Clayton
M.
Christensen
The Rigid Disk Drive Industry:
A
History
of
Commercial
and
Technological Turbulence
In
its
early years,
the
disk drive industry was
led by a
group
of large-scale, integrated firms
of the
sort that Alfred
D.
Chandler,
Jr.,
observed
in his
studies
of
several
of the
world's largest industries.
The
purpose
of
this history
is to
explore
why it was so
difficult
for the
leading disk drive
manufacturers
to
replicate their success when technology
and
the
structure
of
markets changed.
The
most successful
firms aggressively developed
the new
component technolo-
gies required
to
address their leading customers' needs,
but
this attention caused leading drive makers
to
ignore
a
sequence
of
emerging market segments, where innovative
disk drive technologies were deployed
by new
entrants.
As
the performance
of
these new-architecture products
improved
at a
rapid pace,
the
new firms were eventually able
to conquer established markets
as
well.
As a
consequence,
most
of the
integrated firms that established
the
disk drive
industry were driven from
it,
displaced by networks
of
tightly
focused, less integrated independent companies.
F
rom the beginnings of the computer industry, engineers have
wrestled with the challenge of storing and retrieving informa-
tion. Users have wanted to store more information and access it
more rapidly and to do so at decreasing cost. The effectiveness with
which computer and peripheral equipment manufacturers
responded to these demands has been an important factor in the
CLAYTON
M.
CHRISTENSEN
is
assistant professor
of
business administration
at the
Harvard University Graduate School
of
Business Administration.
I wish
to
thank
the
Division
of
Research
of
the Harvard Business School
and the edi-
tors
of
Disk/Trend Report,
an
industry market research document published annually
beginning
in
1976
by
Disk Trend,
Inc.,
Mountain View,
Calif.,
for
their generous support
and assistance
in the
research reported
in
this article. Much
of the
data used
in
this
his-
tory was originally published
in
Disk/Trend Report.
Business History Review
67
(Winter 1993): 531-588.
© 1993 by The
President
and
Fellows
of
Harvard College.
https://doi.org/10.2307/3116804 Published online by Cambridge University Press
Clayton M. Christensen I 532
growth of the computer industry and has enabled users to apply
computing power in a broadening range of tasks.
Information storage and retrieval capabilities of computing sys-
tems comprised semiconductor (formerly magnetic-core) memory
circuits and peripheral magnetic storage and retrieval devices,
including tape, rigid (hard) disk, and floppy disk drives. Although the
history of each of these technologies is rich, the history of the com-
panies that developed rigid disk drives seems to have been particu-
larly complex and tumultuous. The rigid disk drive industry grew
from a research project begun in the San Jose laboratories of Inter-
national Business Machines, Inc. (IBM) in 1956 to a $15 billion
industry in 1990.* Of the 138 firms known to have entered the
industry in this period, 103 subsequently failed, and six others disap-
peared through acquisition or absorption by competitors.
New firms entered to lead the industry in four of its six techno-
logically defined product generations. The demise of the leading
firms of each generation seems to have been triggered by the emer-
gence of new product architectures and of new market segments in
which these architectures were used.
2
This history of the rigid disk
drive industry therefore is focused on the emergence of these new
technologies and markets.
This article examines those firms that design and manufacture
rigid magnetic disk drives for sale in the original equipment (OE)
market to computer manufacturers. Because this study's emphasis is
on the interactions between technological developments and market
forces in the disk drive industry, primarily the open-market disk
drive activities of vertically integrated computer manufacturers such
as IBM and Control Data—not their internal, intra-corporate disk
drive transactions—are considered here.
3
By 1990 rigid disk drive production was a worldwide industry
1
A description of how disk drives work, as well as definitions of technical terms used
in this history, are included in the Appendix. Because few data were available about the
industry prior to the publication of Disk/Trend Report, most of the statistical analyses
employed in this article begin in 1976.
2
In this context, "architecture" refers to the system that defines the way in which
computer components interact with each other. See Rebecca M. Henderson and Kim B.
Clark, "Architectural Innovation: The Reconfiguration of Existing Systems and the Fail-
ure of Established Firms," Administrative Science Quarterly, March 1990, 9-30.
3
Details about the role that the captive disk drive operations of IBM and Control Data
played in developing many of the key technologies used in the OE market industry are
recounted in a companion paper. See Clayton M. Christensen, "Industry Maturity and the
Vanishing Rationale for Industrial Research and Development," Harvard Business School
Working Paper, 1993.
https://doi.org/10.2307/3116804 Published online by Cambridge University Press
The Rigid Disk Drive Industry I 533
populated by multinational firms with headquarters in twelve coun-
tries spanning four continents. Several produced drives outside the
country where their headquarters were located; for example,
Rodime, a Scottish firm, produced drives in Florida; IBM and Quan-
tum both manufactured drives in California and Japan; the manufac-
turing operations of most U.S. firms were centered in Singapore; and
some Japanese firms manufactured drives in the United States. Ref-
erences in this article to the "United States," "Japanese," or "Euro-
pean" disk drive industries thus relate to those groups of firms whose
headquarters are in those countries.
4
The Emergence of the Industry
Technological
Definition of the Disk Drive at IBM • Almost all
development of magnetic information-recording technology through
the mid-1960s occurred at IBM's San Jose laboratories.
5
Engineers
there guided the company through six distinct generations of mag-
netic recording products prior to the emergence of
a
dominant prod-
uct design: magnetic drums; 0.5-inch reel-to-reel tape; moving-head
fixed-disk drives; rigid removable disks and disk packs; flexible
(floppy) removable diskettes; and, finally, sealed, non-removable
"Winchester" rigid disks.
