I think about it, the more I like your thoughts..

        "New, from IBM! Solid State hard drive cubes, Terrbyte per cubic inch, .005 ns access, 100 gig per second transfer rate,for 10 dollars a cubic inch!"

        ok maybe not, but Wouldn't that be fun?

    • being in this field (magnetic storage research) for over two years now, I might actually have something to say...

      IBM has done some wonderful research- they were the first to demostrate 10Gb/in^2 (yeah, dumb units) a few years back w/ a new Read Head. at the time it widely accepted that such densities couldn't be realized. today's products are shipping at these densities.

      personally, i think IBM made the right choice. historically, areal densities have been increasing by over 100% each year. the past year, it's been reduced to 60% and i would expect it won't get better. we're running into hard limits in convential recording.

      i just hope the people at IBM (some of the best in the field) either stay w/ the new venture or at least stay in the field (w/ Maxtor or Seagate).

      oh, please, avoid Western Digital. the horror stories those drives made me go through...

  • They will be missed (Score:3)

    by Lumpy ( 12016 ) on Wednesday April 17, 2002 @11:03AM (#3358963) Homepage
    Their UltraWide3 Scsi drives and the Hotplug drives were top quality and actually ran a bit cooler than the Segate drives I have.(The cooler running is very important when you have 12 of them in a server rack case) I really liked their SCSI drives and really never touched their IDE products.

    I hope the new company will continue to make enterprise and commercial class drives.
  • ...than IBM's harddrives!

  • Kudos to Big Blue (Score:5, Insightful)

    by nesneros ( 214571 ) on Wednesday April 17, 2002 @11:03AM (#3358966) Homepage
    For following the "real" rules of capitalism, and bowing out when they can't compete. I've seen too many companies lately either using legislation (telcos, entertainment) or shady business practices (MS) to avoid competition, instead of re-structuring their business or leaving the market. All this does, in the long run, is stifle the economy and give capitalism a bad name.

    • Re:Kudos to Big Blue (Score:5, Insightful)

      by Zathrus ( 232140 ) on Wednesday April 17, 2002 @11:55AM (#3359318) Homepage
      It's a lot easier to bow out of a market when it's a small portion of your total revenue or profit.

      The IBM Storage Systems division is/was a part of the Hardware divsion. That division also includes PC, notebook, mainframe, and various other hardware sales. It, as a whole, accounted for ~39% of the total revenue and ~29% of the total profit of IBM for last year (as per their latest 10K [edgar-online.com]).

      Now those aren't numbers to sneeze at, but consider that the HD division is a segment of the entire Hardware division. And while the numbers aren't split out, if you read the 10K you'll see they blame a lot of the decline in revenue for the Hardware group on pressures in the PC and HDD market.

      Given all of that, IBM can look at the long term market and spin off a portion of itself to an independant company which it retains a large share of. Realize some immediate cash gains, and you reduce the risk you are exposing the company to. If that 3rd party company folds, then you have a tax write off on an investment, and it doesn't look nearly as bad on the balance sheet.

      But the important thing here is that IBM has this option. The storage device market is not their lifeblood. If you released a holographic storage system tomorrow that blew the entire HDD market out of the water, IBM would be hurt, but not fatally impaired.

      The same is not true for most of the companies you mentioned. They're looking at potential extinction (particularly the middle men in the entertainment business - e.g. the studios and record labels). So they're fighting for their lives. They can't just "leave the market" or "restructure their business". There is no new market and no new structure for them to go to and retain anything even vaguely like what they have now.

      I deeply disagree with their attempts to have government prop their industries up, but I'm also realistic. Cornered animals don't fight nice.

      • Re:Kudos to Big Blue (Score:2, Informative)

        by Anonymous Coward
        Actually, as a former employee of the HDD sector at IBM, I can say that this is false.

        HDD was a part of the Technology Division. It was in Storage Technology Division. Storage Systems Divisions is things like tape backup systems for mainframes.

        The Technology Division is dedicated to inventing new products, etc. and then usually selling or leasin the technology out to competitors. IIRC, the Microelectronics Division was the big money-maker in Technology Division, but now (with the recent glut in the microelectronics markets) there doesn't seem to be a big money-maker...

