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Pillar Data Systems Blog: Pass the Morton's Salt

This post is taken from Mike Workman's recent blog post, Pass the Morton's Salt.

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When I was quite a bit younger some really great folks at IBM gave me the opportunity to help start a Hard Disk Drive OEM business.  I was part of the Storage division in San Jose California. At the time we built proprietary, non-standard products with all custom mechanical and electrical parts.

The writing was on the wall, the future lay in using high volume, and hence lower cost parts. Not only did this amortize engineering costs (NRE), but tooling and test process costs could be amortized over a much larger volume as well. The idea was – use custom parts only where they provided a distinct competitive advantage. Then, build designs that could be sold into many products, not just one.

IBM wasn’t alone in this, the rest of the world was trying to gain leverage by producing standardized components as well. Seagate was building an empire out of providing 5.25” standard form factor drives to everyone, including the IBM PC (AT back then).  But IBM had invented the disk drive, and its leadership was furious about ceding the high volume low cost drives to the likes of Seagate, and Conner Peripherals. Besides, it was clear that before long, the mechanical advantages of smaller form factors and advancing technologies would obsolete the “big drives” that were sold two or four spindles to the refrigerator sized box.

The IBM AS400 group had the same idea: Build smaller drives with advanced IBM technology to sell to internal customers like the AS400 and IBM PC groups. While the AS400 came from the “custom” world, the IBM PC guys new that they needed best of breed cost in all their components, and the thought of being locked in to some over-transfer-priced HDD from another division was repugnant. The Rochester team made an “almost standard” product: Little things like non-standard mounting holes were rendering their drives incompatible for PCs inside or outside of IBM.

I was asked by “The Chairman” and a few San Jose execs to build an entrepreneurial program inside IBM – the goal of which was a) To build a standard form-factor and interface HDD, and b) Build one packed with enough technology like MR heads to allow even the high-end storage guys to incorporate it into a modular version of the product.  Unfortunately the IBM Rochester team was heading in a similar direction, so a political battle ensued in which after a squabble, I landed in Rochester, Minnesota. As my California friends said at the time “He really must have pissed someone off to be sent to Minnesota”. From Rochester (home of the Mayo clinic) I managed what I named Allicat – an enterprise class drive in reliability and performance that fit Industry standard electrical and mechanical specifications.  The “Alli” in Allicat came from the Alliance of San Jose and Rochester. At 2GB, 5400 RPM, SCSI and IPI-2 interfaces, the drive was the beginning of the OEM HDD storage team within IBM. We went from about $0 top-line revenue to about $4.6B in the next 11 years. 

Disk drives today are indeed labeled as a commodity. Lots of definitions of a commodity exist including simply something that is bought or sold. I maintain that when most of us think commodity, we think about a product that has minor differentiation against others that are adequate substitutes. Table salt for example: Nobody says “Please pass the Morton’s Table Salt”.  Instead, salt is salt, and rarely is anything but “Please pass the salt” heard at any table. Likewise, gold is gold, wheat is wheat, etc.  Differentiation of one commodity over another is usually at the fringes -- fringes which are desperately held on to by manufactures (But when it rains, this salt still pours!).

Moving up the food chain buyers of PCs and Servers that incorporate HDDs always make sure that their commodities include two or more sources. Same for muffin fans, chassis, cables and connectors.

What about storage arrays? Well the more complicated the system, and the smaller the volume requirements are for a system, the less easily it is commoditized. After all, the how many Golden Gate bridges are needed in the world and how standard is the interface between the bridge and the terra firma it sits on? So the truth is, while buyers try and push arrays toward the commodity spectrum, it is difficult to substitute one array for another at some level. Training, management, interoperability, application APIs are all different enough that one vendor is much easier than three, and disparate types of arrays at some level cost the buyer money by shear reason of their differences.

What are some of the consequences of commoditization in the storage business? Here are a few, I am sure that many of you can add to this list:

  1. Disk will continue as a commodity.
  2. SSD will become a commodity. Manufacturers will struggle valiantly but much like the HDD business, that large OEMs will drive toward standardization and multiple sources as volumes increase. One might argue that we are nearly there already, but firmware maturity is still disparate amongst manufacturers. 
  3. The number of manufacturers of SSDs will grow for awhile, and eventually decline as margins force consolidation.
  4. Flash memory used in SSDs will become a commodity. Today there are still some differences but there will be a convergence.
  5. Plug-in Cache modules (PCIe based Flash Memory) will converge into a commodity. Right now many players are striving to differentiate themselves, but the pace will be fast and furious and largely decided by large volume OEM’s wins.
  6. As SSDs reduce in price and increase in capacity, there will be larger and larger a substitution of SSDs for HDDs. 
  7. A trend toward SSDs over HDDs will cause all storage arrays to be re-architected. Today’s arrays are not built properly for maximum utilization of the performance benefits of SSD. This will affect everybody in the business. Pillar’s advanced Axiom architecture is already under development. This will be fun.

Oh, and I like Minnesota, really. Sure it is cold, but that wasn’t the real problem. Rather, it was how long it was cold. And thank goodness for the commoditization of salt, because they use a heck of a lot of it.

- Mike Workman, Chairman & CEO, Pillar Data Systems

 

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Unitiv, Inc., is a professional provider of enterprise IT solutions. Unitiv delivers its services from its headquarters in Alpharetta, Georgia, USA, and its regional office in Iselin, New Jersey, USA. Unitiv provides a strategic approach to its service delivery, focusing on three core components: People, Products, and Processes. The People to advise and support customers. The Products to design and build solutions. The Processes to govern and manage post-implementation operations.