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Not that we need it, but we are about to enter another performance war.
Certainly this should come as no surprise. Weve had platform fights, processor fights, graphics fights and even memory fights (remember Rambus?), so another active battle shouldnt even give us pause. But whether or not we are ready, we are about to re-enter the performance fight for hard drives. The contenders are Hitachi Ltd., which recently purchased IBMs drive business, and Western Digital Corp.
I drove by the old IBM storage facility where I used to work and had to admit it was really strange to see the Hitachi name on the security gate. Remembering a few decades ago how we were all convinced that a Japanese company was going to take IBM out after the IBM consent decree with the U.S. government, this was kind of a creepy déjà-vu feeling.
Still, Hitachi has entered the hard drive market with a vengeance. Its initial price drop on the old Micro Drive, which had been languishing under IBMs care, created Apple Computer Inc.s new Mini-iPod and helped Apple make a big splash in what otherwise would have been a dull month for that segment. Hitachi has been cutting prices across most of the lines and has been taking the fight to Maxtor Corp., which, up until recently, owned the value segment for drives. Not satisfied with this, the company now appears to be planning to go after the performance segment currently owned by Western Digital.
Next page: Why Western Digital drives are so fast.
Western Digital kicks butt
Why Western Digital Kicks Butt. What makes Western Digitals Raptor drives so fast is a combination of speed—10,000 rpm—cache and unique technology. This line, currently in 74 and 36GB sizes, spec with an access time of 4.5 ms, which, typically, using workstation benchmarks, toasts comparable SCSI 10,000 rpm products. It has a whopping 8MB buffer and a unique technology that actually monitors vibration and adjusts the drive to minimize it. This last is important in RAID configurations, which are standard in servers and becoming more and more common in desktop systems. The parts cost is around $100 for the 36GB drive and about $200 for the 72GB drive, which is very aggressive for a drive in this class.
Currently, if you are buying a performance PC, this is the drive to specify, and it is common to see it in benchmark systems from Intel Corp. and Advanced Micro Devices Inc. It is simply the fastest desktop drive on the market today, by a considerable margin.
Hitachi Isnt There Yet. The Hitachi 10,000 products, right now, are still SCSI. They can match on rpm and are just slightly slower on access times, but the Raptors are still faster. Hitachi does, however, have 15,000 rpm products that are faster. Unfortunately, they cost $485 for 74MB, which is way too much for desktop use. This means that Hitachi has the capability to compete here as well and clearly is executing on a low-margin market-share growth strategy overall, meaning the company is looking at every hard drive vendor as an opportunity to take share.
Currently Hitachi Ultrastar 10,000 SCSI products are still based on the old IBM pricing and are priced at a premium over Western Digitals SATA offerings. Its nearly a 2x premium, which makes the Western Digital drive a bargain. However, as we have seen in the other segments, Hitachi will probably adjust prices down sharply as the company brings its own high-performance SATA drives to market, and then well have a race. For now, Western Digital is chewing up Hitachi on both price and performance, but I doubt its resting easy knowing that Hitachi is coming with a vengeance.
Next page: How the fights shaping up.
The emerging fight
The Emerging Fight. While I expect to see Hitachi give Western Digital a run for its money on price, in terms of performance, I expect Western Digital to hold on unless Hitachi can enter with an aggressively priced 15,000 rpm SATA product. If it does that, which is somewhat unlikely, all bets are off, and this will really get bloody.
This means another price war is about to start on a significant component for high-performance workstation, server and desktop computing. Price wars mean lower prices, and the more drives your implementation needs, the more savings you are likely to get. This latest hard drive price war, which is ongoing in the general desktop segment, will emerge in the second half of the year and help hold down prices as we move to the next-generation AMD and Intel platforms. With product shortages causing some component prices to creep up, these price wars should offset—and hopefully hold—system prices flat. And that is likely as good as it will get this year.
Rob Enderle is the principal analyst for the Enderle Group, a company specializing in emerging personal technology.