Editors' note: This guest column was originally published on Bill Gurley's blog. See his bio below.
Many are speculating that the year 2009 represents a fundamental turning point for the venture capital industry. Some are arguing that the industry is in dire straits after years of poor performance. Others have argued that the math simply does not work for the industry's current size.
You could say it's slimming down.
(Credit: NBC)Another theory suggests that permanent challenges with the market for initial public offerings call into question the fundamental economics of the VC industry. Lastly, some credible authors have suggested that things are so bad that a federal bailout may be in order.
What is really happening in the VC industry? It is indeed quite likely that it is in the process of a very substantial reduction in size, perhaps the first in the history of the industry. However, the specific catalyst for this reduction is not directly related to the issues just mentioned. In order to fully understand what is happening, one must look upstream from the venture capitalists to the source of funds, for that is where the wheels of change are in motion.
VC firms receive the majority of their money from large pension funds, endowments, and foundations that represent some of the largest pools of capital in the world. This "institutional capital" is typically managed by active fund managers who invest with the objective of earning an optimal return in order to meet the needs of the specific institution and/or to grow the size of their overall fund.
These fund managers have one primary tool in their search for optimal returns: deciding which investment categories (referred to as "asset classes") should receive which percentage of the overall capital allocation. This process is known in the financial field as "asset allocation."
Asset allocation is the strategy an investor uses to choose specifically how to divide up capital among asset classes such as stocks, bonds, international stocks, international bonds, real-estate funds, leveraged buyouts (LBOs), venture capital, as well as other obscure classes such as timber funds.
Some of these asset classes, such as stocks and bonds, are known as "liquid assets" because these instruments trade on a daily basis on exchanges around the world. For these assets, investors can be quite sure of the exact value of their holdings, as the price is set continuously in the market. Also, if they need to sell, there is a ready market to accept the trade.
Illiquid assets, also known as alternative assets, include all the other investment classes that do not trade on a daily exchange. These "private" investments (as compared to "public" liquid investments) are considered higher-risk due to their illiquidity, but also are expected to earn a higher return. Some hedge funds are included in alternative assets either because they themselves invest in illiquid investments or because they put strict limitations on the trading capability of the institutional investors, rendering themselves "illiquid."
Asset allocation is a well-studied area within the field of finance. A prototypical United States-based asset allocation model might allocate 25 percent to U.S. stocks, 30 percent to U.S. debt, 25 percent to international equity and debt, and let's say 20 percent to all alternative assets. Within alternative assets, LBOs might be 60 percent, and venture capital could be as low as 10 percent (of the 20 percent). As a result, venture capital could be as low as 2 percent of an institutional fund's overall capital allocation. Most people fail to realize just how small venture capital is in the overall scheme of things.
Very generally speaking, experts and academicians have considered it "conservative" to have a smaller allocation to all alternative assets reflecting the risks of illiquidity, the inability to ascertain price, and the higher difficulty in analyzing the nonstandard vehicles. It is a fairly straightforward, conservative investment approach to favor liquidity and certainty over absolute potential upside (this is the same argument for holding bonds over stocks).
Over the past decade or so, a large number of very influential institutional funds have substantially increased their allocation in alternative assets. In some extreme cases, these investors have taken this allocation from a conservative amount of, say, 15 percent to 20 percent to well more than 50 percent of their fund.
Many people suggest that David Swensen at Yale was the original architect of a strategy to adopt a much higher allocation to alternative assets. Regardless of whether he was the leader, several funds simultaneously adopted this higher-risk, higher-return model. (For a more detailed look at how this evolved and why, see The Wall Street Journal's "Ivy League Schools Learn a Lesson in Liquidity" and Forbes' "How Harvard Investing Superstars Crashed." For an even deeper dive, including comparative asset allocation models, see MoneyShow.com's "Tough Lessons for Harvard and Yale.")
Contributing to this dynamic on the field, the early movers to this model were able to post above-average returns.* Also, due to the high disclosure policy of most universities, these above-average performances were often touted in press releases. This "public benchmarking" put further pressure on competing fund managers who were not seeing equal returns, which, as you might guess, led to them mimicking the same strategy.
As a result, alternative assets have grown quite substantially over the past 10 years. This is perhaps best seen in the size of the overall LBO market. The included chart shows the money raised in the LBO market over the past 30 years. As you can see, the amount of dollars pouring into this category over the past five years is nothing short of breathtaking.
The market contraction of late 2008 and early 2009 severely compromised the high-alternative asset allocation strategy. The liquid portion of the average portfolio contracted as much as 30 percent to 40 percent, which had two resulting impacts. Initially, this resulted in most fund managers having an even higher portion of their funds in illiquid investments. Ironically, this was largely an accounting issue.
Most likely, the illiquid pieces of their portfolio had declined just as much, but as illiquid investments are not valued on a day-to-day basis, they simply were not properly discounted at this point (over time, they would and are eventually coming down). But with one's fund already down 30 percent or so, no one is eager to further decrement the value.
