Optware will have three holographic storage disks on the market by the end of next year, the company has announced.

While opening a new US branch of its business, president of Optware America, Terry Loseke, said that the company would release Magnum HVD drives with up to 200GB next year, and was aiming to break the 1TB capacity mark by 2008.

Holographic disks can achieve a far higher density of data storage than standard magnetic disk drives, by storing data as a holograph throughout the disk, rather than just on the surface.

Optware's technology works by shining a green laser through the disk and then recording data in the polymer resin. A shiny surface on the bottom of the disk - made of the same material a compact disc or DVD has on its surface - then reflects that data back up to the laser to be read.

Loseke said Optware will be able to undercut its main rival InPhase - which is also due to produce its holographic storage next year - because the technology is less complicated and therefore less expensive to produce. "A disk can cost the same as a DVD," he said. "The cost per megabyte is orders of magnitude less than magnetic disk storage media. It's about one-tenth of the cost of a hard drive."

Both Optware and InPhase are targeting their initial products at the data archival market because the technology is removable and can be kept for decades without deterioration of data. Loseke said Optware's Magnum HVD drive will fit in standard tape library drive slots, which will ease integration of the technology with backup software already in use.

Brian Garrett, technical director at research firm Enterprise Strategy Group said holographic storage could one day bump archival tape media from its throne. But it will have to meet or beat tape's price point before that happens. "It's intriguing, but it really comes down to price-performance. Optical disk has been a challenger to tape for years, yet hasn't taken over," Garrett said. "But we're definitely due for a revolution."