The earliest peripheral magnetic information-storage devices
were magnetic drums—an architecture similar in concept to Thomas
Edison's early phonograph cylinders. The drums were developed at
IBM in the late 1940s and until the mid-1950s were the primary
storage devices used with early computing machines. Magnetic drum
technologies gave way to magnetic tape in the mid-1950s, and
4
This is consistent with the importance of corporate headquarters activities in indus-
tries studied in Michael Porter, The Competitive Advantage of Nations (New York, 1991).
3
This section's information about IBM's pioneering work was drawn from James
Engh, "The IBM Diskette and Diskette Drive"; J. M. Harker, et al., "A Quarter Century
of Disk File Innovation"; and L. D. Stevens, "The Evolution of Magnetic Storage"—all in
the twenty-fifth anniversary issue of the IBM Journal of Research and Development 25
(Sept. 1981). Other useful information sources were H. V. Bordwell, "Cornerstone of a
Division," Reflections (a periodical publication of IBM's Santa Teresa Laboratory), June
1984,
6-11; "The IBM 350 RAMAC Disk File," American Society of Mechanical Engi-
neers,
Santa Clara Valley Section, Feb. 1984; "How One Company's Zest for Technolog-
ical Innovation Helped Build the Computer Industry," IBM Corporation, San Jose
Calif.,
1984;
"Disk Storage Technology," IBM Corporation, San Jose,
Calif.,
1980; a long and
delightful personal interview with Mr. Reynold Johnson, head of the IBM team that
developed the first disk drive, 5 May 1992, in Palo Alto,
Calif,;
and personal interviews
with twelve other earlv members of IBM's disk drive team.
https://doi.org/10.2307/3116804 Published online by Cambridge University Press
Clayton M. Christensen I 534
IBM's RAMAC Disk File • Introduced in 1956, the RAMAC was the first rigid disk
drive. Skeptical engineers in the San Jose laboratories called it "the baloney sheer." In
1984,
the original RAMAC Disk File was designated an International Historic Landmark
by the American Society of Mechanical Engineers. (Photograph reproduced courtesy of
IBM.)
through 1963 tape was the dominant data storage and retrieval
medium. The primary drawback of tape storage was access time: if
a
user needed to access data at the end of
a
tape, the drive had to read
through the entire tape before it could access the desired file. More-
over, changing a record anywhere within the tape required
re-recording the entire tape.
IBM's efforts to address its customers' thirst for increased pro-
cessing speeds bore fruit in 1956, when the company shipped its first
moving-head magnetic disk drive, called RAMAC—an acronym for
Random Access Method for Accounting and Control. The use of
rotating disks in the IBM RAMAC represented a major change in
engineering thinking for the magnetic information-storage industry.
In all previous generations, the need to position the read-write head
precisely led engineers to fix it rigidly in place and to move the mag-
netic media—drums, tapes, or strips—past it. In contrast, the
RAMAC drive had a movable head, positioned in the first product
0.0008 inch above the disk's surface via a hydrostatic air bearing. The
https://doi.org/10.2307/3116804 Published online by Cambridge University Press
The Rigid Disk Drive Industry I 535
RAMAC drive was a mechanical marvel, with one moving arm and
head for each of fifty 24-inch diameter disks in the drive.
In 1962 the fourth generation of magnetic storage devices—the
removable disk pack—surpassed the RAMAC's fixed-disk architec-
ture in capacity and flexibility. By interchanging packs of rigid disks,
users could store far more data than was possible in a fixed-disk sys-
tem. The disk pack was the industry's dominant architectural design
for more than a decade, and it was the product vehicle that most of
the early participants in the original equipment market used to enter
the disk drive industry. In 1971, IBM introduced the first drive using
removable, flexible (floppy) diskettes to enable more efficient off-
line storage and loading of the proliferating number of specialized
routines and programs for its mainframe computers, where fre-
quency of use did not justify permanent residence for those pro-
grams in core memory. The original Model FS33 floppy disk drive
was a read-only device, but a read-write version followed in 1973.
IBM's Model 3340—a sealed rigid 14-inch disk drive introduced
in 1973 and dubbed the Winchester— was IBM's crowning architec-
tural achievement in magnetic storage.
6
Over the next decade the
Winchester design was adopted throughout the world industry.
Competing firms have incrementally improved, but have not yet
radically altered, the fundamental Winchester design. In the disk-
pack architecture, particulate contamination and the removability of
the disks prevented close head-to-disk spacing, which inherently lim-
ited improvements in recording density. The Winchester drive
addressed these issues by permanently sealing the disks with heads,
motors, actuators, and electronics inside a dust-proof drive housing.
This enabled IBM to reduce the height at which the head flew over
the disk surface to .000008 inch—a height one-thousandth of the
head-to-disk distance in the RAMAC drive. The cost per megabyte
of Winchester drives was 30 percent less than the cost of disk-pack
drives of equivalent capacity.
The Rise of
Plug-Compatible
Equipment Manufacturers • Until
IBM introduced its disk-pack architecture in 1962, it was the only
6
The term "Winchester" was the name of IBM's project to develop the Model 3340.
The name was chosen by the project's manager, who owned a 30—30 Winchester rifle.
These numbers matched the objectives originally specified for the 3340 project, to
develop a drive with 30 megabytes each of fixed and removable capacity. Other industry
participants subsequently borrowed the term for their sealed-system drives, and "Win-
chester" joined the ranks of cellophane and nylon as a generic name for a category of
products. James Porter, editor of Disk/Trend Report, interview with author, October 1991,
Mountain View,
Calif.
https://doi.org/10.2307/3116804 Published online by Cambridge University Press