What`s Next for Removable Storage?
Iomega is king of the hill, but there are a number of existing and emerging alternatives for desktop removable storage.
By Charles T. Clark
Amid perpetual change in the computer industry, the 3.5-inch floppy has remained a constant. But that`s changing. Large files being downloaded from the Internet, a renewed interest in security, a dramatic increase in the amount of work that people are taking home, and a host of other factors are mandating a replacement for the venerable floppy and its stingy 1.44MB. Vendors are responding to this demand by introducing a variety of new technologies.
These solutions fall into three broad categories: high-capacity flexible diskettes, high-capacity disks that use hard-drive technology, and a third (yet to be delivered) technology based on near-field recording (NFR). High-capacity flexible disks mostly target the low-end consumer market. Removable rigid disks address the high end of the market--power users such as software engineers, graphics artists and, in general, knowledge workers dealing with very large graphics or multimedia files. NFR drives, which use a new version of magneto-optical technology, are aimed at the very high end of the removable storage market--initial implementations are expected in 10GB (Q4 `98) and 20GB (Q2 `99) versions.
The new technologies offer innovative solutions, but they cause one problem: lack of standardization. According to Jim Porter, president of Disk/Trend Inc., a market research firm in Mountain View, CA, "The key thing frustrating the market is lack of standardization."
Nevertheless, the market for removable storage is growing at a brisk rate. According to International Data Corp. (IDC), a market research firm in Framingham, MA, the market for high-capacity floppy disks was $682 million in 1997 (a 49% increase over 1996) and is expected to grow to $797 million in 1998 (a 17% increase). By 2002, IDC expects this market to grow to more than $2 billion, at a compound annual growth rate of 28%.
According to Bob Amatruda, senior analyst for tape and removable storage at IDC, Iomega dominates this market with its Zip drive. Imation`s SuperDisk (formerly called the LS-120) is a distant second. Potentially heightening the competition, Sony plans to introduce its HiFD product late this year, and Caleb Technologies, of Boulder, CO, is also planning an entry in this market.
Iomega continues to set the pace in this category, and the pace is torrid. "Iomega`s Zip has really defined the segment since its introduction in late 1995," says Amatruda. "They`ve been able to define it, market it, and grab the lion`s share of the units shipped." Iomega has sold more than 14 million Zip drives.
Zip is a 100MB flexible disk drive that can be used with notebooks and desktop computers. It`s relatively inexpensive, offers fast backup, provides security for critical files or applications, and gives users a means of transporting files between home and the office.
Having decimated the competition in the consumer market, Iomega is now turning its attention to the OEM market. "OEMs are key to the overall success of the company because as you get the installed base you get to the point where you`re working toward a de facto standard," says Tim Johnson, Iomega`s director of marketing for the Zip after market.
In preparing for this transition in its business model, Iomega has had to lay off workers and take other cost-cutting measures. In the quarter ending June 27, the company posted a loss and announced layoffs of about 700 people. "It could prove to be a difficult transition for Iomega in the short term," says Amatruda. A key hurdle for the company is adjusting to higher volumes and lower margins in the OEM market.
Iomega`s primary competitor in the high-capacity flexible disk market is Imation`s 120MB SuperDisk. However, Zip is outselling SuperDisk by a 10 to 1 margin, according to Disk/Trend.
Jon Siegel, director of global marketing for Imation, claims the "SuperDisk is unique in that it represents an evolution from a very well-accepted standard--the current floppy diskette. SuperDisk allows you to read and write not only to the 120MB SuperDisk, but also to 1.44MB and 720KB diskettes."
Adding to the competition, Sony has announced its High Capacity Floppy Disk System, dubbed HiFD, and is promising delivery late this year. The company claims HiFD will be fully backward compatible with standard 1.44MB floppy disks and will provide 200MB, a read transfer rate of 3.6MBps, and a write transfer rate of 1.2MBps. In addition to Sony, Alps Electric and Teac have signed up to manufacture the drives.
According to Dirk Peters, general manager of the value-added products division, Sony had some specific goals in mind when they designed the HiFD removable drive. First, it had to provide compatibility with existing floppy diskettes. But the company also wanted to provide performance and capacity for the future. In the performance area, the company had a specific goal for HiFD: "We had to have a product that, at a minimum, could stream full-motion video," says Peters.