        The Technology Division is funded seperately from the Hardware, Global Services, Software, etc. divisions. I don't know how they are making ends meet in that division right now, but signs had been bad for a while when I left. Microdrive was one of the only profitable drives that wasn't having problems during development.

      • Re:Kudos to Big Blue (Score:3, Insightful)

        by garver ( 30881 )
        The same is not true for most of the companies you mentioned. They're looking at potential extinction (particularly the middle men in the entertainment business - e.g. the studios and record labels). So they're fighting for their lives. They can't just "leave the market" or "restructure their business". There is no new market and no new structure for them to go to and retain anything even vaguely like what they have now.

        Then kudos to IBM for diversifying and changing with the times. The IBM of today looks very little like the IBM of 10 years ago, which looks even less like the IBM of 25 years ago. Remember when they were a typewriter manufacturer? Remember what a typewriter is?

        What IBM does right is always look for the new cheese instead of complaining about how the old cheese smells or how someone stole it from them. It explains why they are still a contendor after so many years.

        • Remember what a typewriter is?
          Typewriter: (N.) An analog word processor with limited editing and revision facilities and no Office Assistant.

          --
          Damn the Emperor!

  • Holographic drives (Score:5, Interesting)

    by commonchaos ( 309500 ) on Wednesday April 17, 2002 @11:04AM (#3358969) Homepage Journal
    I really hope that this means they will be coming out with a holographic drive soon, I went to a science fair back in '99 (if memory serves) at the IBM Almaden Research Center. They demonstrated a table sized holographic drive to us - they played a IBM commercial off of it... I've been waiting ever since.
    • It's likely IBM will still do research in the field. I mean, come on, we're talking about IBM here, right? No company patents more crap annually than IBM. A likely scenario would be research continues and is licensed/sold to other companies.

  • The Register has also an article... (Score:5, Informative)

    by u01000101 ( 574295 ) <u01000101@yahoo.com> on Wednesday April 17, 2002 @11:04AM (#3358971) Homepage
    ... about this, at http://www.theregister.co.uk/content/53/24896.html [theregister.co.uk] which also details the preliminary agreement between IBM and Hitachi.

  • A possible cause... (Score:3, Interesting)

    by ZiZ ( 564727 ) on Wednesday April 17, 2002 @11:04AM (#3358972) Homepage
    It seems to me that numerous times recently, purchasing IBM hard drives labelled as "new" from authorized IBM resellers, what is in fact received is often not new (for instance, with stale installations of Windows 2000, memos, and in one instance, porn) and - in fact - sometimes not even an IBM drive, but a similar case with a well-faked IBM label applied to the top. Every time complaints have been sent to the company, gotten the run-around, complained to IBM, gotten backup, and gotten a refund from the fradulent company - but this isn't a single, isolated event or merchant here...

    Anyway, maybe that has something to do with the 'competetive' market.

  • Too competitive? (Score:3, Interesting)

    by fiendo ( 217830 ) on Wednesday April 17, 2002 @11:04AM (#3358978)
    IBM is unclear on the concept. When a market experiences a decrease in the number of suppliers, the market becomes less competitive.

    I think what IBM meant to say is that they are less able or willing to compete.

  • Corrections ... (Score:5, Informative)

    by ProfMoriarty ( 518631 ) on Wednesday April 17, 2002 @11:16AM (#3359051) Journal
    They plan to sell 70% of the their HD business to Hitachi.

    Uhmmm .. this isn't exactly correct. From the article ...

    Separately, IBM and Hitachi also said they plan to combine their various hard-disk drive operations into a new, stand-alone joint venture. Hitachi would own 70 percent of the joint venture and pay IBM for its hard drive assets, subject to the completion of negotiations, the companies said.

    It would appear that the headline is more correct than the story, IBM is out, but own a 30% stake in the new company ... this is not the same as selling 70% to Hitachi ...

  • Smart move (Score:2, Interesting)

    by zorba1 ( 149815 )
    IBM has been innovating in the disk drive market for years, but it's important to note they've been innovating a sustaining technology. They haven't been as fleet-footed about leading the industry in alternative modes of storage, opting rather to make incremental improvements on a decades-old technology.

