OCZ's CEO Outlines Post-Acquisition Plans for TLC and Native PCIe SSDsby Anand Lal Shimpi on March 7, 2014 6:19 PM EST
Late last year Toshiba announced its intentions to acquire OCZ's assets for $35 million in cash. The offer came after OCZ filed for bankruptcy, following a year of corporate challenges not to mention the difficulties of being an independent SSD manufacturer in a crowded market. Toshiba faces challenges of its own, although not financial. Despite being a large player in the NAND industry, Toshiba hasn't been able to produce the sort of success rival Samsung has been able to in client or enterprise SSD markets. Unlike many acquisitions in the tech industry, the Toshiba/OCZ deal actually seems to make a lot of sense. OCZ needs NAND and cash, while Toshiba needs competitive SSDs in the market. I spoke with OCZ's CEO Ralph Schmitt on the phone earlier today to get a feel for how the two companies are going to work now that the acquisition is complete.
As with most acquisitions, the promise from the get-go is independence. In the case of Toshiba/OCZ, independence is obvious. OCZ exists as a subsidiary of Toshiba and will receive funding/support from the company, but will continue to operate its own product lines independently of Toshiba.
We will see technical collaboration between the two companies, but sales will be kept independent from one another. Toshiba is strong with PC and enterprise OEMs, while OCZ is stronger in the channel. For now, that's how the lines will be drawn. In many ways it's similar to the Micron/Crucial relationship, with Micron (the parent company) handling OEMs and Crucial being the consumer facing brand. What's different in this case is Toshiba will likely depend on OCZ's controller expertise quite a bit.
Toshiba appears to be viewing the acquisition as a marriage of strengths. Toshiba will leverage OCZ to develop SATA and PCIe based controllers, while OCZ has canceled its own plans for SAS drives and instead will lean on Toshiba's expertise there. We'll see division according to form factor as well. OCZ's expertise is in more traditional 2.5" form factors today, while Toshiba has been building M.2 drives for a little while now. We'll see that separation continue, at least until there's a larger shift towards client use of M.2 (at which point OCZ may start making drives in that form factor as well). The internal goal is for zero overlap of efforts between both companies. That doesn't mean that we won't see OCZ branded Toshiba drives or vice versa, just that we won't see OCZ and Toshiba controllers created that compete for the same markets.
Business appears more or less as usual at OCZ. None of my contacts over there (with the exception of the CEO) have changed over the past few years. The entire technical team remains intact, which is pretty surprising given the dire financial situation the company was in last year. I believe a lot of it has to do with belief in the new leadership. When Ralph showed up in late 2012, a lot of folks I expected to quickly leave the company stuck around because they believed in the change he was bringing. It appears to have panned out.
There's limited room for independent SSD manufacturers. Exposure to volatility in NAND pricing and availability is a huge problem. OCZ's days were limited as an independent provider, despite OCZ making it much further than anyone ever expected. Most of its competitors that came from similar roots exited the SSD business while OCZ was still doing well in the space. An acquisition (or outright exit) was inevitable, and Toshiba's move on the business appears to be a really good fit.
The lack of a TLC offering is a huge hole in OCZ's (and Toshiba's) roadmap. OCZ competes well at the high end of the SATA market, but it has no answer to Samsung's SSD 840 EVO or Crucial's M500. Toshiba hopes to fix that. By the middle of the year Toshiba will release its first TLC based SSD, leveraging an existing Toshiba controller design. OCZ will probably end up selling a branded version of this drive to help address some of the more cost sensitive segments of its existing markets.
Early next year OCZ hopes to leverage Toshiba's 3D NAND technology to hit more competitive price points with a controller of its own: Jetstream Express.
OCZ's Jetstream Express has been in development for the past year and a half. It's a native PCIe Gen 3 controller with support for SATA. Tapeout is scheduled for the second half of this year but all IP blocks within the design are presently being run on FPGAs to work through bugs and continue firmware development. Similar to what we've seen from other controller vendors, there's a big focus on error correction and developing flexible front end and NAND interface blocks with Jetstream Express. OCZ expects the first Jetstream Express drives to ship in Q1 of next year. The initial target will be client however we should see an enterprise version follow shortly thereafter. OCZ hopes to have the client Jetstream Express drive to show off at CES next year. The timing does leave OCZ out of the beginning of the next round of controller releases from rivals Samsung and SandForce.
