Fighting rear-guard marketing actions – protecting a declining product or technology to keep the high-margin revenue coming in – isn’t much fun, but it sure is profitable. Especially in an area as conservative as storage. So it is a big deal when someone quits trying.

Which is why I’m so [shocked/surprised/pleased] to see Gudmundur Einarsson, CEO of Tandberg Data face reality and admit the facts in a press release:

“Using RDX QuikStor, organisations that currently rely on tape to protect, archive and interchange their data, will benefit from enhanced performance, instant random access, high reliability and, most importantly for small businesses, a lower cost than competing low-end tape solutions. . . . ”

Low-end RDX product – but can the high-end be far behind?
The RDX product packages cheap, 4200 RPM, 2.5″ disks in what T’berg calls a rugged, shockproof cartridge with a 10 year life in 40, 80 and 120 GB sizes. The unit starts at about $300, so the margins look good for T’berg and the resellers should be able to move lots to the SOHO and SMB markets.

Calling high-end tape vendors
Tandberg stresses that the RDX is a low-end system. Yet people have been predicting for years that disk would overtake tape. How close are we? As the table shows, pretty darn close.

Capacity (GB)
Street Cost
SuperDLT IV Tape 300 ~$85 $0.28
SATA Disk 300 ~$100 $0.33
LTO Ultrium 3 Tape 400 ~$60 $0.15
SATA Disk 400 ~$160 $0.40

Alert readers will notice that DLT is much costlier than LTO, reflecting the premium tape cost that includes Quantum’s lucrative licensing fee and the inability of an aging architecture to keep up with the newer LTO. Which is why DLT is well on its way to that big archive in the sky.

I’ve also left some signifcant costs out. To put an HDD in a removable enclosure runs about $40, quantity 1. And I’ve left out the cost of the tape drive, which for these top of the line Ultrium 3 starts north of $2,000. Also, I don’t take into account the 2:1 compression manufacturers commonly assume, and that customers may or may not see.

The take
At the rate disk prices drop, this picture will look very different in 6 months, when the 1 TB drives are shipping and the industry shift to perpendicular recording is complete. And if the folks trading at Storage Markets are correct that we will see GB price parity next year, then 2.5″ will become very attractive as a backup medium when properly packaged and priced. The tape business is beginning to unwind, and while it won’t go away any time soon at the high-end, it brings almost nothing to the SOHO and SMB market space.

Expect to see the D2D data reduction companies do very well over the next three years.

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