    I think IBM has seen the industry getting undercut by small co's who are focusing away from the desktop/server market and onto other devices for their storage needs. Given these are still small (but emerging) markets, it's really tough for a company to wait & see what happens and THEN innovate on top.

    I think IBM learned their lesson in this scenario from the disk drive wars circa 20 years ago, and they don't want to waste more investments of time and money into an ever-decreasing-margin business.

  • Too competitive once your premium rep is gone (Score:3, Interesting)

    by Jay Carlson ( 28733 ) on Wednesday April 17, 2002 @11:18AM (#3359069) Homepage
    For many years, IBM was the performance, feature, and credibility leader in the IDE market. I regularly paid significant price premiums for their drives, and wouldn't recommend any other drive brand for machines that I cared about working. Sometimes they got overtaken on capacity, but my view was that the extra 20% of drive space wasn't useful if the drive was slow or died after a year.

    Then, IBM's reputation got hurt; you all know that story by now. Of course, this happened after most of the IDE machines I run ended up with IBM drives in them. :-( I'm no longer willing to pay $50-100 extra for that IBM brand name. In fact, I don't know if discounting the IBM drives would convince me to buy them at this point.

    I just wish IBM had fixed their quality problems, and without looking like they were covering something up. The "you are only allowed 333 hours of uptime per month" hack didn't help them at all.

    I'd like to go back to the days when I could say "buy IBM brand drives or lose". Now I don't know what to buy or recommend. This sucks.

    • You couldn't be farther from correct. First off, consumer hard drive manufacturers make their money from OEM sales, not from the (tiny) upgrade market. The consumer perception of IBM drives would have little to no effect on sales because people and companies buy boxes with IBM disks in them without knowing that it's an IBM disk inside. I'm not just talking about PCs, I mean notebooks, and most importantly large SAN solutions. IBM and HDS both make high margin, high capacity storage boxes that compete with the market leader, EMC. The cash to be had in this market dwarfs the consumer drive market into insignificance given recent margins. The trouble is, neither IBM or HDS can manage to take significant market share away from EMC. This anouncement means that HDS and IBM will be teaming up against EMC. Hopefully this will drive the prices of enterprise storage down.
    • What is that 333 hour limit about?

      Were IBM drives failing too much and they decided they wouldn't warrant drives that are used more than that? (since they would go bad during the warranty period to often presumably).

      Is my IBM SCSI drive warranty now gone because I run the system 24/7?

  • Low Yields? (Score:3, Informative)

    by Angleworm ( 174702 ) on Wednesday April 17, 2002 @11:18AM (#3359072) Homepage
    One reason could be shocking manufacturing yields. The IBM manufacturing plant in Ireland has had terrible yield problems (even after the Telesto upgrade (aluminium to glass platters)).

    I suspect their problems could be due to badly designed and inefficient processes. The drives may work but if there is too many failures from the cleanroom no amount of sales is going to make a profit.

    I know this because I know 3 techs who used to work there!
  • Since IBM is the major (only?) producer of SSA drives, such as are used in their ESS product, is the new joint venture going to produce these now, or will IBM retain that part of the drive manufacturing business?

    It appears that this is a move by IBM and Hitachi to develop a coherent SAN alternative to EMC - and having used both IBM's and Hitachi's SAN products, this will put EMC in quite a bind.

  • Remember Micropolis? (Score:2, Interesting)

    by saihung ( 19097 )
    They made the most absolute rock-solid hard drives as far as I'm concerned. I have a 14 year old ESDI drive that they made and it STILL works like a charm whenever I need to grab something off of it, but in the end it didn't save them. When things become commodities like ram and hard drives have, people simply won't pay extra for quality. Unfortunately for IBM, a rep for quality was the only thing that their hard drives had going for them before the whole Deskstar fiasco, and now there isn't even that. IBM cannot and SHOULD not compete in the commodity market, so this move makes perfect sense.
  • I find this kinda surprising and somewhat disappointing since IBM has always been at the forefront of harddrive technology, designing the technology that many of the other manufactorers use. Still.. maybe the whole deathstar thing was a wakeup call showing that IBM has lost their game a little.

