Clouds? Or silver linings?

HAL: Mark, what do you see on the horizon for 2002?

MARK: With any good luck, an easing in the economic climate.

HAL: Just in the U.S. or in the rest of the world too?

MARK: I've been following the U.S. economy more consistently, but I don't think the Japanese economy will recover until ours does.

HAL: Will that put the kibosh on R&D?

MARK: Not if senior management is smart. I've always thought it strange that their marketing people can't find ways to turn times of economic downturn to their companies' advantage. It's like a turtle.

HAL: Huh?

MARK: While many companies pull their heads into their shells, the ones who are willing to stick their necks out will be the winners.

HAL: Or, alternatively, they're the protein in a turtle soup.

MARK: Well ...

HAL: I see some interesting products coming out this year.

MARK: What's caught your eye?

HAL: I'm impressed by the combination of DVD-writer and CD-writer that Pioneer and LaCie and others are releasing.

MARK: They write DVDs in the DVD-RW format, right?

HAL: Yup. And they've got a growing Recordable DVD Council behind them. There are 83 companies in that organization, now.

MARK: I met some of those folks at Comdex, last fall, and they're evidently going to be aggressive in marketing the formats that the old DVD Forum had approved.

HAL: Which are: write-once DVD-R, and rewritable DVD-RW and DVD-RAM. But not "plus-RW." I think that argues poorly for the "+RW" format.

MARK: Maybe you'd better wait until the +RW camp actually gets some orders, before you polish your crystal ball.

HAL: All right. Let's look at connectivity. What's your take on InfiniBand? Is that going to make a splash this year?

MARK: I think it'll begin to. This is likely to be a very good year for "connectivity" in general. But InfiniBand will be more significant in the "clustering" universe than in the "storage" universe.

HAL: Explain, please.

MARK: It's cluster architectures, and clustered servers, that'll benefit from InfiniBand. We should also watch where Fibre Channel goes this year.

HAL: Which is where, do you think?

MARK: I see a surge in two-gigabit products. But the Fibre Channel developers and vendors will have to make some serious decisions about migrating up to ten-gigabit capabilities.

HAL: Faster is always better, isn't it?

MARK: Sure, but more costly, too. Keep in mind that Fibre Channel has never been inexpensive; and that the Fibre Channel people may feel their backs up against the wall when ten-gigabit Ethernet is released.

HAL: That might not happen until 2003.

MARK: True. But all the wrangling over the path from two to four to ten hasn't been resolved. The move to four-gigabit Fibre Channel would probably benefit the drive side of the equation more than the architectural side.

HAL: Our readers have contacted us, by the way, with comments about an earlier I/O, in which we wondered if it were possible to "have it all:" capacity, performance, and economy in a single drive. What they're saying is that the latest generation of IDE drives does do it all.

MARK: Although there'll always be people who think that "faster" and "cheaper" alone are better, and to heck with capacity. Also, one reader, who works for a drive manufacturer, liked our "cosmic joke" about zero margins in the drive business. In hindsight, I wish that joke were funnier.

HAL: How about in foresight? What's going to happen to margins this year?

MARK: I don't see an improvement. I really don't. We'll have higher capacities, and faster throughputs, but the competitive landscape just isn't going to change. Things may even get more tense, as integrators and OEMs look closer at ATA/IDE options.

HAL: I agree. They can supply SCSI-level performance at much lower prices.

MARK: Which is why Western Digital is doing better, now, than it has in recent years.

HAL: Making and selling drives seems like a tough business to be in. But let's see if our readers agree. If you see mostly clouds on the horizon, email me at [e-mail].

MARK: And if you see a silver lining in those clouds, email me at [e-mail].