Storage for Power Users
One of the other removable storage market segments--removable rigid disks--provides even larger capacities than high-capacity flexible disks. According to IDC`s Amatruda, this market is more of a niche market compared to the flexible disk market. He pegs 1997 sales at $328 million, growing to $428 million in 1998 (a 31% growth rate). Between 1998 and 2002, Amatruda estimates the market will grow at a compound annual growth rate of 13%, reaching $687 million in 2002.
In this segment of the market, Iomega`s 1GB Jaz and 2GB Jaz2 drives compete primarily with SyQuest Technology`s SparQ and SyJet. "The types of professionals that we`re targeting with Jaz drives are power users: creative and technical professionals in IT/IS, software and Web development, audio and video editing, and engineering," says Karen Anderson, product manager for Jaz.
Iomega is the leader in this segment of the removable storage market, according to IDC. In 1997, Iomega had a 55% market share, compared to SyQuest`s 27%. In 1998, IDC estimates Iomega will slip to 47% and SyQuest will increase to 36%.
Battling it out with Iomega in the high end of the removable storage market is SyQuest, which has three entries: SparQ, SyJet, and Quest.
SparQ is a 1GB drive aimed at the consumer market and applications, ranging from PC/laptop backup to transporting files between home and work to editing video clips. SparQ is priced at $199; individual cartridges cost $39.
SyQuest`s strategy is to market SparQ against Iomega`s Zip, focusing on performance and capacity advantages. In addition, SyQuest has reduced the cost per megabyte of its drives far below Iomega`s.
According to Ed Harper, president of SyQuest, the rationale of offering so much storage for a relatively low price is to gain visibility in the mass market. "We lowered prices in the retail segment for one reason--visibility, because the retail marketplace has the biggest audience that you can achieve." SyQuest hopes to leverage this visibility as it attacks the corporate market.
The SyJet is a 3.5-inch 1.5GB removable hard drive aimed at applications such as multimedia, desktop publishing, pre-press, imaging, and complex graphics.
SyQuest`s newest entry is the Quest, a hard-disk removable drive with a capacity of 4.9GB that uses dual-stripe magneto-resistive heads to achieve a high areal density. The drive also features an active air filtration system that reduces contamination, which improves reliability. SyQuest will target the Quest drive at audio and video editing, as well as multimedia and desktop publishing, according to CEO Harper.
Like Iomega, SyQuest is also making a strong bid for the OEM market. SyQuest already has an agreement with Compaq for the SparQ drive, but the company is probably going to be cautious in making this transition, says IDC`s Amatruda. "SyQuest has typically not played in the OEM arena. However, Compaq`s announcement that the SparQ will be available in the Presario line as a built-to-order peripheral will boost SyQuest`s fortunes in some ways: It will give them much more visibility and recognition by being on a Compaq platform," says Amatruda, "but they have to keep their cost low and quality up because OEMs are leery of some of these peripherals because of quality issues. OEMs do not want to see PCs coming back because a $180 drive failed."
New Kid on the Block
Waiting in the wings to do battle with SyQuest`s Quest is TeraStor`s NFR technology. A 10GB NFR drive is due in the fourth quarter, with a 20GB version due in the second quarter of next year, according to company officials. The drives come in a 5.25-inch half-high format.
NFR uses a combination of magnetic and optical technologies to achieve extremely high capacities. Final pricing has not been determined yet, but the 10GB drives are expected to range from $699 to $799, while the 20GB drives are expected to be priced from $999 to $1,199. Average seek time is under 18msec, and the sustained transfer rate on the 10GB drive is slightly more than 6MBps (40MBps burst). Both drives will be available with a Wide UltraSCSI interface.
TeraStor`s drives will compete in the consumer market against Iomega`s Jaz. "Once we get into the consumer market, we`ll be hitting Jaz head-on," says Amyl Ahola, president and COO at TeraStor.
Other potential applications for NFR drives include movie/music distribution and archival, medical imaging, CAD/CAM, video editing, multimedia, and other graphics-oriented applications.
Yet another potential competitor in the removable storage market is Avatar Peripherals, which produces a small (2.5-inch) hard disk that is designed specifically for notebooks. Despite its small size--about the size of a credit card--Avatar`s Shark has a capacity of 250MB.