I brought up the point of using 3rd party controllers. While there's still at least one project that leverages a 3rd party controller in the pipeline, the goal is to move exclusively to OCZ and Toshiba designed controllers going forward. The follow-on to the recently announced Z-Drive 4500 (Z-Drive 6000?) will use a 3rd party PCIe based controller, likely as a way to bridge the gap between existing SATA options and Jetstream Express next year.
On the NAND front OCZ is almost completely transitioned over to Toshiba at this point. I think it's a safe bet that we won't see any OCZ products shipping with 3rd party NAND going forward.
The NAND side of the story is actually one of the more interesting aspects of the acquisition. Similar to how we have to fight for access to internal data on architectures and design, 3rd party controller/drive makers are kept at arm's length from some of the details on the inner workings of the NAND they're buying. Now that OCZ is in house, it gets far better insight into the NAND it's integrating into drives which in turn feeds back into firmware and controller development/optimization.
When Ralph Schmitt arrived at OCZ about 1.5 years ago, one of his primary goals was to increase the company's credibility as a provider of reliable SSDs. Development and validation cycles increased, which impacted time to market but significantly improved return rates. I asked Ralph if Toshiba planned on further improving things now that OCZ is a member of a company that supplies to OEMs like Apple. Toshiba evaluated all of OCZ's manufacturing and design processes and concluded that they were generally pretty good. The biggest change on the quality front will be access to NAND. Almost all NAND providers save the best stuff for themselves, but with OCZ in-house it should get the same 1st class treatment from Toshiba.
The Toshiba acquisition appears to be a good next step in the maturation of OCZ as an SSD player. Samsung is still an incredibly fierce opponent, and one that has shown absolutely no signs of slowing down. To be honest, until the new OCZ is cost competitive with the 840 EVO I'm not sure things will change much from a marketshare perspective. What I am sure of is that the old OCZ had no chance to be competitive in this new mature SSD space with vertically integrated players. With Toshiba's support and access to its NAND, the new OCZ at least has a chance to bring its own flavor of competition to the table. As good as Samsung's SSDs have been lately, it's still incredibly important to have competition in this space.
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hosps - Friday, March 7, 2014 - linkDid you ask Ralph what he plans to do for all the shareholders he lied to and completely screwed over? For all that he talked about trimming the operation to improve overhead and being transparent to the shareholders, we now find out that the staff size is primarily the same and they never stopped burning through their cash developing new products for which they couldn’t produce. It defies logic how a CEO would continue to spend this kind of money without making a profit. The acquisition by Toshiba feels like a shady backroom deal that was a win for everybody but the shareholders. It was dishonest by Ralph and as their leader, it’s difficult to trust anything OCZ/Toshiba does in the future.
Death666Angel - Saturday, March 8, 2014 - linkThis is not a shareholder-protection site, it is dedicated to technology. What you are interested in is not covered by this site.
A5 - Saturday, March 8, 2014 - linkNot to mention anyone holding OCZ stock after about 2011 or so should've known better. That company was in a death spiral for a long time.
sheh - Friday, March 7, 2014 - linkIsn't the M500 2-bit MLC rather than TLC?
Homeles - Friday, March 7, 2014 - linkUnless something's changed, it uses Micron's 2-bit MLC 20nm 128Gb NAND. So yeah, technically that bit is off. I think the point Anand was meaning to get across was that the M500 is very competitive in price, or it was last I checked.
hojnikb - Saturday, March 8, 2014 - linkYep, here in EU m500 is the cheapest drive u can get, even though it's using MLC flash.
jjj - Friday, March 7, 2014 - linkI highly doubt Toshiba will have 3D NAND early next year, this year they are shifting to their second gen 19nm node, next year they should go 15nm (or so). It would be surprising if they have any significant volume of 3D NAND before 2016.
At least NAND prices this year seem likely to decline at a solid pace (unlike last year). Growth in smartphones and tablets is slowing so we might see some oversupply if NAND capacity goes up some 40%.
HisDivineOrder - Saturday, March 8, 2014 - linkThis is what they always say in the short term. Look at Skype and Microsoft. "We're not going to change anything. We're keeping things the same. Don't worry. Everything is going to be the same."
Now that Tony Bates is gone, the way is made clear to start tearing down the walls and smoosh that peanut butter together with that vaseline.
