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OCZ Vertex 3 Pro
Strong SSD revenues prompt OCZ to quickly abandon DRAM products

When it comes to performance upgrades for computing systems, enthusiasts have been moving in large numbers to solid state drives. Upgrading a system from an "archaic" hard disk drive (HDD) to a solid state drive (SSD) can make an immediate difference in boot speeds, application launch times, and overall system performance.

OCZ Technology, once primarily known for its DRAM/memory products, has in recent years expanded its product portfolio to include cooling products and power supplies. Another product category that has seen large gains for the company has been the SSD market.

OCZ Technology saw a 325 percent increase in revenues from its SSD business for fiscal Q3 2011 versus the previous year. Q3 2011 SSD revenues were also up 105 percent compared to Q2 2011. 

"SSD revenue accounted for 78% of our revenue and just by itself exceeds our historical quarterly revenue totals across all categories, thus reinforcing our decision to discontinue our remaining DRAM products," said OCZ Technology CEO Ryan Peterson. 

Thanks to the strong performance of its SSD portfolio, and the overall weakness in the global DRAM market, OCZ is accelerating its plans to exit the DRAM market.

"We still have some commitment on the memory side moving forward and will continue with certain SKUs for a period of time, but the amount of memory sales are going to be non-material to our overall business," said OCZ CMO Alex Mei in a phone interview with DailyTech. "Memory sales continues to shrink as an overall portion of our business to the point where it was not as significant."

OCZ showcased its SSD prowess last week with the announcement of the Vertex 3 Pro SSD family. The new drives feature a SandForce SF-2582 SATA III/6Gbps compliant controller that provides maximum read speeds of 550MB/sec and maximum write speeds of 525MB/sec.



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By RussianSensation on 1/10/2011 6:50:45 PM , Rating: 2
I remember the excellent DDR1 and DDR2 OCZ that many overclockers would be after. Their Platinum Rev. 2 DDR2 chips were excellent. Even if OCZ remained in the memory business, their DDR3 offerings were completely uncompetitive with Corsair, Mushkin and G.Skill kits, among many others. Not sure what happened but OCZ was no longer the choice of enthusiasts.

Their PSUs is another example of them losing their competitive advantage. Not sure it's such a great strategy to have only 1 great product line in SSDs. There is no diversification at all. Pretty risky from a business perspective for long-term imo.




RE: Starting with DDR3, OCZ was no longer competitive
By bug77 on 1/10/2011 7:03:53 PM , Rating: 3
I'm not sure, but I have the feeling memory overclocking itself has died-out. L3 cache has killed the need for super-tight timings or tons of bandwidth. They're still important, but for day-to-day use stock memory is absolutely fine.
Oh, and I haven't heard of any IC to raise to the fame of TCCD. Still, all ICs are now DDR3-1333, yet many are sold as DDR3-2133, so the overclocking potential seems to be there. Maybe I just fell out of the loop.


By vol7ron on 1/10/2011 10:42:25 PM , Rating: 2
Did OCZ just rebadge the DRAM or did they manufacture the chips? I'm guessing they just improved Samsung DIMMs?

Still, wouldn't it make sense to keep at least some memory options open? To produce SSDs, you need some DRAM - my guess is this is going to be another performance bottleneck in the future. If OCZ is purchasing it, I'm sure they might want to keep some discounts to offer more affordable SSDs.


RE: Starting with DDR3, OCZ was no longer competitive
By bug77 on 1/11/2011 5:31:07 AM , Rating: 2
Only a handful (Samsung, Crucial/Micron) of memory makers produce their own chips. A third party can only perform a more thorough selection on IC batches and then cherry-pick - everybody does this.

As for keeping options open, I'm sure they thought about it. It's probably not worth it at this time (due to low-margins or whatever).


By azander on 1/11/2011 7:38:16 PM , Rating: 4
Hi guys, as this is the first post in this article let me identify myslef as Alex at OCZ Technology. I appreciate everyone's comments and just wanted to chime in.

bug77 is absolutely right, just a few fabs produce the IC's and we would screen those IC's and build them on our own SMT lines then handtesting the built modules for performance and pairing into dual channel kits. There was a time when we could add a lot value to memory modules via latencies, max speed or sheer density but with the low margins it really didn’t make sense, especially when with the advancement of platforms other areas became more of the bottleneck including mass storage.


