Storage Markets claims to predict the future

By Ann Silverthorn

—Can a stock market model accurately predict storage market trends? Yes, according to John Ives, president of Storage Markets, and Rich Pappas, vice president, who believe a stock market model is not only accurate, but also is even more accurate than polls and surveys.

Storage Markets is a Web-based market-research tool that predicts technology trends for the data storage industry. Vendors pay Storage Markets to post a question as an IPO and storage professionals use "bits" instead of currency to bid on the likely outcome of the posted questions.

Do you think 3PAR, Acopia, Asigra, EqualLogic, GlassHouse, or Onaro will be acquired by year-end? When do you think 10,000rpm 2.5-inch disk drives and 15,000rpm 3.5-inch drives will reach cost parity when normalized by capacity? How soon do you think more storage systems will ship with iSCSI as opposed to Serial Attached SCSI (SAS) host-attached ports? These are just a few of the questions posted on Storage Markets.

"Prediction markets" started in the 1990s when the University of Iowa founded Iowa Electronic Markets, which are real-money futures markets where contract payoffs depend on economic and political events such as elections. The idea is that the collective intelligence of a group of people is more accurate than surveys, polls, or analysts' predictions.

"At storagemarkets.com, traders trade outcomes as if they're stocks. The price moves up and down, but they're betting on outcomes," says Pappas. "In the end, how that share price stabilizes reflects the probability that outcome will come true."

Pappas claims that Storage Markets' quantitative market research is more accurate and cheaper than traditional research. Its revenue comes from posting questions and the subsequent analysis it provides.

Currently, about 300 storage industry professionals and end users are trading on Storage Markets. Here are a few of the predictions traders were making last week:

  • Storage Markets traders believe that none of a list of selected companies, including 3PAR, Acopia, Asigra, EqualLogic, GlassHouse, and Onaro, will be purchased in 2006.
  • February 2007 is the month that traders believe 10K 2.5-inch and 15K 3.5-inch disk drives will reach cost parity when normalized by capacity.
  • The first 2.5-inch 4Gbps Fibre Channel disk drives will reach production in the first half of 2008.
  • It will be 2009 or later before 10Gbps iSCSI shipments will outship 8Gbps and 10Gbps Fibre Channel.
  • More storage systems will ship with iSCSI as opposed to Serial Attached SCSI (SAS) host-attached ports in 2008.
  • It will be 2011 or later before single networking architecture (data and storage) is deployed in 50% of systems shipped.
  • Data de-duplication will be an end-user requirement in more than 50% of new deployments sometime between now and the end of 2007.

For more predictions, go to www.storagemarkets.com.

This article was originally published on November 21, 2006