After 9 years and $100,000,000, holographic storage pioneer InPhase Technologies has shut down without ever shipping a product. Their office building was also seized for non-payment of back taxes.
They assured me that the product would ship in May, 2008. It didn’t. Reportedly many employees took pay cuts – or no pay at all – to help keep the company going.
It is a sad and ignominious end to a brave technology experiment. And a warning to anyone trying to replace disk drives as random access storage.
The 40% problem
At a 40% annual capacity growth rate hard drives are difficult to catch. When InPhase started showing their initial prototype, 300 GB wasn’t much less than hard drives. But 3 years later 300 GB is less than 1/6th the capacity.
Nor was it very speedy: 20 MB/sec. You can do almost as well with a USB thumb drive.
InPhase planned to take the drives to 1.6 TB and 120 MB/sec. If they could ship that today, they’d have a competitive product.
In the meantime, cheap hard drives and cheaper hard drive docks make it easy to use bare drives for backup and data transfer. The market for 300 GB removable drives withered before it had a chance to grow.
As I wrote 4 years ago:
I love holographic technology and wish InPhase the best, but I don’t believe they have a viable business with their technology – yet. The problem: 3.5″ disk drives will reach 750GB by the end of this year with much faster transfer rates. InPhase’s 20 Mbps is only 2.5 million bytes per second or only 9GB per hour. It will take over 30 hours just to fill one disk! I predict that hard drives will still be more convenient and fairly cost-competitive than this promising new technology.
But keep at it guys. Lightning will strike if your investors are patient enough.
The StorageMojo take
The disk industry spends over $1B a year improving hard drives. Thousands of PhD scientists and engineers are busy researching drive problems.
That kind of momentum is hard for a startup to overcome. NAND flash did so only because it built a large business in mobile applications where disk drives couldn’t compete.
For a startup to succeed with optical storage they’ll need to:
- a) build a multi-billion dollar business where disks and now flash don’t compete, such as Blu-ray’s movie distribution, or
- b) start with a product that is 10x – 5 years – ahead of current disk drive capacity, and
- c) have a clear grasp of what continued 40% annual growth means for disk drive capacity pricing – and product delays.
There are several firms pushing optical storage forward. Blu-ray is the least ambitious – now that HD DVD is (almost) gone – and that huge investment is almost certain to have a negative ROI, even if 3D content succeeds in making it the preferred consumer physical medium.
Nor is the outlook for other optical drives promising. Like removable magnetic drives before them, they are being crushed by substitute technologies like USB flash drives, 2.5″ drives & drive docks and downloading and wireless networks.
With the InPhase demise we may never see holographic storage commercialized. Especially if disk vendors start building archive-quality disks.
Comments welcome, of course. I was rooting for InPhase’s success, to no avail. Another version of this post was published on my ZDnet blog.