For Plasmon UDO has been a hard field to plough. It has cost Plasmon a re-financing and a CEO change because development costs were high and sales haven't been high enough. One view of Plasmon is that it is stuck fast in a niche from which cost-cutting and a stronger sales discipline will extract a profit but not position the company for growth post-UDO.
Another view, that of the refreshed management team led by Stephen Murphy, is completely different. Their song is that the archive times are a-changing.
Data centre bosses driven to look for power-savings are looking afresh at moving inactive data off spinning disk drives and onto an archive, an archive which provides near line access, stores data immutably and has a very long life with economical cost of ownership. Because of this Plasmon's prospects have changed from document-managing departments and niche image stores to more general data centres and it believes its addressable market is growing.
The downbeat view
This view is based on the relatively high cost of UDO drives and a particular estimate of the addressable market for automated optical archive products. It goes like this, according to sources familiar with Plasmon's situation.
Plasmon's desktop single drive UDO system is priced at £1,700 in the UK and under $3,000 in the USA. One source said: "Assuming any reasonable manufacturer's trade margin puts the absolute minimum possible factory cost at $1000.00 US or more. My experienced estimate is $1300 - $1500.00."
That estimates Plasmon's single drive build cost is in the £700 area. The source said that, at this price: "there is virtually no chance for any stand alone/desktop drive market of any real substance ... At that level it is not possible that there will ever be a significant desktop drive market ... (and) a volume of 30 to 50K units per year is required to even make a price near $3000 work," based on volumetric factors affecting drive costs.
Plasmon has sold 600 drives to the Romanian government and several hundred non-networked Gatso speed cameras in the UK will have UDO drives fitted. The source said this: "exactly makes my point. (Regarding the Romania deal) the numbers are tens and hundreds, not thousands or tens of thousands."
The conclusion is that the real market for UDO lies in automation devices with multiple drives. The source believes that here too the drive cost and also the media costs have limited UDO's prospects as a multi-drive archive device. He says that, according to IDC numbers: "The (optical) autochanger market has declined from a high of around 20,000 units per year in the mid 1990's to fewer than 4,000 units in 2007." The autochanger market excludes CD and DVD jukeboxes and desktop single and dual drive units; it's a multiple drive market.
"If Plasmon today has 80 percent of the data disc jukebox market it may be selling 3 - 4,000 units per year. There is no possible way the drive market for UDO exceeds 20K drives per year." Because of the drive cost: "As a result, Plasmon loses money on every drive built and will continue to for the life of the program." Further; "There is no way that the realistic, accessible market available to Plasmon exceeds $100 million US world-wide.