By bug77 on 1/12/2011 5:28:03 AM , Rating: 2
Hey, SSD is still memory, so I'm glad you guys are still around.


By Lazarus Dark on 1/10/2011 7:38:36 PM , Rating: 2
I put OCZ ddr2 in several builds and they had some really great overclocker memory, but yeah, I think with changes in processors and such, overclocker memory is less important for ddr3 (actually overclocking in general seems to have declined, as I think stock speeds finally caught up with software)


By spathotan on 1/10/2011 8:52:22 PM , Rating: 1
Agree. The need for overclocking is quickly declining (it was never important to begin with). Why risk damaging expensive hardware when a 400mhz Turbo Boost can automatically OC for you without the risk and hassle.


By mindless1 on 1/13/2011 7:47:05 AM , Rating: 2
Not entirely true, done correctly overclocking is quite similar to merely buying the more expensive CPU and since we do see that more than one CPU price exists, obviously some people feel it is worth paying more for performance while others manage to get that for free from an o'c.

If you can't do it safely then maybe you are risking damage, but that does not make it inherently risky it is just a matter of restricting oneself to what the individual is competent doing... same as mowing the yard, walking and chewing gum at the same time, etc.


By azander on 1/11/2011 9:12:02 PM , Rating: 2
Hi Lazarus Dark, very good point. Today’s platforms and software have advanced a great deal and while there is absolutely a need for memory there are other areas in the system architecture where bottlenecks are exposed such as with mass storage. Traditional rotational media has been around a long time and so has solid state storage, only it hasn’t been “affordable.” With all the improvements in NAND processes and the technology finally within reach of consumers the timing is right for SSDs. I personally am very excited about solid state drives because this is a technology that users can really “feel” the difference with the minute they boot up their system or run an application.


By Flunk on 1/10/2011 10:59:54 PM , Rating: 2
Now more than ever, overclocking RAM no longer matters. With the Sandy Bridge chips featuring a fixed frequency bus. The RAM frequency and CPU frequency are no longer linked and the gain in performance you'll get from faster RAM is negligible at best.


By Dribble on 1/11/2011 10:17:23 AM , Rating: 2
I never wanted the *very* fastest memory, just fast and cheap. OCZ gold filled that slot - always worked fine for me, was always pretty cheap and fairly fast. Did the job, I'll be sad they are gone.


By azander on 1/11/2011 7:41:20 PM , Rating: 2
I appreciate the comments Dribble, OCZ Gold is one of my favorite products as it represented the best bang for the buck. In the short term we will continue to sell modules and we do have a few kits that will continue to be available through the wind down period. No matter what all warranties will be honored and we will take care of all our customers.


RE: Starting with DDR3, OCZ was no longer competitive
By CZroe on 1/11/2011 12:09:17 PM , Rating: 2
On my first Athlon X2 system I had OCZ DDR400 modules that were on the manufacturer's tested and recommended list for an Abit SLI board and yet games would blue-screen and the system would randomly crash unless they were under-clocked. Corsair ValueRAM was fine. Memtest confirms. The same modules worked great in an Intel P4 system (FIC Condor HTPC). This annoyed me greatly.


By azander on 1/11/2011 7:53:13 PM , Rating: 2
Hi CZroe, thanks for the comments and sorry to hear about the instability. The only reason I’m commenting here is I saw your system, the FIC Condor, and it immediately brought back a ton of memories for me. At that time I was actually in charge of marketing at FIC and the Condor was one of the products I launched here in the U.S., I’ll never forget that little box and the swing open latch design…that’s a classic now. =)


2010 not 2011
By bdot on 1/10/2011 6:20:50 PM , Rating: 3
quote:
OCZ Technology saw a 325 percent increase in revenues from its SSD business for fiscal Q3 2011 versus the previous year. Q3 2011 SSD revenues were also up 105 percent compared to Q2 2011.


Reporting from the future I see..




