IBM’s Billion Dollar Bet

IBM (NYSE:IBM) is betting that flash storage will replace hard drives in the near future, and is backing it up with a $1 billion investment in research and development. While the claims about flash’s cost-effectiveness are disputed by many experts, IBM made its case for the technology while unveiling a new line of devices called FlashSystem at a New York press conference.

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Most businesses rely on hard drives for storage, yet IBM is gambling that this inefficient service will be replaced in the near future by solid-state storage, which operates much faster and can handle larger workloads without sapping a great deal of energy. An IBM senior VP said Thursday, “There is no question that flash is the most economical solution to the business problem when…[it] calls for that class of technology.”

In fact, IBM appears to have been planning a move into solid-state storage platforms for some time. The acquisition of Texas Memory Systems (NYSE:TMS) last year gave the company access to arrays that were exclusive to the storage-pioneering company (TMS was selling its products as early as 2005). Now IBM is upping its game and opening 12 centers for flash systems development along with its new products.

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