So, following on from Western Digitals agreement to acquire HGST, the disk drive division of Hitachi, Seagate strike a deal to acquire the disk drive division of Samsung.
Granted, this is old news now, but my wife just gave birth so I feel I have an excuse to be a little behind the times. Anyway, this is a word or two on a concern I have over these two deals…
With the above acquisitions, we will be left with two and a half drive vendors –
- Western Digital, with ~50% market share
- Seagate, with ~40% market share
- Toshiba, with scraps that are left over
Generally speaking, while there are 3 or 4 major players in an industry, competition can work its magic – driving innovation up and prices down. But when it gets down to just two giants in an industry it often becomes all too easy for them to become slack. Think drastically reduced R&D budgets leading to slowed innovation. And at worst, things like unofficial pricing cartels. Lack of competition is rarely a good thing.
It is looking inevitable that we will soon be down to two players in this space. Will Toshiba be able to sell in large enough volumes to keep production costs economically viable? Samsung certainly struggled.
Addicted to Storage
In today’s world we are addicted to oil. It seemed to creep up on us, like the appearing of the morning dew. But sure enough, we are addicted to oil. We can’t (or aren’t prepared to) live without it.
The same pattern seems to be happening with storage. We are slowly becoming addicted, and I propose that by tomorrow we will be well and truly addicted!
Not convinced? Ask yourself the following – which of the following do you find harder –
- Deleting old data, be it family photos and movies, or corporate data that you are responsible for.
- To stop filling your car up.
Every business I have ever worked for has felt it’s data, every single bit of it, far too important to delete.
On a personal level I was recently forced to delete some photos and videos from my Android phone. Wow, it was like pulling my own teeth out!
And I don’t see any signs that our addiction to storage will go away any time soon.
The Storage Barons and Drug Dealers
As soon as storage becomes like other necessities of life such as oil and air, we will find that we are at the mercy of those that control the supply – the Storage Barons.
Let’s consider ourselves fortunate that the powers that be haven’t figured out how to charge us for the air we breathe, or to effectively turn it off for those who don’t pay 😉
In tomorrow’s world, The EMC’s, HP’s, NetApp’s and even the cloud storage providers become the guys who own the petrol stations (gas stations for my friends on the other side of the Atlantic). They supply the taps that satisfy our cravings and provide value-add, and add their mark-up, but they don’t ultimately control the price. Thinking of it another way, these guys are the drug dealers.
The Western Digitals and Seagates become the oil companies of today. They do the exploration (R&D) and the drilling (manufacturing), and it is they who ultimately control the price! With such power and control come challenges. The challenge is not to become drug gangs, exploiting their addicted buyers.
All just my penny’s worth. And I’m sure that WD and Seagate are benevolent corporations that would never slip in to such a trap despite the pressure of shareholders.
Sadly I see no way for storage practitioners like myself, and no doubt many of you, to rise to power on the back of this wave and live out the rest of our lives filthy rich and powerful 🙁
Comments welcome. Opinions expressed are my own, not my employers.
Oh and because I’m not satisfied talking about technology in my day job, I talk about it on Twitter too. Feel free to sign up and talk to me @nigelpoulton Sorry but Im addicted to talking about technology 😀