Avoiding Potential Risk of Stagnation in the Secondary Storage Market

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By Guest Blogger Peter Faulhaber, former president and CEO, FUJIFILM Recording Media U.S.A., Inc.

The Hyperscale Data Center (HSDC) secondary storage market is quickly emerging, requiring advanced solutions for petascale and exascale storage systems, not currently available. According to HORISON Information Strategies, HSDCs currently use around 3% of the world’s electrical energy. Due to the massive energy footprint of HSDCs, climate protection measures have become increasingly important in recent years, with cloud computing offering the greatest advantages for sustainable operation by reducing the energy and carbon footprint over the entire data life cycle.

The slowing rate of HDD and tape technology development roadmaps in recent years, along with HDD and tape storage supplier consolidations are particularly concerning trends to HSDCs. Neither HDD nor tape technology is currently positioned by itself to effectively meet the enormous HSDC storage requirements that future performance and capacity demands. High technical asset specificity requires significant R&D investment, yet have limited ROI potential outside of hyperscalers.

HSDCs manage over 60% of the world’s data today with a CAGR of 35 – 40%, with a growing need for cost-effective secondary storage that still meets certain performance thresholds.

The vendors and manufacturers are dis-incentivized to invest in novel technology; the risk reward is not high enough, while HSDCs are leveraging their buying and bargaining power. Manufacturers need to invest hundreds of millions to bring innovative solutions to market in a long development cycle, without a commitment from the HSDC market.

As a result, the secondary storage market is left with incremental investments in existing technologies and moves slowly.

The conditions are set for a widening gap between customer demands and product solutions in the secondary storage market.

The current “vendor-driven” strategy will not keep pace with HSDC requirements for secondary storage as such offerings fall far behind HSDC curves. Photonics, DNA, glass, and holographic experiments are attempting to address the market, and have been in labs for decades, but most have drawbacks, and none are on the near-term horizon for customer deployment. These initiatives show that a change is needed to get ahead of the demand curve.

However, the opportunity also exists to mitigate this risk by bringing the interested parties together  to share the risk reward paradigm. HSDCs need a quantum leap, which only comes with significant investment, best shared by the interested parties.

The Semiconductor Research Corporation (SRC) addressed the concept  of vertical market failure in September 2021 in its published article “New Trajectories for Memory and Storage,” stating, “The prospect of vertical market failure can be mitigated by private sector market participants through risk-share agreements between customers and suppliers, as well as increased vertical integration.”

Without change, current technologies will fall far behind HSDC demand curves, and the current vendor-driven trajectory increases the likelihood of un-met demand and stagnation of growth for all involved.

 

Rich Gadomski

Head of Tape Evangelism

As Head of Tape Evangelism for FUJIFILM Recording Media U.S.A., Inc., Rich is responsible for driving industry awareness and end user understanding of the purpose and value proposition of modern tape technology. Rich joined Fujifilm in 2003 as Director of Product Management, Computer Products Division, where he oversaw marketing of optical, magnetic, and flash storage products.

Previously Rich held the position of Vice President of Marketing, Commercial Products, where he was responsible for the marketing of data storage products, value added services and solutions.

Rich has more than 30 years of experience in the data storage industry. Before joining Fujifilm, Rich was Director of Marketing for Maxell Corp. of America where he was responsible for the marketing of data storage products. Prior to that, Rich worked for the Recording Media Products Division of Sony Electronics.

Rich participates in several industry trade associations including the Active Archive Alliance, the Linear Tape-Open Consortium (LTO) and the Tape Storage Council. Rich also manages Fujifilm’s annual Global IT Executive Summit.

Rich holds a BA from the University of Richmond and an MBA from Fordham University.

FUJIFILM Recording Media U.S.A., Inc., is the leading manufacturer of commercial data tape products for enterprise and midrange backup and archival applications and provides long term data storage products and software through its FUJIFILM Data Management Solutions team.