Advancements and trends in the media market are indicative of how storage is used.
BY PETER BROWN
Removable storage media conjures up images of floppy disks or half-inch tape cartridges. But in today's storage market, options for both the enterprise and consumer stretch far beyond these old conventions. Removable media is also the other half of removable storage-the cartridge or disk without which a removable drive is nothing. Advances in media play an important role in the capacity road maps of both tape and optical technologies.
International Data Corp. (IDC) recently sized and re-forecast the markets for optical/ removable magnetic and tape media. This article highlights our findings and the underlying trends.
The optical option
Over the past decade, the number of choices in removable media has grown considerably in desktop and enterprise markets. On the desktop, the venerable floppy drive has been challenged by several iterations of higher-capacity products, including magnetic technologies such as Imation's LS-120 and Iomega's Zip drives and optical devices (e.g., CD, DVD, and magneto-optical drives) from a variety of players. Touting such advantages as higher capacity, improved speed, and longer data life, these products have all vied for the coveted role of the "floppy replacement."
Of these technologies, CD-R/W has emerged with the killer attribute: standardization. But it is the ubiquity of CD technology that has enabled CD-Recordable to emerge as a true floppy media in the new digital economy.
The ability of CD-Recordable to be played in a wealth of devices in both PCs and consumer electronics has been a major driving force in the growth of the optical/removable media market, representing 97% of shipments in 2000.
On the enterprise level, large form-factor optical technologies may once again compete more effectively against tape in archival applications. Forthcoming technologies such as Multilayer Fluorescent Disk (MFD), Optical Super Density (OSD), and Ultra Density Optical (UDO) are currently soliciting media support, and more products are expected.
Capacity is becoming denser and less expensive, and the improved reliability of CD and DVD recording and the need for true-WORM archival media are expected to drive niche applications of enterprise-level optical media. In addition, new applications for optical technologies will drive future advances in both capacity and performance.
In 2000, the CD-Recordable market continued to record strong unit growth, fueled by CD-R media. The fast capacity ramp in Taiwan caused an oversupply in the CD-R market worldwide. As a result, the market experienced rapid price declines through the first half of the year but showed signs of bottoming out in the second half. The low cost of media was a major driving force in the adoption of CD-recording on the desktop.
Meanwhile, the DVD-Recordable market grew 86% in 2000, resulting in 4.1 million units. Competing DVD-Recordable technologies still vie for widespread acceptance. The lack of standard technology and an installed base of DVD-ROM drives capable of reading recorded DVD data will hinder widespread adoption in the near term. However, we expect that the installed base of DVD-ROM and consumer DVD players capable of reading recorded DVD will reach a volume capable of supporting more significant unit volumes of DVD-Recordable media in 2002.
As for low-end magnetic products such as high-capacity magnetic disks, which were once viewed as the floppy heir, they have taken a beating from the strong presence of CD-Recordable media. Iomega's Zip100 media is the most pervasive product in this market. Early lack of brand awareness for SuperDisk has led to a lack of its adoption, hindering media sales.
In 2000, shipments of magnetic drives slowed, declining more than 20%, while media shipments increased to 74 million, representing a 10% growth. (In most cases, drive vendors also supply media to support their technologies.) However, the value of shipments declined 15% to $656 million, due to price pressures from CD-R.
Overall, the current climate in the optical/removable market is mixed. On the low end, the market is growing rapidly in terms of unit volumes, driven by CD-Recordable. DVD-Recordable technologies hold promise for the future as the installed base of drives supporting one or more of the developing formats increases. In high-end markets, shipments of large form-factor optical media and high-end magnetic media continue to wane as the installed base of these drives shrinks.
The tape market has a different dynamic. The addition of many types of technologies has led to an application-driven market. Technology developments have given end users a complex array of choices, depending on their speed, capacity, and reliability needs. While the drive vendors tout their head technologies, little attention has been paid to the critical role played by media.
Media vendors such as FujiFilm, Maxell, and Sony have increased tape density through a variety of innovative manufacturing processes. Dual-coating technologies, where magnetic material is "painted" onto a base film in multiple "coats," and metal-evaporated media, where a mist of melted metal coats the base film, have enabled magnetic density improvements comparable to those being made in the hard-drive industry.
It is the marriage of these media advancements and improvements in head technologies that have brought the tape market into the era of the "Super Drive."
As for actual numbers, DC2000/personal media continued to decline in terms of units and "street" revenue last year, and efforts to move Travan off the desktop and into the more robust entry-server backup space did not materialize. As a result, we expect the DC2000/personal market to continue to decline through the forecast period at a rate of 3.4% CAGR from 2001 to 2005.
Media sales in the entry space is beginning to feel the effects of this declining installed base; however, it's important to note that the potential for profit in the media business often outlasts the drive technology's life cycle.
The SLR market offered a wide array of products last year, from desktop drives to autoloaders. New high-capacity offerings are targeted at workstation and PC server markets. On the high end, SLR-in particular, the SLR100-continues to compete with DLT and 8mm formats. We expect these higher-capacity SLR devices to increase their share of total SLR media shipments. This increase will be driven by efforts to automate SLR, boosting the technology's media tie ratio.
Meanwhile, with 35% total unit shipments, the 4mm/entry-server market continues to be the largest consumer of tape media. This segment's growth dates back to the introduction of DDS technology 10 years ago and is fueled by the technology's penetration into the <$25K server and workstation market.
The end of the DDS road map signifies a slow decline, however. Low-cost media and drives from Ecrix and Benchmark will vie to become the follow-on technology to this large market segment, which currently represents 42% of the overall tape media market.
As for the 8mm market, metal-evaporated tape technology continues to breathe life into the segment. The market is transitioning from legacy Magnetic Particle (MP) media to Advanced Metal Evaporated (AME) technology, which supports Exabyte's Mammoth, Ecrix's VXA, and Sony's AIT drives. Despite similar media technology and form factor, these products lack compatibility.
Nonetheless, the new media has led to improvements in both capacity and performance, which have enabled both AIT and Mammoth to enter the robust midrange tape automation segment and has positioned Ecrix as the replacement technology to DDS.
In the midrange, DLT tape faces formidable competition from the LTO Ultrium consortium. Hewlett-Packard, IBM, and Seagate all delivered LTO Ultrium drives late last year, presenting a direct challenge to DLT. Eight media manufacturers have signed LTO media licenses; however, only FujiFilm and Maxell have completed compliance testing. Both companies began shipping media in small volumes in Q4. We expect double-digit growth in LTO media through 2005, with annual unit volumes topping 30 million, as the majority of LTO drives are integrated into automated tape systems over the near term.
We expect Super DLT to compete for the same segment as LTO, but due to DLT's larger installed base (e.g., DLT8000, DLT7000, etc., and Benchmark DLT1 drives), we expect migration to Super DLT media to be slower. While overall Super DLT unit volumes will be comparable to LTO media shipments, the variety of media supported by DLT drives will hamper early Super DLT media shipment growth.
Pulling it together
The removable media markets differ widely in terms of opportunity for media manufacturers. CD-R, the dominant segment in the optical/removable market, has moved, in large part, to a floppy replacement model in which volumes are high and margins are low.
Conversely, the tape market is a low-volume, higher-margin market. Tape media manufacturers now work very closely with drive manufacturers, developing technologies for improved capacity and performance. Regardless of the opportunity of the model, both markets will continue to grow through the foreseeable future as an integral part of the digital economy.
Peter Brown is a research analyst, removable storage, at International Data Corp. (www.idc.com) in Framingham, MA. He can be reached at firstname.lastname@example.org.