Hey, Buddy! Wanna Buy Some Storage?

You all remember floppy disks, right? They were the backbone of the first computer network -- the sneakernet. You could take your data with you. After floppies came hard drives, CDs, DVDs, and USB keys. When we put these in motion, we got Netflix and digital cameras. And when we connected them to the network, we got TiVo and iPods.

Pretty soon, in a year or so, youll be able to turn your iPod into an audio “TiVo” for HD radio that will give you access to publicly available songs whenever you want them. A little later, you’ll buy new products that capture and store ubiquitous wireless and Internet-based audio and video.

With each innovation you adopt, you and much of the world will, almost unawares, find yourself accelerating faster and faster down a very steep Storage Slope -- much steeper than the Bandwidth Slope, much steeper than the Processing Slope (also known as Moore’s Law), and ultimately much more powerful than either of them.

Figure 1:

Where will it all end? I think it will end in a Dark Alley. That’s right: a dark, albeit figurative, alley. There, someone is going to creep out of the shadows and say, “Psst. Do you want to buy all the jazz music ever recorded? One hundred bucks and it’s yours.” And you’ll hand over the cash (or its electronic equivalent) and take back 10 terabytes worth of music -- enough for four hours of listening with no repetition every day for the rest of your life.With that single act, no more than a few years in the future, copyright law will disintegrate – and, with it, the last impediment to unlimited, virtually free storage. All of Sinatra in a thumbnail-sized box for $10? Why not? Even the most ethical of us will succumb. Hollywood’s business model will crumble. Another communications monolith will be left wondering what hit it.

I’m not advocating it. I’m just making a simple observation about basic human nature. (For a different take, see my partner Greg Blonder’s column.)

Many of us have had trouble seeing the Storage Revolution coming. Twenty years ago, when I was at Raynet selling fiber-to-the-home gear to phone companies, the killer application that the big telcos were going to dominate was Video on Demand. Blockbuster killed that. Then the theme became broader selection (i.e., “The Long Tail”) that was, once again, going to stimulate VOD. Netflix killed that. Then it was going to be time-shifted Situation Comedies on Demand (SCOD?). TiVo killed that.

None of these innovations embodied any great leap in technology. Instead, they represented simple, cheap alternatives from entrepreneurs who used inexpensive storage to undercut the collective bandwidth and processing assumptions of some of the world’s largest corporations and most experienced VCs.

Storage advances march to a staccato beat. And that steady thud -- e.g., improvements in flash or rotating memory -- keeps finding one more way to outstrip its competitors.Additional bandwidth? It can never arrive faster than we can put up new cell towers, dig up the petunias, or install new boxes on the garage wall. And that’s not very fast. It takes time to dig a trench, erect a tower, or send a guy out to screw some electronics to a wall (not to mention the labor costs involved in all of these).

Additional processing power? It can never arrive faster than it takes to develop the software -- think Microsoft Corp. (Nasdaq: MSFT) Vista -- to make it usable. Besides, 10 years ago we could already make MP3 chips powerful enough to play audio, so who cares about more processing power?

But additional storage? Virtually nothing stands in its way. With the introduction of 1-Tbyte perpendicular storage this spring by both Hitachi Data Systems (HDS) and Seagate Technology Inc. (NYSE: STX), the path has opened to 1-Pbyte disks in just a few years.

And while demand goes up, up, up, cost comes down, down, down. The combination of low- and high-tech storage innovation and the volume production stimulated by the avalanche of new storage applications -- like the TiVo and the iPod -- have produced the steepest downward cost curve in all of electronics.

Nor will the cost-cutting stop. Radically new storage technologies on the horizon, to point out just one future vector, promise to supersede current flash memory capabilities by orders of magnitude.It’s clearly time to alter our collective view of the future. Many of us still focus too much on bigger pipes and faster computers. Yet it’s been clear for a few years