ness. This sector covers all software used to help store, access, or manage data, providing among other things better data availability, data protection, and disaster recovery. Because its software products were independent of any specific underlying hardware platform, he noted, the business stayed clear of the debates over RISC vs. SISC, Sun vs. Intel, or the merits of various operating systems. He characterized software storage as a fairly well-defined yet large niche and said that it had posted a “dramatic” 41 percent compound growth rate over the previous five years.
In his own attempt to deconstruct the computer, Dr. Bregman recounted, he had begun with Moore’s Law, then turned to the communication between the elements that do the computing as reflected in Gilder’s Law: Bandwidth grows three times faster than computing power.13 This latter formulation, he commented, “really just says that bandwidth is growing dramatically—getting cheaper, more available—and that that’s driving something.” He then cited a yet-unnamed law stating that storage achieves 100 percent growth in density annually, saying that translated into better cost at a dramatic rate. “The improvement at the storage element level is happening faster than it has been in the microprocessor level over the last several years,” he asserted.
To illustrate the implications of this advance, he offered a quote from the November 25, 2002, issue of BusinessWeek: “E*Trade finished yanking out 60 Sun servers that cost $250,000 apiece and replaced them with 80 Intel-powered Dell servers running Linux that cost just $4,000 each.” Such instances as this factor-of-50 improvement in underlying capital investment were proving a source of concern for suppliers of storage hardware, whose business had declined by a factor or three over the previous two years, reflecting a major change in the landscape of the marketplace for storage systems. “Just to be fair, not all of this decline is coming about purely because of disk-drive technology,” said Dr. Bregman, who pointed in addition to changes at the storage-subsystem level arising from the combined influence of improvements in communications, in computing capacity, and in software that utilizes and links the underlying disk-drive technology.
Addressing the issue of actual business benefit derived by the customer, Dr. Bregman posited that simply quantifying end users’ investments in information technology might not be the right way to gauge their levels of productivity improvement. He noted that the industry was pervaded by nervousness resulting from the recent slowing of the purchase rates of both software and hardware, which had reflected the vigorous growth of the economy through 2000. He sug-
According to George Gilder, “bandwidth grows at least three times faster than computer power.” This means that if computer power doubles every 18 months (per Moore’s Law), then communications power doubles every six months. Bandwidth refers generally to the amount of information that can be transmitted over a connection over a fixed period of time. See www.netlingo.com.