RE: 2010 not 2011
By Brandon Hill (blog) on 1/10/2011 6:27:54 PM , Rating: 3
"fiscal Q3"


RE: 2010 not 2011
By jarman on 1/11/2011 10:11:10 AM , Rating: 2
"fiscal Q3" 2011 = Apr-Jun 2011


RE: 2010 not 2011
By AnnihilatorX on 1/11/2011 6:36:58 PM , Rating: 2
Lol check your facts
http://en.wikipedia.org/wiki/Fiscal_year

quote:
For example, the United States government fiscal year for 2011 ("FY 2011" or "FY11") is as follows:
* 1st Quarter: October 1, 2010 - December 31, 2010
* 2nd Quarter: January 1, 2011 - March 31, 2011
* 3rd Quarter: April 1, 2011 - June 30, 2011
* 4th Quarter: July 1, 2011 - September 30, 2011


RE: 2010 not 2011
By chiadog on 1/12/2011 4:21:14 AM , Rating: 3
quote:
Fiscal years vary between businesses and countries.

You've missed an important part from your link.


By Taft12 on 1/10/2011 11:22:39 PM , Rating: 2
They may be de-emphasizing memory, but I don't expect any less focus on jumbo mail-in rebates with many bogus rejections and quickly-changing "rebate handling" companies (shell companies to stay one step ahead of the BBB, and a convenient scapegoat for OCZ to proclaim "not our problem").

Stop these games and I will consider your products.




By angryplayer on 1/11/2011 12:05:21 AM , Rating: 2
As if stock OCZ prices aren't cheap enough. I agree with most other posters here, they've fallen behind on DDR3 and even their DDR2 was competitive at best. The biggest reason I chose them is because their prices were good (even BEFORE mail-in rebates and they have a distro centre local to me, so I can get an RMA for the tiniest fault same day.


By azander on 1/11/2011 8:48:32 PM , Rating: 2
Hi Taft12, thanks for your comments and understand what you’re saying in regards to MIRs and we want to make sure customers get their rebates. Unlike many other companies we have a MIR resolution team in house. That means if any customers have any problems with MIR’s they can contact an OCZ team member that will then follow up with the MIR house directly to make sure rebates are properly processed. The contact info is on the bottom on our contact page here: http://www.ocztechnology.com/contact/


By mindless1 on 1/13/2011 7:54:06 AM , Rating: 2
I've received every single OCZ rebate I've sent in. If you are implying that is unusual I have to assume you are incapable of following fairly normal directions on rebate forms then trying to place blame elsewhere when terms are not complied with.

The great myth you are trying to perpetuate is that prices would be lower without rebates. At any point you are welcome to buy a product which has no rebate offered or choose not to send in a rebate on a product featuring one.

It's entirely up to you. If you can't fill out a rebate then by all means don't waste your time trying (though practice makes perfect).


Holy Crap!
By AstroCreep on 1/10/2011 8:28:36 PM , Rating: 2
I find this fairly surprising. My understanding is that the DRAM business is quite "cutthroat" (why most DRAM makers also sell other products), but seeing that not only are classic DRAM manufacturers getting in to the SSD business (OCZ, Kingston, Micron/Crucial, Corsair), but so are HDD companies (Western Digital) and big-daddy of microchip companies, Intel...I can see the SSD business becoming equally cutthroat.

I can understand shifting "Focus" of your company, but getting out of the market that made you famous, to focus on a market that looks like it will be full of the "Me Too" companies...I just have to question that decision.
Yes, they still sell and market other products, but damn...




RE: Holy Crap!
By vol7ron on 1/10/2011 10:47:05 PM , Rating: 2
It might be equally cutthroat, but it is still new and there are many ways to refine it. It's probably the best opportunity any company has had in a number of years. It might not be smart to do away with another market entirely, but it's probably very lucrative to get out in front in SSD market, especially since SSDs will be used in mobile devices, which is really the market of today and tomorrow.

There are more mobile devices then desktops and they sell at a higher profit margin. From a company standpoint, why wouldn't you try to get in on that? It's the goldrush of the millenium.