The same will happen to OCZ. It's inevitable. As soon as Toshiba sees what's working and what's not with OCZ, they'll cull away the extraneous and bring the small bits that work in-house. OCZ will cease to exist.
The world will be a little better off. OCZ is a blight, has been a blight since the early days of rip-off memory that wasn't even tested at its proper speeds, and continued to be a blight even after PC enthusiast sites were desperate for SSD's to be great and ignored all the signs of real problems from the vast majority of OCZ models released.
Even now, a lot of those sites ignore the rampant issues OCZ has had by recommending them because, "Yes, they had a lot of problems, but now they're fixed." They were always "fixed now" even though the next time you'd read about them, they were again "fixed now" because apparently they were broken the last time when we were told they were "fixed now."
So you'll forgive me if I don't wait until Toshiba grinds OCZ up into paste and rids themselves of all the people responsible for years and years of horrible products.
oczstoragesolutions - Tuesday, March 11, 2014 - linkAs this is my first post in this thread please allow me to identify myself as an OCZ Storage Solutions employee.
Hello HisDivineOrder, thank you for all your comments. OCZ has always been focused on delivering high performance and many of our products do indeed cater to high performance/enthusiast customers. The company has undergone many changes, especially over the last two years where there has been a large focus on delivering not just the highest performance but the highest quality as well. We believe that quality comes from the top, something that the new management put great emphasis on. This has included significant updates and investments in designing for quality, enhanced processes, the drive to bring controller and firmware technology in house, stringent vendor and NAND qualifications, enhanced testing/validation, as well as improvements in manufacturing. These changes have had a very positive effect and our current Vector and Vertex family of products exhibit a very low RMA rate, and we continually strive in all areas to deliver the best high performance SSDs to the client market. The combination with Toshiba enables us to further enhance our products with premium quality NAND, as well as earlier access to NAND during the development phase.
Should you have any product issues please do not hesitate to contact our customer service team who will be more than happy to support you. We appreciate all the support from all our valued customers as well as your feedback, all of which we will use to continually improve our service level and product offerings. Thanks.
BMNify - Wednesday, March 12, 2014 - linkoczstoragesolutions:
Thanks for chiming in, it's always nice when a company engages the community.
First let me start off by saying that i have 8 OCZ drives and not one of them has failed. They are fast drives. (Here's a grievance for you: I purchased 2 vertex 3s for RAID the week they came out for $300 each, only to have the MAX IOPS version released a couple of weeks later for 20 bucks more. I'm digressing, but i never forgot that BS.)
Anyway, when the Vector was released the two primary marketing points were reliability and performance. The Vector came with a five year warranty, and we were led to believe that the new drive had gone through extensive validation and testing, but to be honest the reviews on Newegg didn't really bare this out. As of right now the 128GB model sits at 3 eggs out of five with an large number of those reviewers complaining of bricked drives. (If i recall the 512GB's reviews were even more dismal.)
To the extent that Newegg reviews can be used to gauge the reliability of hardware, what do you have to say about this situation? If you look at drive reviews for most other competitors, the averages just aren't that low. Look at Samsung or Intel drives and the ratings are almost universally outstanding.
This is what, i believe, the parent poster is referring to when he talks bout how the OCZ drives are "fixed now".
I am not trying to kick you guys while your down, i desperately want you to succeed, but you have a very bad perception problem that needs to be addressed sooner than later. Reading through those catastrophic reviews is harrowing for a guy like me who owns 2 extremely expensive Vectors, and to be honest i'm just sitting around waiting for them to fail. (I have a 1tb samsung EVO that i have complete confidence in, but nothing important is going on those Vectors.)
I bought my Vectors day one, given those reviews i wouldn't touch one now. But that's not the worst part for you as a company. The worst part is that, given those reviews after all that marketing talk about reliability and validation when the Vectors were first released, i'm not planning on buying another drive from you ever.
This is what you're up against and it's important that you understand the reality of the situation. Whatever you do do not reply back to this comment with your usual copy/paste response of how the Vector has "really low return rates" and is your "most reliable drive yet". True or not, none of that matters. What matters is _perception_ and the existence of those reviews after all the reliability hype has destroyed the OCZ brand in many people's eyes.
Please understand this it_is_crucial: Your reassurances of the Vectors reliability and low return rates mean _nothing_ at this point, so don't trot them out in response to this reply. Give me something new. Make me believe in OCZ again. Inspire me to go out and buy my ninth drive from you.
Again, thanks for engaging.