  • Merger, not sale! (Score:5, Informative)

    by rkgmd ( 538603 ) on Wednesday April 17, 2002 @11:29AM (#3359143)
    IBM and Hitachi are *merging* [marketwatch.com] their disk business so that IBM gets a 30% stake (and Hitachi, 70%). The story's comment "They plan to sell 70% of the their HD business to Hitachi." seems incorrect to me; IBM is simply estimating that its current disk business is worth 30% of the joint disk business. Also, note that Hitachi has a very strong storage systems business HDS [hds.com] (right behind EMC) that is very profitable (also resold by SUN as Storedge9900 [sun.com] series datacenter/enterprise storage products, I believe), so big blue may have merged their disk business with a view to ensuring future profitability in the overall storage space.

  • microdrive? (Score:2, Interesting)

    by Hadlock ( 143607 )
    i can imagine hitachi is "buying" the HD "company" primarily for the microdrive tech, and to licence out the "pixie dust". the deskstar is no more. Glad i bought my WD1000BB when i did :)

    so is IBM or hitachi going to keep good on their warranties for the umpteen billion deskstar drives on the market still under warranty?

    why didn't WD or Maxtor buy this HD company spinoff? i'm sure IBM's hard drive tech research division is more than worth the money...
    • The reason is that this deal isn't about hard drives, but about competing with EMC in the high end SAN space. IBM or HDS can't compete with EMC on their own, so they're merging to grow their market share. The SAN stuff is real money compared to what you piddly consumers spend.
  • kinda sad to see IBM leaving the hard drive business, seeing as they invented the technology ... ibm came out with winchester drives way the heck ago (dates anyone?), and nary a drive today doesn't use this technology ... i've got two IBM deskstars in my system right now, a 13Gig and a 60 Gig ... the 60 started the "click of death" thing at one point, but after dealing with overheating / underpowering problems and marking those sectors as bad (there were only 2, adjacent, sectors affected), i haven't had any problems with it since ...

    first PCs, now harddrives ... this is akin to ford no longer selling cars, or something ...

    sad to see it go, but hopefully the new company can put out drives of the quality of the IBM of a few years ago ...

  • Show Me the Drives (Score:3, Funny)

    by idonotexist ( 450877 ) on Wednesday April 17, 2002 @11:35AM (#3359192)
    Some where, IBM must have truckloads of harddrives waiting at a shipping dock clearly labelled with the big blue logo. Certainly Hitachi wont touch them with such tarnishment --- they must be sold at discount close-out prices! So, where are these bad buys going up for auction? ;)

  • Response to the CBDTPA? (Score:4, Interesting)

    by Silverhammer ( 13644 ) on Wednesday April 17, 2002 @11:36AM (#3359197)

    Could this also be a preemptive response to the CBDTPA [eff.org]? IBM has indeed driven much of the innovation in hard drive technology, so maybe they figure they should get out now while the gettin' is good.

  • More like a 'strategic withdrawal': Just a few years back when they discontinued PS/2 and Microchannel, waited a few years then came back.

    They'll wait for the community to forget the word 'DeskStar' and come back with a brand new line of 'enterprise class storage systems'

  • I don't see this as "IBM Giving Up Hard Drives Forever", not at all. Imation is more closely tied to 3M than this new company is to IBM, but it's certainly not as vaprous and useless as, say, Taligent.
    -sn

  • Maybe they could call the company (Score:5, Funny)

    by cca93014 ( 466820 ) on Wednesday April 17, 2002 @11:53AM (#3359310) Homepage
    IBM|Hitaclick click click grrrrrrrrrrApr 17 11:15:12 ben kernel: hdb: dma_intr: status=0x51 { DriveReady SeekComplete Error }
    Apr 17 11:15:12 ben kernel: hdb: dma_intr: error=0x40 { UncorrectableError }, LBAsect=11288143, sector=11288080

  • IBM Bailed out because Management sucks (Score:2, Insightful)

    by Anonymous Coward
    For the last few years, IBM Management has been running a chop shop. We've been selling off real-estate and entire divisions. This results in a short-term gain on the bottom line and some relief from divisions that lose money, but hurt the company in the long run. Quitters don't finish the race.

