Why Steve Jobs’ Computer Paradigm Shift Prediction Panned Out, and What it Means for the Market

Traditional hard drive manufacturers are currently going through a paradigm shift—one where new solid-state hard drives, known as SSD, are taking market share and slowly eliminating traditional hard drives.  SSD hard drives of one terabyte or more are slowly becoming affordable to the masses.

What is the big deal you ask?  Read onward.

To a computer user, having a solid-state drive can now dramatically increase speed at which data can be written or retrieved from the storage device, which removes one of few remaining performance bottlenecks of the modern laptop and computer marketplace.  While still several hundred dollars more than their traditional hard drive counterparts, the benefits are definitely worth the increased price.

The late Apple Inc. (AAPL) founder and CEO Steve Jobs first stated that SSD drives were the future of computer storage when he introduced the Macbook Air at the “Back to Mac” event in 2010. Rather than being embraced by the computer part supplier community, Seagate Technology PLC (STX) actually actively pushed back against the assertion by Steve Jobs citing the current state of the tiny and market-share metrics.  Based on the current trends I see as I shop for a new power business laptop in 2014, I can say that not only was Steve Jobs completely correct in his identification of a paradigm-shifting trend, but that Seagate now looks almost silly for pushing back in the way that it did then.

This brings to mind Clayton Christensen’s 1997 book The Innovator’s Dilemma: When New Technologies Cause Great Firms to Fail.  The book discusses previous large shifts in the computer storage arena that left competitors flat-footed or worse.  The same thing is happening again now as the top-end SSD makers used by custom computer manufacturers are not traditional hard drive names you know.  It appears that Western Digital (WDC) executives read Christensen’s book and are taking action as they recently acquired VeloBit Inc. to enhance their presence in the growing and rapidly changing SSD marketplace.

The names of the dominant solid-state drive manufacturers are household names like Crucial, Corsair, Intel (INTC) and Samsung.  Most of them, not surprisingly, are the most well-known names in processors, memory chips, and electronic hardware.  This makes sense when you pause to think about it.

We are in an accelerating age of technology convergence where managing business model shifts, convergence, and distribution strategy will lead to a tricky operating environment for all—especially with respect to pricing in the increasingly commoditized traditional hard drive market, the emerging solid-state hard drive market, and future electronics convergence yet to come.  People in other industry spaces need to learn from these events and take action to lead.

To navigate this environment, companies that seek to survive and thrive will need a new breed of business strategy advisor that creates value beyond linear trends.  Those that don’t seek new advisors in disruptive competitive paces will likely perish.  In the end it is about corporate governance and active boards of directors that ask the right business questions.  The future is bright for those who take this responsibility seriously.