In the Irvine Spectrum Business Park, Pinnacle Micro Inc.'s two-story building looks up to Western Digital Corp.'s 14-story headquarters like David looked up to mighty Goliath.
Barely a stone’s throw apart, these computer storage companies have lived in peaceful coexistence for years, because a technological wall separated their industries. But with the advent of multimedia technology--where computers combine sound, text, graphics and video to produce film-like images--the neighbors may soon become adversaries.
Pinnacle, a maker of optical storage devices begun by a father-and-son team in 1987, senses an opportunity and is readying its slingshot. Western Digital, an established maker of magnetic disk drives with $1.2 billion in annual sales, said it is not worried that it will suffer Goliath’s fate.
Each company’s products perform the same basic function: storing computer data. Whichever can do that better at the best price will have a future; the other may be left spinning in the dustbin of history.
“We have a lot of skeptics out there,” said Scott Blum, who co-founded Pinnacle Micro Inc. with his father, Bill.
“Our belief is that optical disks will be around 30 years from now and magnetic won’t exist,” said the younger Blum, who serves as executive vice president. “This is what we’ve worked on for seven years. It’s David versus Goliath.”
At stake for the winner is a share of the multibillion-dollar storage industry, where demand is expected to explode with the fast-approaching information superhighway’s vast appetite for data storage.
Not every computer user cares who survives this battle. However, it matters to tens of thousands of workers--from engineers to assembly line workers--who make their living in the PC storage industry, which so far has remained largely American-owned despite strategic efforts by foreigners to grab a foothold.
The $700-million optical disk-drive industry is puny next to the $8.3 billion spent on magnetic hard disk drives each year, based on estimates by market researchers Disk/Trend Inc. in Mountain View, Calif., and Freeman Associates Inc. in Santa Barbara. The size of the magnetic disk drive industry mushrooms to $23.6 billion when sales of stand-alone drives are included, in addition to those sold as part of computers.
It will be difficult to mount a serious challenge to the magnetic disk drive manufacturers, who grew on the enormous success of the personal computer. The disk drive serves as the permanent memory system for the PC.
But Pinnacle’s executives believe business and home users will eventually favor their type of storage system, which is expected to undergo a major enhancement next year, while rivals run into technological obstacles.
Scott Blum said Pinnacle is set to release its enhancement project, code-named Diablo, in the spring of 1995. For the first time, he said, an optical disk drive will cross a threshold and cost less than similar high-capacity magnetic disk drives.
Blum, 30, said Diablo will force magnetic drive makers to take notice. Pinnacle’s best drives are priced at $3.80 per megabyte, compared to 75 cents per megabyte for standard magnetic drives, but with Diablo, the company hopes to greatly reduce the price gap.
Executives at the magnetic hard disk companies dismiss such claims as extreme optimism.
“The epitaph of the disk drive industry was written in the mid-1980s when optical first appeared,” said Peter Knight, vice president of business development at Conner Peripherals Inc. in San Jose, a top disk drive maker. “Many theorists stood up and talked about how the fundamental limit of the disk drive was coming. I thought optical would be a serious challenger. As time goes on, it’s clear that isn’t the case.”
Gary Marks, vice president of marketing at Western Digital, believes optical drives will remain but a small part of the total storage market.
“We don’t have tunnel vision,” Marks said. “There will be peaceful coexistence between hard disks and optical for a long time.”
Marks’ view is shared by industry experts such as Bob Katzive, a vice president at Disk/Trend Inc., and Phil Devin, storage analyst for Dataquest Inc., a market researcher in San Jose.
“We don’t see optical drives as a replacement for the magnetic hard disk,” Katzive said. “They’re good for storing things as archives. But if you need to (change) it fast, the hard disk drive is better.”
Basically, an optical drive uses a laser to read bumps and grooves on a metal platter, like a compact disc player. In magnetic disks, a mechanical head reads the magnetic pattern on the metal disk.
In both technologies, the disks spin past a head, which reads the data or changes it based on commands from the computer’s main processor. Optical drives are a newer and fundamentally more complex technology because they use lasers to read the data.
This ability to alter or “write” on the disk quickly is key to a disk drive system, but for optical drives, it is still too slow and expensive--which puts their manufacturers at a disadvantage.
“I think read/write optical is a ways off,” said Charles Haggerty, chief executive of Western Digital. “Going forward for at least four to five years, magnetic is going to be the way to go.”
But Bill Blum, 59, stresses that “rewriteable” optical technology--which allows data to be repeatedly recorded and erased--has been on the market for only four years, compared to more than a decade for magnetic.
“We can put more information per square inch (of disk) than them, and we just started,” Scott Blum said. “They’re pushing the limits. We’re just beginning to make advances.”
And it is next to impossible to forecast the best technology for the future based on those that prevail today, said Bob Abraham, vice president of Freeman Associates.
“No one really knows where the physical limits are,” Abraham said.
Technological advance is a game of numbers. If Pinnacle improves its optical technology faster than competing magnetic disk drive companies, then it will gain ground in sales. Speed, capacity and price matter the most. Analysts, however, say that optical technology is behind on every front.
Pinnacle had about $39 million in sales last year. With barely 100 employees, it competes against Japanese rivals including Sony Corp., Panasonic and Olympus. Its principal customers are businesses that have huge archives, especially defense companies.
