If you manufacture hard drives the end is in sight.
I do not say this because I lost my third drive in six months yesterday. (Ok, I admit it. Maybe there is a connection. I might be a tad irritated. Death to hard drive manufacturers!)
The traditional hard drive is under siege. Gadgets are transitioning away fast and cutting edge laptops are giving up on them entirely. A previous disruption in the hard drive industry came with the transition from ‘large’ drive technology to ‘small’ portable drive technology. Brands collapsed. Companies changed hands. (Famously discussed in Clayton Christensen’s book The Innovator’s Dilemma)
Enter the solid state drive (SSD).
- They’re pricey.
- They’re small.
- They’re fast.
- They consume less power.
- They’re solid state. (SO THEY DON’T BREAK. Again. Not that I’m mad. I am a fanatic backer-upper. I just dislike the mojo that times breakdowns with important deadlines. Used to have this problem with copiers as well. I seldom use copiers anymore. So there.)
Last time around large drive manufactures did not jump on the small drive technology until it was too late. This time SSD technology also seems to be coming from alternative quarters – memory cards for your camera anybody?
- Chips instead of platters.
- Silicon instead of steel.
The benefit of silicon versus steel is overwhelming.
The only thing holding back the floodgates of SSD’s in laptops is price.
Maybe supply.
But both price and supply issues have a habit of being solved at the same, brief moment in time. At which point the consumer portion of the mechanical hard drive business will collapse.
Are Seagate, Western Digital, Hitachi and others aware of the threat? (Of course they are, a really popular book ripped them a new one over the last strategic blunder. Product managers have this message tattooed in strategic locations.)
Can they do anything about it? The interesting thing here will be to see what strategy is used to protect the brands. In today’s world of easy outsourcing, a popular brand can transition from manufacturer to pure marketer in the blink of an eye. Larger conglomerates have the strategic advantage of being in multiple industries and can transition technology between brands/needs, more easily maintaining their manufacturing base. We’ve been using SSD’s of various sorts in cameras and phones for years and those companies are on the fast track for increasing drive density.
One can even argue that all the hard drive manufacturers should do is milk the existing technological path for as long as they can and then license their brand name off to someone who is better at the SSD drives. Sometimes fighting is less profitable than giving in. Might not like the idea, but history is littered with companies who fought but still ended up as little more than a nameplate. You have to give it thought. It has to be one of the scenarios.
Transitions are difficult.
Even in high tech.
So, I leave you with a thought experiment in honor of Halloween. (Given the horror that can be induced by thinking about such things.)
Lets just say you happen to be a candy manufacturer who makes the greatest sweet of all time. You’ve perfected distribution, cost containment, supply chain, marketing. Heck, you’re even on twitter.
Then you read in the latest Scientific American that a quick implant can be tuned to provide all the satisfaction, plus some, that your candy provides.
With none of the calories.
Thoughts of the Borg? It’ll never happen? People will never do that? Got the disbelief out of your system?
What steps do you start taking now to maximize the value of your brand in the face of substitutable technology? The clock is ticking set somewhere around a decade. At least you have more time than the hard drive manufacturers.
Let’s see how far out we can go here, shall we?
Resistance to technology is futile. Let competitors tilt at the windmills. Squeeze as much profit out of the candy business as possible while moving into or buying a different business.
.-= Brad Shorr´s last blog ..The World’s Greatest Marketer =-.
Great blog and question to ponder. I think the answer must go back to your core business. If your core business is making food, you will license your brand name to the new implant as moving into a new technology takes you away from your core. If your core business is only the candy, wake-up, you are still in the candy business, but you need an entirely new manufacturing process, called implant manufacturing. Every company facing a new technology that will disrupt their business is in a state of denial, the only difference being how much denial. Kay
.-= kay plantes´s last blog ..The Corner Gas (Book) Price Wars =-.
Three drives in six months. Gee, what are you doing to your hard drives, Fred. You’re using them for discus throws? Kidding.
Candy implants? Argh. Much of the pleasure of having candies I think is that it brings on oral pleasure. Implants make it impersonal. What kind of memory does this evoke? “Oh, one of the fondest memories I had was when I was five – my father gifted me with a candy implant for the first time…” It might not be horrific, but it’s a tad absurd, don’t you think? 🙂
.-= jan geronimo´s last blog ..You’re the World’s Coolest Blogger If Only… =-.
I love the idea of scenario building. It is one of the hardest activities in the strategic planning process. A great way to stretch a groups thinking is going to the absurd — no matter how unlikely it may seem. Truth of the matter is when I was in strategic planning for a major telecommunications company the idea of a telephone as a “videophone” was just being talked about — the computer becoming a “videophone” which one can use for nothing — absurd.
How bout a new super premium line, “Your Last Chocolate Splurge” for a just before implant party? So potent you need a prescription.
M&M Implants? The Hershey Kiss Chip? Special licensed decor for the hospital bed. Nurses show up as Keebler elves. Could this actually have a larger impact on the health care industry?
Maybe, but then again, around here kids go door to door on Halloween for candy so in the brave new world instead of holding out a bag maybe they hold up a button for a quick sweet hit. Or could the new sales tactic be to sell various electronic flavors of chip induced candy memories. First house Baby Ruth, second house Butterfinger, Third house Heath Bar…. oooh lets try that house again.
The candy aisle at grocery stores would be replaced by USB drives containing the latest in electronic sweet inducers. Hmmm. The grocery industry would have to change as well I guess.
For as much warning as they had (Dick Tracy was using a video wristwatch decades ago) it must have been a real bummer to finally get to the point where video conferencing was a reality and watch the whole business begin to wander off into a different industry.
While the candy industry looks stable to a certain extent, they are constantly battling various scenarios of supply disruption, changing tastes, costs issues and technological change. Look at how the new American taste for Dark Chocolate has allowed other brands to get footholds and forced changes in brands that seemed never to change.
Oh, and discus throws is actually a great idea for the hard drives in their present state. Maybe an annual competition. Or something involving catapults might be good. An annual school event?
Actually I think they already have M&M band-aids.
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Fred,
Unless the prospect of the candy implant chip actually turns out to be a feasible option, as Kaye suggests, I would seriously think that the time of your firm in the candy business is limited.
So I agree with Brad, milk it while you can and invest the proceeds in another line of business.
.-= Andrew´s last blog ..Should models be sacked for being ‘too fat’ =-.
If we could figure out a way to make sure that employees were also benefiting from the milking process I’d feel a lot better about the strategy, and maybe it would be appropriately implemented more often.
First of all, do you know, for sure, it is a hard-drive problem. I am pretty sure a software attack (virus) could take out your hard-drive and make it seem like a “steel” attack. In that case the hardware manufacturers might not respond because it is not their fault, they only need to keep you guys buying new hard-drives, which seems to be working ok for them.
Second, are you an expert on hard-drive systems, in that your diagnoses, on what happened to your hard-drive, maybe more than what a normal user would be able to understand?
.-= Larry Dunbar´s last blog ..The long arm of the long war (Thomas P.M. Barnett :: Weblog) =-.