Hard drive bloodbath (who's left standing?)
System Builders Summit, Monte Carlo Only four players will be left in the PC/server hard drive market in three years time. Or so IBM reckons.
Big Blue forecasts a major punch-up, with Samsung and Western Digital ending up as casualties. Hitachi can get the hell out of the mobile hard drive business as well.
This world view comes from Paul Griffin, IBM's EMEA VP for its Technology Group, speaking at the IFE/System Builders Summit in Monte Carlo. "You'll see a bloodbath over the next three years. The rules will be last man standing," he said.
The survivors are going to be Seagate, Fujitsu, Maxtor. Oh, and IBM.
"No disrespect to Western Digital but..." Griffin decided not to spell out exactly why WD is going to be toast. As a mark of respect, no doubt.
This is Griffin's assessment of the three non-IBM big players: Seagate, it owns the high end but is flawed because of no mobile business; Fujitsu, closest to IBM in terms of deep pockets and ownership of technology and is starting to flex its muscle; Maxtor is going to have a couple of bumpy years.
According to IDC, the world hard disk market has been suffering just five per cent compound growth between 1999 and 2001. This is taking it from a $25 billion to $31 billion market, and represents a shift in volume from 200 million to 230 million.
"These are not attractive numbers for the industry," said Griffin.
Better news is coming from the mobile market. This is enjoying an 18 per cent growth rate from 1999 to 2001 - 30.5 million units to 36.1 million. IBM has 40 per cent of the market; Toshiba has 25 per cent; Fujitsu has 20 per cent; and Hitach has 15 per cent.
In Q3 2001 10GB drives will make up 50 per cent of shipments.
Griffin didn't think much of Toshiba's performance. "We've lost a few points, but they have really slipped." He said that a majority of Tosh notebooks would have IBM drives inside them.
Griffin had held his hands up the system builder audience at the start of his talk, and said he suspected they didn't find it that hard to compete with IBM's system business because IBM is a large company which can be slow to react to market changes.
So for the same reasons Rafi Razzak, MD of Centerprise and an ex-IBM man himself, wanted to know why OEMs should do business with IBM's Technology Group.
"That's why I don't like taking questions from ex-IBMers," said Griffin.
"With considerable difficulty," he conceded. "We've lost the plot a little bit but we'll come back. IBM always gets there in the end." ®