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Krakoom! OCZ flies into the ground. Time to salvage the engines and look around

Hey, where is everyone? In a room with a flash fab operator

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Blocks and Files Ryan Petersen made OCZ a high-flyer: and then nearly piloted it into the ground. Replacement CEO Ralph Schmitt did crash-land the damaged business, but was unable to repair it and get it flying again. Bankruptcy beckons.

OCZ shot itself in the foot (causing its feet to slip from the rudder pedals leading to a crash -Ed) with daft customer-incentive programs that took more than a year to clear up, and then belatedly realised its mainstay consumer SSD market was no longer the domain of get-rich-quick component bundlers. The flash foundry operators and big OEMs were taking the market over at frightening speed.

So it changed focus to enterprise SSDs but it was too late; supplier consolidation was taking out excess suppliers there - witness WD and sTec - and that market was closed to a weakened SSD player under severe financial constraints and carrying a lousy brand image.

The thing of it is, the flash product market is maturing quicker than OCZ imagined. Consistent and secure NAND chip supply is crucial - are you listening to this LSI? - and so is owning your flash controller and management IP. Selling flash controllers to small-scale OEMs, like OCZ, is no way to build a secure and growing business.

OCZ's failure raises questions over all the other flash product suppliers with no reliable, secured flash chip supply: such as - we understand - Corsair, Plextor, Kingston, WD's Hitachi GST, LSI, OWC, Patriot, SuperTalent, and Viking Modular.

If OCZ assets get bought by Toshiba then, hopefully, existing OCZ customers will be able to get some kind of support. If not then they won't, and they have to buy new SSDs elsewhere. Then they'll likely go to suppliers who will stick around - the flash fab boys and their partners with end-user product, for instance (this isn't an exhaustive list) Intel, Micron, Samsung, SanDisk, Seagate, Toshiba and Violin Memory.

Both HGST and LSI need to get locked-in NAND chip supply deals arranged ASAP, in fact AFAP - as fast as possible. Ask yourself why EMC, Cisco and others should continue to source flash cards and SSDs from suppliers with no reliable NAND chip sourcing arrangements.

And that means suppliers like LSI and HGST. Both need to have supply arrangements in place directly with flash fab owners or their close partners to preserve product ship deals with EMC and the like.

And that means LSI and HGST have to negotiate with Micron-Intel, Samsung or Toshiba-SanDisk or SK-Hynix. They are probably already doing so. If not, then they really have to ask themselves why not. ®

Bootnote

HGST has an SSD developed with Intel so the possibility of a closer arrangement there obviously exists.

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