Sony wants to tell us that its storage, specifically the AIT/S-AIT storage part of Sony's Semi-conductors and Electronic Solutions (SES) organisation, is in good shape. The background to this is the new Stringer strategy for Sony with its promise to focus on strategic businesses, with the heart being consumer electronic devices, and consequent cost-reductions and job losses.

Mark Lufkin is Sony SES director of IT peripherals and based in the UK. According to him we should understand that the storage business is in a good situation. This is what he said:

"From the point of view of the storage business we're profitable and growing. There is no impact on us in terms of the (Stringer) reduction plan. We're not desperately worried about where AIT is going in the future."

There used to be two business units involved in the AIT area: drives which were sometimes not profitable; and media which is profitable. Three months ago they were merged.

Mark said: "The (AIT) business is now seen as a total media/drive business, like PlayStation. With drives there is no longer the same pressure on us to show a 5 percent profit. ... AIT revenue is up 110/115 percent compared to a year ago. It's a reasonably strong business."

New products
There are new products coming. There will be a 150GB AIT product, fitting between AIT-3 (100GB) and AIT-4 (200GB), and backwards-compatible to AITs 1, 2, and 3. It will arrive early next year.

For comparison Exabyte just announced its VXA320. Its raw capacity is 160GB and its transfer speed is 12MB/sec, like AIT-3. Thus it compares well with the coming AIT-3 and a half.

An AIT-5 product will be unveiled in Q3, calender 2006, in the September-October period. That's a 400GB capacity tape. (All capacities are native by the way). Its transfer speed will be 48MB/sec, double AIT-4's speed of 24MB/sec., and it will be backards-compatible with AITs 3 and 4.

The tape automation/library market is a flattish growth/no growth area at the high end. but autoloader and small library sales are growing. A 20-slot S-AIT library offering 10TB capacity in a 5U rack unit is ready for this.

There will be a SATA interface AIT Turbo drive introduced early next year: "definitely an internal drive. There may be external ones." Mark doesn't think it's likely that USB interfaces will be used by Sony for its tape drives. Based on customer feedback: "We're keener on SATA. USB is a low-end peripheral interfaces. We're looking at using SAS for high-end drives, possibly for S-AIT. It's being thought about for AIT-5. AIT generally is for smaller servers," and SAS is seen as a mid-range/high-end interface as far as servers are concerned.

ROHS is no problem
The EU's ROHS restrictions, banning products being sold if they contain, lead, cadmium, hexavalent chromium, etc. don't affect Sony because it has its own recyclability program which is more stringent than ROHS. Contrary to suggestions by HP's Chris Sopp, Sony's DDS-4 drive is already ROHS-compliant. Mark said: "AIT is not all there yet. It will be ROHS-compliant by January next year."

There will be no ROHS cost-driven withdrawal from the DDS market by Sony.

And so ...
The main conclusion I draw from this is that Sony's AIT business is in better shape than might have been feared. Drive sales are weaker than media sales and AIT/S-AIT is not growing its market share, according to IDC. But AIT revenues are growing. Also the products are being developed, both at an interface, drive and library levels.

What remains the case, is that disk-to-disk backup is eating into the tape market. A Baird Storage and IT Study reads: 'Low cost ATA disk has taken the backup environment by storm. ... We believe the emergence of ATA (disk drives) in the backup environment has begun to cannibalise tape sales, and will continue to limit growth in 2005/2006." Baird found that larger enterprises are adopting D2D backup more quickly than smaller enterprises though.

What also remains the case is that Sony's AIT/S-AIT tapes, drives and libraries store more data in less space than virtually all other formats.

Sony's tape challenges include other formats/vendors growing their market share, viz. LTO and Exabyte, and D2D backup shrinking the general tape market. Microsoft's DPM will take the SME market by storm and we can expect significant numbers of SMEs to reduce their reliance on tape. Quantum is going to bring out a D2D backup product for Travan users and we can expect other suppliers to follow suit.

The backup business is changing from one where tape format owners sold drives to make pots of money from media, to a business where stand-alone backup products are increasingly unattractive. Ask Bakbone which is introducing an integrated data protection strategy covering disk and tape and optical. Also ask HP with its SME product backing up to tape, disk or optical media. Ask Overland too, pushing to grow out of its tape automation base.

So Sony, like other tape format and product suppliers, faces tape market headwinds. What business is Sony storage in; the tape storage business or the data protection business? If it's in the tape storage business it faces challenges to preserve and develop its business over the next few years. If it is in the data protection business then it faces a fresh set of challenges, much, much larger ones.

Either way significant investment will be needed from the suits in Tokyo. If Sir Howards Stringer's reforms work it could be forthcoming. If they don't....

Let's hope they do. Sony is a great company and deserves to get back on its feet.