Life At The Top Of TheS-Curve

Randy Rettberg

2

3

4

5

1

10

100

1,000

10,000

100,000

1970 1980 1990 2000

Example: Disk Density

2x / 12 moM

Byt

es

/ In

2

Largest areal density achieved during year.

6

Example: Disk Costs

0.01

0.1

1

10

100

1995 1997 1999 2001 2003

Cents / MByte

1995 2000 2004

0.5x / 12mo

2000: 75 GB / $4002003: 200 GB / $250

7

Moore’s Law (1979)

8

Limits to Moore’s Law?

9

Internet Growth (Hosts)

10

100

1,000

10,000

100,000

1,000,000

10,000,000

100,000,000

1970 1975 1980 1985 1990 1995 2000

ARPANET

INTERNET

10

The Business Climate- 5 Great Years

0.1

1

10

100

1 4 7 10 13 16 19 22 25 28 31 34 37 40 43 46 49 52 55 58 61

AOL EMC

SUNW CSCO

NASDAQ

Sept 1999

11

The Business Climate- But not for drive vendors

0.1

1

10

1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61

NASDAQ HDD

MXTR STK

WDC Seagate

12

Stages of the Growth Curve

Love

Greed

FearFear

Resignation

13

Lots of Growth Curves

Mag tape transferRemote resource sharingTerminal accessTerminal linking

FTPEmail

WebGopher, ArchieStreams

ImagesMp3Games

TelevisionE-cashMovies

14

Growth In Many Fields

15

Stunted Growth

?

16

Double-Digit Returns The Hard Way

0.1

1.0

10.0

100.0

NASDAQ SUN

CSCO EMC

MSFT IBM

1995

2003

17

What Happened?

1. It was never real – the bubble burst.

2. Just the normal business cycle. It will get better soon.

3. Gravity - What goes up must come down.

4. The Internet did not change everything.

5. It was Y2K after all.

18

Or How About:

• We got more technology than we wanted.– How fast is the CPU in your computer?

– Way too much dark fiber?

– How do you fill a 200 GB disk?

• Monopolization did stifle innovation.

• Napster lost.

• Copyright went wrong, blocking the media revolution.

• We got picture cell phones instead of phonecalls over the Internet.

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Life at the Top of the S-Curve

• It might last a long time

• It might not be fun

• It might slow everything else

• Where shall we look?

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Dow 1930 - 2003

10

100

1,000

10,000

100,000

1966 1982

1999

1942

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Life at the Top of the S-Curve

• It might last a long time

• It might not be fun

• It might slow everything else

• Non-technical issues dominate

22

Storage Practice and Customer Care

23

Sun Micro HealthCheck

0

2

4

6

8

10

12

14

16

18

20

22

7/99 1/00 7/00

Hea

lth

Ch

ecks

Co

mp

lete

OpenEscalations

0

100

200

300

400

500

600

700

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Strategy 1

Grow out of it!

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1

10

100

1000

10000

100000

1 2 3 4 5 6 7 8

3 Growth Laws

2x / 6-9 mo

2x / 12 mo

2x / 18 mo

Packets / Sec

Bytes / In2

Transistors / In2

2000

26

Storage Service Providers

Arsenal Digital SolutionsStorage Networks

Storage ComputerStorage Way

27

TCP / IP

Networks for Storage

iSCSI

TCP / IP

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Growing Pressure

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Strategy 2

Politics!

Don’t let them stop innovation!

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Media As An Example

• Napster case cut growth of mp3– Less demand for mp3 players

– Less demand for audio In/Out

– Less demand for E-cash to pay for music

• DMCA – Copyright gone wrong– Uncertainty for media investors

– Uncertainty for broadband deployment

– Uncertainty for computer hardware

Remember that CD adoption was driven by “oldies”

31

Less Obvious Blocks

• No e-money – Banks and Credit Card Laws (Factoring)

• No phone calls – Telephone industry

• No security – National cryptography policy and terrorism

32

Strategy 3

Go sideways!

33

Computer/Communications Revolution

2100 - Nanotechnology

2050 - Internet Reaches Ubiquity

2000 – Y2K Averted

1970 - Internet Created

1945 - Computers Created

1900 - Electric Lighting

1800 - Industrial Revolution

1500 - Renaissance

1000 - Middle Ages (Nothing Happens)

0 - Roman Empire

34

“The Internet Changes Everything”

Still to come:

• Movies

• Television

• Telephone

• Money

• Security

• Telemetry

Where are they?

35

A Sideways Approach

• Connect everything to the Internet.

• What are the protocols?

• Functionally distributed intelligenceinstead of central intelligence.

• Replace analog audio, video, IR control, RF control, RS-232, with Internet.

• Who is in control? Everybody!

36

Sideways At Sun

• End-to-end checksums

• Less virtualization not more

• Non-volatile write buffer

• IDE Disks

– 2.5 times less expensive at same capacity, same RPM

– 3.5 times less expensive at same capacity, 2/3 RPM

– Less firmware

– No disk-to-disk interconnect

37

Strategy 4:Understand The

Innovator’s Dilemma.

The Innovator’s Dilemma, When New Technologies Cause Great Firms to Fail, Clayton Christensen, 1997.

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Principles of Disruptive Innovation

• Customers and investors determine allocation of resources

• Small Markets don’t solve the growth needs of large companies

• Markets that don’t exist can’t be analyzed

• Technology supply may exceed market demand

From The Innovator’s Dilemma, Christensen

39

Stages of Disruptive Innovation

1. Disruptive technologies were first developed within established firms

2. Marketing personnel then sought reactions from their lead customers

3. Established firms step up pace of sustaining technological development

From The Innovator’s Dilemma, Christensen

40

Stages of Disruptive Innovation (cont.)

4. New companies were formed, and markets for the disruptive technologies were found by trial and error

5. The new companies moved up market

6. Established firms belatedly jumped on the bandwagon to defend their customer base

From The Innovator’s Dilemma, Christensen

41

The Answer

Give responsibility for disruptive technologies to

organizations whose customers need them.

From The Innovator’s Dilemma, Christensen

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Strategy 5Listen to the young.

• The innovator’s dilemma applies everywhere.

• Early retirement is sweeping the industry

43

Strategy 6Bootstrap Companies

• Government funding

• Consulting and support

• Grow at the same rate as your market

• Reduced expectations for capital

• Keep it simple

• Own your business

44

Strategy 7Join a New Curve

ComputersComputers

SyntheticSyntheticBiologyBiology

45

Homework

• Don’t believe what industry leaders say. They don’t know.

• Target new technologies at new markets.

• The weaknesses of disruptive technologies are their strengths.

• Use the growth curves.• Examine the unexamined. Do the

unexpected.