Alan Stoddard, product manager for Avatar, says the Shark differs from the competition in several ways, but one feature stands out. "The primary feature that differentiates us from the competition is portability: It doesn`t require an AC adapter and can share power with the system that it`s attached to. And the drive is lighter and smaller than other devices--you can fit it in your shirt pocket."
Stoddard says Avatar`s Shark 250 drive competes against Zip in the notebook category, but the Shark has several advantages, including speed and capacity. Because the Shark uses hard drive technology, it is about four times faster than Zip, with twice the capacity (250MB vs. 100MB). However, Avatar has not been able to sign up any OEMs, although Stoddard says the company is vigorously pursuing this avenue.
CD-RW and DVD-R
Two recent entries in the removable arena are CD-ReWritable (CD-RW) and rewritable DVD optical technologies. The CD-RW arena is dominated by Panasonic, Philips, and Ricoh. The market for CD-RW is expected to continue growing (more than 800,000 units were shipped last year) until the format controversy is settled in the rewritable DVD market.
Disk/Trend`s Porter attributes the success of CD-RW in part to the confusion surrounding rewritable DVD. "A lot of people are saying, `I`ll stick with CD-RW for awhile because it has a standard while rewritable DVD only has confusion.`" (For more information about rewritable DVD, see InfoStor`s July Cover Story, "Rewritable Formats Chill DVD Market.")
As high-capacity removable storage drives become more pervasive, the confusion that reigns from lack of a standard is likely to increase. New entries into the market, with different technologies, will add to the confusion. Despite this, storage analysts expect the market to grow steadily, but not spectacularly, over the next five years.
The major players are already shifting their emphasis from mass market to corporate and OEM markets, which is where the bulk of the growth for removable storage will occur. Iomega will probably continue to dominate both the low and high end of the market, but its domination will be challenged by new competitors entering the field and by SyQuest pushing down into the low end. At the high end, Iomega and SyQuest will be locked in a tight struggle for domination, with SyQuest gaining ground through higher capacities and aggressive pricing.
Although some aspects of removable storage are uncertain, one thing is certain: contrary to the old adage, you can take it with you.
Put Some Zip in Your Business
AlphaGraphics Inc. is a worldwide leader in print-related and digital publishing services, with over 340 locations worldwide and customers such as Arthur Andersen and McGraw-Hill. AlphaGraphics relies heavily on Zip drives and media and has been using the drives since they were introduced in 1995, according to Robert Stober, vice president of technology.
AlphaGraphics began using the drives because its customers were putting print jobs on Zip disks. The drives worked out so well, says Stober, that the company began to use them internally as short-term backup devices to store files. "Dealing with, say, 20 different print jobs requires a lot of storage space, and it`s easy to store the jobs on Zip disks for a while rather than storing them all directly on the computer."
The AlphaGraphics stores also have customers who use SyQuest drives and media. Most of these customers are working on Macintosh platforms, and Stober says he has seen some movement to Zip drives among these users.
Stober says AlphaGraphics has found Zip to be a cost-effective solution. "For what you get out of Zip for the price, it really can`t be beat." As a result, the company recently selected Zip--as well as Iomega`s Jaz drives--as the preferred removable media solutions for the company.
All That Jaz
Axis Communications, in Woburn, MA, designs and manufactures connectivity solutions that are resold by other companies, including Hewlett-Packard, Meridian, and Procom.
Axis started out using CDs for its StorPoint CD network-attached storage (NAS) solutions, which attach directly to Ethernet LANs. But, according to Charles Kronauer, senior product marketing manager, when Axis saw the Jaz drive gaining wide acceptance in the marketplace, the company decided to offer a version of StorPoint that used Jaz drives.
The resulting product was StorPoint HD/4, a NAS solution that permits Jaz drives to be attached directly to an Ethernet network. The StorPoint HD/4 uses four Jaz drives in a tower along with a connectivity module.
The StorPoint HD/4 allows end-users to exchange data via the network rather than working on data residing on their PCs and then physically transporting it to other users via a Jaz cartridge. Another attractive feature of the StorPoint HD/4 is the Web-enabled front-end, says Kronauer. "Because it has a built-in Web kernel, you can manage it from anywhere in the world."
In a future version of the product, Axis intends to mix fixed hard drives with the 2GB Jaz drives in the same tower with the same IP address. "With such a product," says Kronauer, "you can do backup from your hard drive that`s inside the box to your Jaz drive and archive it."
Charles T. Clark is a freelance writer in Haverhill, MA.