    Lou Gerstner was a horrible CEO, and this is probably his last insult to the company. Selling divisions only helps the stock price for a little bit.

    Ever hear the line, "eating your own seed corn?"

  • I know lots of you have had problems with IBM drives, but my personal hard drive failure anecdotes all involve other companies. In fact, if you avoid the "problem" drives, I think I'm not the only one who likes IBM drives, because the non-problem drives seem to get pretty good ratings from other people, too.

    But now I'm being forced to change brands. So my question to the collective mind of slashdot is: Of the remaining companies, who's the best? I prefer reliablity and compatablity over cost and speed. (Not that cheap and fast are bad; I just usually make the trade off in favor of reliable). Thanks.

    • Re:So who makes "good" hard drives? (Score:5, Informative)

      by slaker ( 53818 ) on Wednesday April 17, 2002 @01:42PM (#3360014)
      The consensus on storagereview.com is that the best all-round drives at the moment are being made by Maxtor and Western Digital. Maxtor, in particular, hasn't had a troublesome drive model in quite some time, and has an excellent service orientation, including a no-hassle RMA service.

      Reliability is found in the mid-range 10,000rpm SCSI drives like the Atlas III and in the low-end 5400rpm models, particularly those from Samsung and to a lesser extent Seagate and Maxtor. SCSI drives *do* have longer warranties, if that says anything. In 7200rpm, probably Maxtor or Seagate's offerings.

      Quiet: IDE, the choice is just about any 5400rpm drive, or Seagate's Barracuda IV for 7200rpm. Fujitsu's MAN-series SCSI disks are as close as you'll get to quiet, there.

      Fast: IDE, 5400rpm: Western Digital's WD800AB. 7200rpm: Either Maxtor's 740X (8.5ms seek) or the Western Digital WD1200JB (transfer rates through the roof).
      SCSI: Maxtor's Atlas III for 10,000rpm or Seagate's X15-36LP among the 15krpm units.

      Is that what you want to know?

      Find out more at www.storageforum.net or www.storagereview.com. We're really very helpful people. :)

  • So with a little more R&D you can 500 gigs of data on a drive that you have to get a special permit to access because if the use of the hard drive is not regulated the data will become nothing more then a piece of metal with plexi-glass on top of it. (Assuming you performed that mod)
  • This is great news for Sun, since Sun's two major disk suppliers are currently IBM and Seagate. (Having two vendors in the first place came as a result of some nasty supply problems with having only Seagate). With IBM's disks going to a business largely owned by a now-very-important and mutually-benificial major storage partner (Hitachi), this means Sun won't be getting their disks from a competitor anymore.

    Hitachi has some excellent storage R&D in their own right as well, and arguably have the best technology in the SAN market. As we all know, most good tech starts on the high and and filters its way downhill.
  • Here at first I thought that IBM was bailing out the hard drive industry, not bailing out of the hard drive industry. I was thinking, "Who'd buy them, considering their track record?"

    But I see this as a very good thing.
  • I have 2 IBM SCSI drives and they have worked flawlessly so far.

    IBM makes good, reliable drives. Sure you pay a bit more for quality than you do for crap. That is the case IN EVERY OTHER INDUSTRY.

    I won't be buying any drives from the new company, I want to buy American and keep Americans at work - I don't want to buy Japanese products.

    So what would be a good alternative for high quality, fast SCSI drives?

  • Perhaps the scientists at the IBM Almaden Research Centre have finally run into the limitations of magnetic storage.

    In 1997 when I visited and spoke with a number of their people, we discussed how as a storage medium, disk drives use a relativly unprepared surface with a sophisticated head, unlike memory which uses a sophisticated surface preparation to store data. In drives the money is spent on the head.

    As I recall it, the trend was then toward preparing the disk surface more and more in order to give the head a fighting chance to distinguish between bits.

    The limit of size was near (at the time they were finilising their coin sized drive) to the point where information was being stored close to molecular size.

    Perhaps they have now reached that limit and have decided that funds are better spent on other storage research.

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