Growth for optical companies has been slow but steady over the last few years, for which the Blum family said it is thankful.
“We would have been wiped out by big companies coming into the market,” Scott Blum said. “Now we’ve had a chance to establish ourselves.”
The next step for Pinnacle is to overcome the challenges optical drive makers face, which include developing better lasers that can read data squeezed into ever tighter spaces on a disk. It must build its drives in smaller packages to match the size standard of magnetic disk drives. It must also improve its “write” speeds, or the time it takes to record data, several times over to catch up with magnetic drives.
Much of this advancement depends on how quickly new laser heads are developed, and Pinnacle is dependent on the Japanese companies that manufacture them.
Considering the obstacles, some optical players have simply decided not to directly challenge their magnetic hard disk rivals.
“We don’t think there will be a war between the two technologies,” said Jim Kaufmann, vice president of sales and marketing for Most Inc., a Cypress-based optical storage company partly owned by Nakamichi Corp. in Tokyo. “It’s important for optical not to take the hard disk drive guys on head-on because they are continually making performance improvements.”
That is certainly the case at Western Digital, which is one of the world’s five top makers of magnetic drives. It has 6,375 employees on three continents and is considered a global technology leader.
Western Digital has doubled the capacity of its hard disk drives every 16 months. Marc Nussbaum, vice president of engineering for Western Digital, says there is no foreseeable “brick wall” to such advances. In fact, a new technology expected to be on the market in 1995--magnetic resistive heads--will virtually quadruple capacity on magnetic disk drives.
And last year Western Digital established a new standard for magnetic hard disk drives--dubbed the enhanced intelligent drive interface--to accommodate ever higher storage levels.
While typical drives today store a maximum of 528 megabytes--equal to about 264,000 typewritten pages--future ones could hold 10 times as much, thanks in part to the new technology standard, Nussbaum said. This could make magnetic technology competitive for years and therefore pave Western Digital’s on-ramp to the information superhighway.
The unanswered question is when magnetic drive makers will max out in their ability to stretch capacity.
“Sooner or later there will be a limit for magnetic,” said Peter Rentzepis, a chemistry professor at UC Irvine who is working on an $18-million project to develop an optical drive of the future. “The only way to overcome it is with optical. How soon? I cannot say.”
A competitive advantage for optical is that the disks are removable. You can pop out one disk and put in another. That means that while it costs three times more to purchase an optical drive, it costs little to add more disks to increase the total capacity.
In March, Pinnacle introduced its Orray optical disk drive, a $14,995 model aimed at the high end of the magnetic market, a niche known as disk arrays that bundle a dozen disk drives together to achieve massive storage, safe from accidental loss. It can store 5.2 gigabytes of data, enough to hold a library of books in electronic form.
“This makes a dent in the magnetic disk drive’s armor,” Scott Blum said.
“You won’t be able to see that dent with a magnifying glass,” countered Amyl Ahola, vice president of worldwide marketing for Seagate Technology Corp. The Scotts Valley, Calif., company is the world’s largest maker of magnetic disk drives. “For optical, they’ve always been two years away from a breakthrough for 20 years. I see them as complementary technology, but not a rival.”
Pros and Cons
* It takes longer for an optical disk to write data. But magnetic and optical drives have comparable speed in accessing recorded data.
* Optical disks are not affected by airport X-ray machines or other magnetic sources.
* Optical cartridges allow large amounts of data to be transported with ease to another site, such as a locked safe for security purposes.
* Large-volume users can build a library of optical cartridges at less cost, increasing storage capacity without purchasing another hard drive. Cartridges hold up to 1.3 gigabytes. Optical disks are guaranteed for 30 years.
* Magnetic drives are less expensive, making them more cost-effective for low-capacity uses. Average drive has 20 megabytes to two gigabytes.
* Optical drives may be particularly useful for desktop publishing, digital video or audio applications, which typically require large amounts of storage space. Example: One movie requires two gigabytes of space.
* Optical drives are read by a laser beam rather than a magnetic head, which can “crash” into disk and destroy data.
Researched by JANICE L. JONES / Los Angeles Times
How Optical Drive Works
These drives incorporate a laser and are used for storing large volumes of data. The laser’s narrow beam can write more data in less space than the magnetic drive.
Writing data 1. Laser heats a spot; alloy layer crystallizes into loose particles. 2. Write head passes over the revolving disk, creating a magnetic field that aligns the crystal particles according to positive or negative polarities, representing the binary language of computers, which is based on a system of zeros and ones.
Reading data 1. A second, weaker laser reflects off of aluminum surface. As beam passes through alloy, crystallized particles polarize the light. 2. Sensor receives polarized light and reads its binary code.
How Magnetic Drive Works
Magnetic drives are standard in desktops, but are also used in supercomputers.
Writing data 1. Read/write head passes over revolving disk. 2. While passing under read/write head, particles are organized into magnetic bands according to their positive and negative polarities.
Reading data 1. Iron particles create a magnetic field, generating a current through the coil. 2. Computer “reads” direction of current and interprets its binary code.
Sources: “How Computers Work” by Ron White, Times reports; Researched by JANICE L. JONES / Los Angeles Times