Despite that this may have only been an "accounting" issue, it presented a problem nonetheless, as many fund managers have triggers that force them to reallocate capital, if they go above or below a certain asset allocation. This is one of those policies that encouraged selling at a point that may be the exact wrong time, contributing to further declines.
A second and more complicated problem also emerged. It turns out that when an institutional investor "invests" in an LBO fund, it doesn't actually invest the dollars all at once. Rather, it commits to an investment over time, which is "drawn down" by the LBO manager (venture capital works in the same way, but once again is a much smaller category).
As these funds substantially increased their commitment to the LBO category, they were de facto increasing a guaranteed negative cash flow in the future to meet these draw-downs. Now, with portfolios out of balance, and lack of new liquidity events from the markets for mergers and acquisitions and IPOs, these funds have cash needs (to meet the draw-downs) that are not offset by cash availability. If anything, the universities and endowments these managers represent want more cash now to deal with the difficult overall economic environment.
To meet these new liquidity needs, an institutional investor could:
- Sell more of its liquid securities. This is problematic because it further compromises the target asset allocation.
- Try to sell the LBO commitments on the secondary market. As you might suspect, the secondary market is extremely depressed. Some have even suggested that due to the forward cash need on an early LBO fund, an institution might have to "pay" to get out of the position and to encourage someone else take on the future cash commitment.
- Default on the commitment. While this does have penalties in most cases, it would not be out of the realm of possibilities for this to occur, if the investor has lost faith in the manager, and it is early in the fund (with more cash needs in the future).
- Try to raise more capital. Not surprisingly, donations to foundations and universities are down dramatically due to the overall decline in the capital markets. This makes this strategy unlikely.
As you can see, none of these options is overly compelling.
If this is not bad enough, many institutional fund managers and the groups to which they report (such as a board of trustees) are now second-guessing the high-alternative asset allocation model. As a result, they may desire to return to the more conservative and more traditional asset allocation of 10 percent to 20 percent allocated to alternative assets.
Ironically, they are in no position to rebalance their portfolio precisely because they lack incremental liquidity. Think about it this way: it is very easy to shift a portfolio from liquid assets to illiquid. You simply sell positions in highly liquid securities, and buy or commit to illiquid ones. Going the other way is not so simple, as there is no ability to conveniently exit the illiquid positions.
This is a very long explanation, but the punch line is that as these large institutions adjust their portfolios and potentially abandon these more aggressive strategies, the amount of overall capital committed to alternative assets will undoubtedly shrink. As this happens, the VC industry will shrink in kind.
How much will it go down? It is very hard to say. It would not be surprising for many of these funds to cut their allocation in the category in half, and as a result, it shouldn't be surprising for the VC industry to get cut in half also.
One could argue that poor returns in the VC industry comprise the primary reason the category will shrink and that, as a result, the VC industry could be cut even further--or perhaps even go away. There are two key reasons that this is highly unlikely. First, one of the key tenets of finance theory is the Capital Asset Pricing Model. The CAPM model argues that each investment has a risk, measured as beta, which is correlated with return versus that of the risk-free return.
Venture capital is obviously a high-beta investment category. As of August 3, the S&P 500 has a negative 10-year return. As a higher-beta category, no rational investor could reasonably expect the VC industry as a whole to outperform in a catastrophic overall equity market. In fact, the expectation would be for lower returns than the equity benchmark.
This multiplicative correlation with traditional equity markets is the exact same reason that venture capital outperformed traditional equities in the late 1990s. The bottom line is that no institutional investor should be surprised by the recent below-average performance of the entire category, all things being equal.
The second reason the category will not be abandoned is contrarianism. Most students of financial history have read the famous quote attributed to Warren Buffet, "We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful."
One of the biggest fears of any investor is to abandon an investment at its low point, and then miss the corresponding recovery that would have helped offset previous poor returns. While this mindset will not guarantee the 100-year viability of the VC category, it should act as a governor on any mass exodus of the category. The more people exit, the more the true believers will want to double-down.
So when will this happen? One thing for sure is that it will not happen quickly. The VC industry has low barriers to entry and high barriers to exit. Theoretically, a fund raised in 2008, where all the limited partnerships (LPs) have no plans to commit to their next fund, may still be doing business in 2018. VC funds have long lives, and the point at which they decide to "not continue" is usually when they go to raise a new fund. This would typically be three to five years after they raised their last fund, but could be expanded to five to seven years in a tough market.
In some ways, the process has already started. Stories are starting to pop up about VC funds that were unable to raise their next fund. Also, some entrepreneurs are starting to discuss favoring VCs in whose longevity they can be confident. All in all, one should expect a large number of VC firms to call it quits over the next five years.
How should Silicon Valley think about these changes? It is important to realize that there are approximately 900 active VC firms in the United States alone. If that number fell to 450, it is not clear that the average Silicon Valley resident would take much notice. Another interesting data point can be found in the NVCA data, outlining how much money VCs are investing in start-ups (as opposed to LPs committing to VC firms).
