Life At The Top Of The S-Curve

1. Life At The Top Of TheS-Curve Randy Rettberg

5. Example: Disk Density 2x / 12 mo MBytes / In2 Largest areal density achieved during year.

6. Example: Disk Costs 0.5x / 12mo Cents / MByte 2000: 75 GB / $400 2003: 200 GB / $250 2004 2000 1995

7. Moore’s Law (1979)

8. Limits to Moore’s Law?

9. Internet Growth (Hosts) ARPANET INTERNET

10. The Business Climate- 5 Great Years Sept 1999

11. The Business Climate- But not for drive vendors Seagate

12. Stages of the Growth Curve Fear Resignation Greed Love

13. Lots of Growth Curves Television E-cash Movies Images Mp3 Games Web Gopher, Archie Streams FTP Email Mag tape transfer Remote resource sharing Terminal access Terminal linking

14. Growth In Many Fields

15. Stunted Growth ?

16. Double-Digit Returns The Hard Way 2003 1995

17. What Happened? • It was never real – the bubble burst. • Just the normal business cycle. It will get better soon. • Gravity - What goes up must come down. • The Internet did not change everything. • 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.

19. 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?

20. Dow 1930 - 2003 1999 1966 1982 1942

21. 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 Open Escalations 22 700 20 600 18 16 500 14 HealthChecks Complete 400 12 10 300 8 200 6 4 100 2 0 0 7/99 1/00 7/00

24. Strategy 1 Grow out of it!

25. 3 Growth Laws 2x / 6-9 mo 2x / 12 mo Packets / Sec Bytes / In2 Transistors / In2 2x / 18 mo 2000

26. Storage Service Providers Storage Networks Arsenal Digital Solutions Storage Computer Storage Way

27. Networks for Storage iSCSI TCP / IP TCP / IP

28. Growing Pressure

29. Strategy 2 Politics! Don’t let them stop innovation!

30. 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. Still to come: Movies Television Telephone Money Security Telemetry “The Internet Changes Everything” 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.

38. 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 • Disruptive technologies were first developed within established firms • Marketing personnel then sought reactions from their lead customers • Established firms step up pace of sustaining technological development From The Innovator’s Dilemma, Christensen

40. Stages of Disruptive Innovation (cont.) • New companies were formed, and markets for the disruptive technologies were found by trial and error • The new companies moved up market • 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

42. 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 SyntheticBiology Computers

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.