Here is a simple question:
- What is the business of Seagate and Western Digital?
If you confidently answered “Hard Drives!” you’d be wrong.
Unfortunately, it’s clear that both Seagate and Western Digital themselves define their business as the “hard drive” business. How short-sighted. It’s highly unlikely that I will continue to own a hard drive within 3-5 years. Neither will you. Within 10 years, it’s unlikely that anybody will be purchasing hard drives for any purpose.
Why? Because there will be better, faster, lower power consuming alternatives with no moving parts. These alternatives exist today. Flash comes to mind, but price has been a barrier. While flash memory capacity is doubling every 10 months, flash prices drop by half. Hard drives have had a good 50-year run and Seagate is clearly in the hard drive business. Even though it’s clear what the future holds, Seagate and Western Digital don’t seem to be making the right moves to position themselves appropriately to take advantage of the disruptive technology that awaits them.
If I owned any Seagate or Western Digital stock, I would dump it now.
Flash is a disruptive technology. It’s a lot like what motor boats were to sail ships in the 1800s. Motor boats could go much much faster, but they were relatively small and their range was extremely short. Sailboat makers thought they were in the sailboat business and completely ignored the motorboat business, seeing them as just a short-range toy. Of course, over time, motorboats became better and their range eventually had the ability to cross the Atlantic. As a result, none of the sailboat manufacturers of the time were able to survive this disruptive change while motorboat producers thrived.
The problem was that they were all in the transportation business, but they didn’t see it that way. The people purchasing sailboats didn’t care about sailboats. They cared about getting people and merchandise from point A to point B as quickly and economically as possible. Over time, motor boats did a much better job. Eventually, airplanes did a better job for carrying people and the transportation of people via motorboats business also died. Today’s cruise liners are in the entertainment business, not transportation.
There are, of course, numerous other examples. CDs to tapes, MP3s to CDs, DVDs to VHS, but for now, let’s get back to Seagate, hard drives and flash. So is the Hard Drive market slowly going to transition to the Flash market? The answer is no. The storage market will remain the storage market.
People in need of storing information digitally will store it wherever is most convenient, fast and economical. Sound familiar? Do you really care about hard drives or do you just want to store your files? If the web or Google could store your files as conveniently, fast and economically as a hard drive, that’s where you’d store your files. But before we get to web storage, Flash will beat Hard Drives. Hopefully Flash memory makers will not make the mistake of thinking they are in the Flash business. Eventually something like DNA-based storage (or something entirely different) will beat out flash. Anybody in the flash business will go out of business, but the storage business will continue to thrive and expand.
What Business Are You In?
If you are a Software Engineer, don’t call yourself a C# developer or a Java developer. That’s the equivalent of Seagate being in the hard drive business. What happens when nobody needs a Java or a C# developer anymore? If you think that can’t happen, just look at all the Cobol and Ada developers today. How many do you know?
The same applies to your business. It’s time to think long and hard about the business your company is in. At Axosoft, when I released OnTime V1.0, it was a bug tracking application. Most competing companies who create a bug tracking tool see themselves in the bug tracking business. Some venture to say it’s a project management tool. I’ve always viewed OnTime as a tool to help software teams ship software on-time and not as a bug tracking application.
That view has lead us to build requirements management, help desk and now wiki inside the same product. It’s now obvious that OnTime is not just a bug tracking tool, or just a project management tool, but a tool that helps software teams ship great software. The focus is on driving the team to ship.
When trying to determine the business you are in, think of the problem you are solving rather than the way in which you are solving it. If you make MP3 players, you’re in the portable entertainment business. MP3 just happens to be a short-term technology that delivers digital music in an efficient way, but eventually, there will be a better way to deliver portable entertainment and everybody who is in the MP3 business will die. People will always continue to need a solution to their portable entertainment problem. Nobody has an MP3 player problem.
To create great software and to continue thriving, it’s important to know your business. To be alive 10 years from now, Seagate needs to continue being in the storage business and not the hard drive business. It’s crucial to know the difference.