RE: Holy Crap!
By azander on 1/11/2011 8:42:23 PM , Rating: 2
Thanks for the comments both AstroCreep and vol7ron, all good points. SSD’s have been replacing our memory segment for quite some time now and we have had a lot of growth both on the consumer and enterprise side. That said I totally hear you and one thing I always say is that memory is one of the reasons why we are a leader in the space currently, it’s a major part of why we had the ability to jump into this arena so quickly. There are many synergies between the product lines from a procurement, design and manufacturing standpoint. At the end of the day we feel we can add more value to consumers in the SSD segment and you can see we are innovating much like we did when we started producing memory. With products like the RevoDrive and IBIS (HSDL) we are coming out with solutions that really push the storage envelope and we hope to continue that trend.


Only a temporary high
By semo on 1/11/2011 3:36:36 AM , Rating: 1
All credit to OCZ for spotting something good rubbing it in naysayers' noses but the fact is that any tom dick and harry it seems can make an SSDs these days (just like RAM).

What if the SSD market turns into something like the HDD one where the manufacturers brand their own products? Imagine sandforce is bought by Seagate, IMFT becomes IFT and Toshiba stops selling its SSD parts to other companies.

I think OCZ are thinking short term. Or are they planning to start designing their own controllers/firmware perhaps?




RE: Only a temporary high
By Beenthere on 1/11/2011 7:36:56 AM , Rating: 2
I suspect OCZ is thinking how can we save a sinking ship? I suspect they will be gone in a year or so.


RE: Only a temporary high
By azander on 1/11/2011 8:58:07 PM , Rating: 2
Hi semo, thanks for your comments. There is no doubt that SSDs will become more mainstream, and we are actually constantly focusing on both improving performance as well as driving down price to make SSDs more affordable to mainstream consumers. The price per GB for SSDs in general has come down a great deal making them a much more viable option for more consumers, and that helps foster more adoption.

While I can’t comment too much on development details I can say we will be coming out with more products beyond just the SATA and PCIe interface and we already have a firmware team that works on both client and enterprise solutions. There are still a lot of ways to add value for clients with solid state drives including performance, enhanced reliability, custom interfaces and form factors just to name a few.


Not surprising given margins
By NARC4457 on 1/10/2011 7:29:57 PM , Rating: 2
The way memory prices are still fairly low, I can't say that I'm surprised when I sit back and think about it. DDR3 dropped significantly faster than DDR2 did when first introduced. A 4GB (2x2GB) DDR3 is going for $40 on the low end, which is a great price.

Pure conjecture on my part, but I would think margins on memory to be 10% or less. Clearly, it's much higher on SSDs since they are so new, and there is still a lot of innovation in the market. My guess is they are north of a 30% average across their SSD product line; higher on the top end (Sandforce 1500) of course.




RE: Not surprising given margins
By zodiacfml on 1/11/2011 10:19:00 AM , Rating: 2
same as yours..


Shaky for sure
By Beenthere on 1/10/11, Rating: 0
RE: Shaky for sure
By RussianSensation on 1/11/2011 11:33:11 PM , Rating: 2
I don't think you can use evidence of some failed drives online as an indication of the overall failure rate for the product. For example, if 10 people complain that their Ford's have broken, are we to assume Ford makes unreliable cars? How many out of 1000 people whose Ford doesn't break will go out of their way to post a positive review about it? You are much more likely to complain if the product has failed.

Also, the consumers are clearly seeing value in OCZ's SSDs. Given the fact that solid-state drives (SSDs) accounted for about 78% of the company's revenue, whereas memory, flash media and PSUs accounted for 22% of the company's earnings, the decision was not a difficult one to make. My point still stands about being concentrated so significantly in 1 market segment. However, if OCZ expands their offerings of SSDs (figures out how to add Trim support for their RAID PCIe SSDs) and offers the fastest drives on the market, as well as caters to mainstream and value customers, they could become the new Seagate/WD of the SSD market.


Margins...
By haukionkannel on 1/11/2011 1:08:20 PM , Rating: 2
What this article allso says is that SSD's have very good profit margins, so we really need more competition in this area. The products seems to be cheap enough to produce...
... Well maybe in couple of years there will be allso price competition beside speed competition.
But can not complain too much. SSD's are really getting guite good and are a little by little closer to mainstream!




On the bright side
By YashBudini on 1/12/2011 8:08:31 PM , Rating: 2
Hopefully they will exit the "rebate du jour" market as well.

[/rolling eyes]




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