IBM Bails Out of the Hard Drive Market

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.

Notebood Hard drives

[robkill]

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.

Price reduction?

[fabiolrs]

"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...

manufacture vs. research

[buzban]

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.

Re:They were the real competitors

[garcia]

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.

Holographic drives

[commonchaos]

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.

A possible cause...

[ZiZ]

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?

[fiendo]

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.

Smart move

[zorba1]

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

[Jay Carlson]

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.

Re:manufacture vs. research

[CynicTheHedgehog]

Perhaps they are leaving the "hard disk" market to persue some other means of mass storage.

Re:They were the real competitors

[Derkec]

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:manufacture vs. research

[parker9]

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...

Re:Notebood Hard drives

[Innominate Recreant]

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.

Remember Micropolis?

[saihung]

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.

microdrive?

[Hadlock]

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...

Response to the CBDTPA?

[Silverhammer]

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.

Re:Good!

[ahfoo]

Okay all you holy rollers. Was the point of my post
A: that I lost data
or
B: that after a mere six months IBM didn't offer to send a replacement, but told me to go to a seek out a recovery solution for several grand?

The answer is B.
And, they actually told me that if I opened the case all my data would be instantly lost and this was why I should never attempt to recover my own date. In fact, I did!
If you read my post, it said I couldn't back it up, not that I never recovered it. I did! I popped the fucker open and loosened the screws and it started turning again and I got my data out although the drive arms flipped out the fourth time I powered it up and that was the end of the story. And the moral of the story is, those drives sucked.
Flamebait --whatever. IBM support sucked in this case.

Molecular Storage Size = Obsolete Technology?

[|>>?]

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.