Monday, February 16, 2009

Why the consumer needs more storage.

For many years I have been involved in the data storage business but I have been data center centric giving the small business, or home requirements scant to zero attention.

Two events happened this year that woke me up from this indolent stupor. The first was listening to EMC at their analyst days as they laid out their plans for a future in the consumer based storage market with their recent acquisition of Iomega being the catalyst. Having experienced the trauma of trying to implement ill conceived acquisition strategies I was skeptical and wondered what the EMC strategists were smoking when they came up with what I considered to be an aberrant idea taking this leader in enterprise storage into the murky and potentially dilutive atmosphere of consumer sales.

The second event was a trip to Storage Visions, an eight year old conferenced focused on consumer and media and entertainment storage and has established a niche as a preamble to CES. Following the education I received on the explosive consumer storage market I stood somewhat chagrined at doubting the wisdom of EMC and the sanity of their strategists. However, I do say somewhat and will defend myself by holding final judgment until we can see how effective they are in implementing their consumer plans.

Storage Visions was an eye opener, particularly Tom Coughlin’s prediction and analysis of this developing and growing storage niche. Funnily, I found the conversations that glibly referenced PB of home based storage bit disconcerting and is one those consequences of the changing nature of data and the consumer’s propensity to create and store increasing volumes of data.

So why do people need more storage?

The growing trend is to keep a digital life of ourselves and our family. This digital content is the legacy we leave to our descendants – let us hope they are interested.
The digital world is becoming increasingly simplified. Digital technologies are enabling new ways to create, store, share and use content.
The need for data storage is becoming increasingly pervasive in our everyday tools, digital cameras, multi featured cell phones, MP3 players, iPhone, Blackberry etc. The ease with which data can be created by the consumer (user generated growth) is the driver of data growth and data storage

The following data is from the Consumer Survey on Digital Storage in Consumer Electronics, published by the Coughlin Associates, Jan 2008 and was a definitive data source referenced in many of the vendor presentation at the conference.

Data storage in the home:

Segment:................2006...2007...2008...2009...2010...2011...2012...2013
Personal Data.............22......34........51.......72.......99.....132......171.....214
Retail Home Video....324.....417......522.....637.....770....945......183...1502
Gaming.......................12......29........52.......83.....127.....187......270...384
Home Back-up............32......98.......195.....333....532....781....1254...1020
Home entertainment..192....435......760....1240...1941..2759....3720..4835

Table 1: Table illustrates the projected growth in accumulated data that can be expected in an average but digitally active household. Numbers shown are in GB’s.

Storage shipments for the consumer:

By 2013 over 600 Exabytes of storage will be shipped for CE applications

Technology...........2005...2006...2007...2008...2009...2010...2011...2012...2013
ODD.........................4.........6.......17.......33.......62.......94.....116......176......196
HDD.........................2.........5........8.......16........35.......61.....106.....186......301
NAND......................0..........1........2........5........12.......27.......52.......90......159

Table 2: Exabyte’s shipped for consumer use. Optical, hard disk and flash memory

Although the survey was conducted 12 months ago when the climate was a bit more buoyant the consumer digital revolution is well underway and while absolute values may be suppressed storage growth will continue.

So if these numbers are to be believed, perhaps the EMC strategy of establishing a beachhead in the consumer market has more wisdom than I initially credited to them. But then again it is not the plan that is important but the success of the implementation.


Final thoughts:

  • Ease of creation, use and sharing means that more “stuff” will be stored.
  • New businesses centered on data content will develop and will become major market opportunities. A reality that I am sure has not been missed by EMC.
  • Storage demand is elastic; if the cost is right and it is affordable people will buy. This conclusion is equally relevant in the data center. The relationship to cost and resource use was addressed in my article on the Jevons Paradox.
  • User generated content is increasing dramatically and it is projected to become greater than commercially generated data by the end of the decade.
  • Coughlin captured the essence of the morphing of the data storage demand with the following
    .........A terabyte in the pocket
    .........A Petabyte in your home
    .........Exabytes in the data center
    .........Zetabytes in the world
  • There is a healthy long term outlook for the storage vendors. However, any optimism has to be tempered with the increasing complexity of the storage marketplace and vendors ability to exploit the evolving opportunities. EMC have made a bold decision and time will tell if they can realize meaningful profitability in the distinctly different world of consumer sales.

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