Yogi;
<<Interesting how 1999 technological discussions can be influenced by monumental battles of World War II. Many analogies could be made to the Battle of Kursk. History can jump up and help you through the present if you learn the lessons of the past>>
The use of war as a business metaphor has been popular for a very long time. From Sun Tzu to Von Clausewicz to the machinations of Machiavelli, all have been embraced in the popular business press and the lecture rooms of great business schools. These lessons may be especially called to mind when thinking about our embattled disk drive companies. Lord knows they show a predilection for battering each other. It may be that thinking outside of this paradigm is what will offer greater returns in the long term, however.
As the industry hastens pell mell towards the theorized paramagnetic limit one has to wonder if we are not witnessing a noble engineering effort that ends in self immolation. To quote Linda Hunt's character in The Year of Living Dangerously while expressing Billy Kwan's deep disappointment over the failed promise of Sukarno: "What then must we do?"
Certainly we can readily see the military paradigm in the unprecedented decline in the basic price of disk drive storage. Even seasoned observers have been caught by surprise. Remember Jim Porter's prediction that we would see a few cents per megabyte by the end of the year 2000? He made that prediction in mid 1998 and by the end of that year we were already there.
I think it isn't enough to talk about the next improvement in areal densities. Dual-actuation, chip-on-suspension, track densities, et al, seem to lead us down the same old path. Nor is it enough to simply follow the street prices. All of this is important but what then?
The question, insofar as investment opportunity, IMO, is which of these companies, if any, are best prepared to exploit the incredible growth of demand for information management, storage, access, and fast, well packaged, delivery of the same.
Robert's belief in Seagate's war chest is appropriate, imo, not because we can conclude that Seagate has staying power to be the last man standing. I used to think so but now I believe that would be a hollow victory. What do you win if the earth is scorched and all the bridges have been burned and the only way forward is impeded by a huge wall labeled "paramagnetic limit"?
IBM has it's labs as does Fujitsu. Both have mega holdings in all kinds of technologies. Seagate on the other hand has stock holdings that have done awfully well of late. Again I will harken on something Robert said when he noted that holding Seagate is like investing in a mutual fund. I guess if we measure their performance against other mutual funds we could say they have done well. But it has not impacted the "net asset value" for shareholders all that much so the question is "when will it"?
IMO the end game isn't the best cost of goods sold with the highest areal density. The end game is really a re-invention problem.
All of the above is intended to stir some comments and thinking "outside the box".<G>
Best,
Stitch |
