This expensive little IBM drive is a hard drive, you buy one for $500, not a dozen.
David S,
Below is, IMFO (in my friggin' opinion), a very cogent post today from a very knowledgeable regular poster on the AOL Motley Fool Iomega board. This is a rather long post that discusses removable drive products in general. I feel that one can recognize where the little IBM drive you speak of fits in this overall discussion. The post initially addresses a "concern" if Jaz revenues were disappointing.
Here is the post:
<<Do you doubt that if Jaz product line revenues stumbled (or even stagnated) going forward, that this would not be a significant negative>>
LOL do you really think there is a better Jaz coming soon... like maybe the ORB?
One thing that gets overlooked/discounted way too much is reliability of removable hard drives.
Why doesn't every hard drive maker offer a removable?
As far as SYQT is concerned they never had much in the way of reliability, and still the sparQ drive was touted because of its price/size while no one in the professional markets opted for sparQ over JAZ...
sparQ sold at retail to people who didn't know any better, not that they didn't dent Jaz sales but they dented Jaz at retail to consumers who may have been better served to consider Zip over Jaz in the first place but bought a sparQ based exclusively on price... where are those users going to turn now? Will they abandon their sparQ (or SyJet) for a Jaz or a Zip when the time comes... which for most will be a decision they will have to make....
Jaz was never intended for the masses, it's a technology that needs to be treated with respect for what it is, i.e., fragile in that it needs to be handled with respect, where zip has a back pocket reputation.
Syquest marketing a hard drive for the masses did themselves in, they not only sold the drive at a loss to capture those sales but they got eaten alive with support costs because of 2 reasons, they used inferior quality parts and sold to users who didn't understand that they were not buying a zip like rough and rugged disk... Jaz is a niche product, and shouldn't be confused as a replacement for tape or as a bigger/better zip. I use Jaz as a hard drive extension and it serves that use well, but it's not a bigger/faster zip, that job is for the zip 250.
IBM or Seagate or any of the others don't make a removable hard drive because they know the issues with durability, and haven't found cost effective ways to make a reliable disk....Only IOM has succeeded, I find that interesting....
The world seems to think that anyone can make a Jaz killer simply by making it bigger and cheaper, but both of those qualities diminish reliability so much so that tech support costs quickly eat them alive... and just as important they attract the unwashed masses to buy based on price alone which puts drives into the hands of people who don't know how to care for them doubling (tripling?) the failure rates that may be expected otherwise...
A cheap removable hard drive may serve as a good backup device if it's handled with kid gloves but reality is that regular type computer users don't handle anything that way....
ORB is going to face these same issues, selling to people who don't know what they are buying who will then expect warranty repair/replacement when their disks and drives fail... how will Castlewood handle this having any hope of profit snatched out from under them? I have no idea and believe it is impossible in real life... ORB may seem to hold up in the lab well enough to convince management that it's reliable, while when it hits the field it
will be dropped, banged, shaken, have stuff spilled on it, be stored on a dusty shelf... and who knows what other abuses that will render the disks inaccessible. Castlewood will be obligated to eat the costs of repairs under warranty if, for no other reason, than the consumer is always right and he (the consumer) will forget that he ruined the disk through neglect or carelessness and swear up and down that it just failed all by itself.
In reality, these consumers needed to buy a zip in the first place, most if not all of the cheap ORB buyers will be suckered in on price/size like SparQ buyers before them by retailers who don't care what they sell beyond the commission or sales dollars represented. But ORB isn't here yet, and may never arrive, if it does make it to retail shelves we'll have something to debate, until then any speculation as to it's superiority/reliability is premature and the worst kind of FUD so I expect we'll hear a lot of it.
Anyway, comparing zip markets with Jaz is to misunderstand the technology and it's applications based on price/performance and durability issues. Iomega is the first/only removable disk maker to get it right. Going forward, if Jaz is to enter the lower cost markets it will do so by leveraging economy of scale not by using inferior components or media.... but Iomega has discontinued the 1Gb Jaz, why would they do that except to limit the market to one they can support profitably? I believe Iomega doesn't want Jaz in the hands of the masses, it's target is professional use and they are keeping it focused there.
In reality, most users don't need more than zip offers but there is always the "bigger is better" mentality which is a misrepresentation and persuades people to buy the wrong product for the wrong reasons. I guess we'll always be combating bad consumer choices.
We've seen a few attempts to make removables that compete with zip and Jaz but so far it's been more damaging to the competitors then it has been to Iomega. Why this is the case should be food for thought for the anti-Iomega crowd as well as for those pro-Iomega.
I get flamed here from time to time and recently have been put in the category of blind IOM booster, I'm sure both have their merit and I don't bitch about it because I was wrong about the speed which zip would penetrate the market, but I also believe with all the gusto I have ever had that zip is the right choice and, while slower than I would have expected, is moving decidedly in the right direction.
I marvel at the attempts by competitors to derail this market and am made more confident by their continued attempts to take market share by using misleading specs and confusion while they eat themselves alive selling drives at a loss. Imation is blind siding themselves completely and have somehow deluded themselves into believing that the 120Mb disks will sell at tie ratios anywhere near what zip has achieved and built on since day one. I hope someone pins them down in one of their quarterly conference calls to spell out what their tie ratio is, I would make a large wager that it is close to 1:1 and that no matter how many drives they manage to sell will never climb much above that. My reasoning is simple....they don't understand the emerging market for removable media and won't ever see it. They are trying to see the future in their past experience with 1.44Mb floppies and so are working with obsolete and flawed information.
It's a simple formula, Zip embraces the future while the others cling to the past. Jaz understands it's market and has achieved reliability to serve it well while sparQ and ORB are missing the target by aiming in the wrong direction.
People can be fooled for a while and Imation can give OEM's deals that are impossible to refuse but in the end they are in an untenable position.
The formula for success isn't bigger is better and it doesn't have any ingredients from the 1.44 era... The recipe needs to consist of: simple to maintain, cheap enough, just the right size and super durable so it can take the abuse of day to day life...
It's too late to stop Zip and Jaz from owning their markets, slowly the wanna-be's will have to concede this and back down at least enough to quit throwing good money after bad. It's business, and stock holders will put increasing pressure on these companies to pursue profitable endeavors.
I realize it's too early to say (here) that IOM has a Microsoft like lock on it's market but they do.... IMN is what DR-DOS and Geoworks were to MS-DOS and Windows, look into how both of those battles for market share proceeded and see if you agree.
The FUD is understandable, the prize is billions upon billions of dollars in sales and profits. Advantage....Iomega because they are really a media company not a drive maker, but that won't be clear to analysts or skeptics until the licensees take over the lions share of the low margin/high volume drive business.
We'll know soon...meanwhile all that really matters is disk sales... if IOM sells 20mm disks in Q4 I think a lot of serious attention will be given to this company and it's long-term potential to dominate it's market and grow eps at ever increasing rates.
The longer the FUD lasts and the louder it gets are clear signs of just how big the opportunity is.
It's more entertaining than any other investment I've ever had, and if Xxxxx thinks he's fooling anyone more power to him, I think his motive is clear and has LS-120 written all over it. I don't begrudge him his place here but I think he will be gone before me.
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A footnote to the above:
FWIW, for high-end large backups I bought a Jaz drive because I wanted something reliable.
Dave
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