VC firms invested about $3.7 billion (PDF) in the second quarter of 2009. Interestingly, this number is about half of the recent peak of about $8 billion per quarter. It is also quite similar to the investment level in the mid-1990s, prior to both the Internet bubble and the rise of the aggressive asset allocation model. So from that perspective, this, meaning the investment level we see right now in the second quarter of 2009, may be what it is going to be like in the future.
There are many reasons to believe that a reduction in the size of the VC industry will be healthy for the industry overall and should lead to above-average returns in the future. This is not simply because less supply of dollars will give VCs more pricing leverage.
We have seen over and over again how excess capital can lead to crowded emerging markets with as many as five or six VC-backed competitors. Reducing this to two or three players will result in less cutthroat behavior and much healthier returns for all companies and entrepreneurs in the market. Additionally, at a stabilized market size of well more than $15 billion a year, there should be plenty of capital to fund the next Microsoft, eBay, or Google.
* To date, it is unclear if these "above average" returns were a result of the liquid half of these portfolios or the illiquid half. As we mentioned earlier, it is extremely difficult to ascertain the actual value of an illiquid investment. In many cases, the institutional fund manager relies on the investment manager of the asset in which the firm invested to prescribe a value to the investment, even though it may be highly biased. If it turns out that a large portion of the "above average" returns of these early adopters of this more aggressive strategy were on the illiquid side, we may have yet another example of the dangers of mark-to-market accounting.
Unisys may have written Itanium's epitaph on Wednesday--at least for some of the largest server vendors.
Colin Lacey, vice president of Systems and Storage at Unisys, discussed in a phone interview why Unisys--one of the top 10 U.S. server vendors--doesn't see a future for Itanium, including the long-delayed quad-core Itanium "Tukwila" processor.
Lacey said Itanium's appeal has almost vanished for many vendors in server industry. "It's appeal has certainly narrowed down. It's almost exclusively down to a single vendor," he said, referring to Hewlett-Packard. "The current shipping platform is overdue for a technology refresh (and) it's been delayed a couple of times already," he said. In short, Itanium's chronic delays and underwhelming performance mean it's not a viable option anymore for Unisys--which offered Itanium-based servers in the past.
Lacey went on to say that Xeon can be "harnessed" in a high-end server environment to deliver performance that surpasses Itanium with the same reliability. Unisys announced on Wednesday that its newest enterprise server--the ES7000 Model 7600R--has set a record for price/performance in the Transaction Processing Performance Council's (TPC) TPC-H benchmark test. "The performance of the Unisys server, which uses the latest Intel Xeon 6-core processors, shows the increasing superiority of Xeon-based systems for mission-critical applications such as business intelligence over those based on Intel Itanium processors." the Blue Bell, Penn.-based company said in a statement.
Unisys' comments uncannily echo a statement made more than 10 years ago (in 1998) by an analyst who was discussing the long-delayed "Merced" chip--the processor jointly developed by HP and Intel that eventually became Itanium. At that time, an analyst said, "if the performance is similar to Merced," server vendors will opt to "squeeze more profit out of Xeon" instead of adopting Itanium.
Lacey spelled out how Unisys did its testing. "It's not like we're loading the dice. I know that Itanium has only two processors, but the configurations we're comparing have exactly the same number of processor cores. We're comparing 64-core to 64-core. There is no compute engine deficit between one and the other. So, it's looking at the architecture and what works."
With latest generation of Xeon technology "we can deliver pretty compelling raw performance as well as a very significant cost reduction by migrating over to a Xeon architecture. We're talking about a Windows SQL database environment and there's no real pain, if you will, from doing that on Itanium to doing that on Xeon," he said.
At Unisys, there is no significant difference in reliability either, one of Itanium's purported marquee features. "We track the unplanned downtime of our customer base and we track pretty much identical results between Xeon and Itanium architectures with respect to downtime. We don't see any material difference whatsoever and we keep very detailed tracking on that," he said.
Intel, on the other hand, believes both processors offer distinct advantages. "Both platforms offer unique advantages for different needs and applications," Intel spokesman Patrick Ward said Wednesday. "It's great that Unisys is being so aggressive with Xeon's price/performance strengths. Itanium offers terrific scalability and reliability strengths that are a better fit for some of the most mission critical workloads," he added.
Jointly, HP and Intel, not surprisingly, have a different take on Itanium's value for the large enterprise customer. In this video, Intel CEO Paul Otellini and HP CEO Mark Hurd discuss the technology. "Itanium is our architecture for enterprise-class machines. And that's a big segment of the market. About $28 billion. This is a very, very critical architecture for us," Otellini said in the video. "There are things that we're putting into the architecture, the RAS (Reliability, Availability and Serviceability) features, the reliability characteristics, the power-performance characteristics. These are things that we're tuning for the enterprise at the highest end," he said.
"The alliance around Itanium is also unique," Otellini continued. "Multiple operating system environments; 13,000 applications. It's outgrown every other mainframe architecture on the planet over the last five years," he said. "Itanium is about 10 years old now. It's really hitting its stride. It's at the point where we outsell other architectures in Asia. (Sun Microsystems) SPARC and (IBM) Power-based machines," Otellini said. "There are over a thousand silicon engineers at Intel working on this product line," he added.
More details on the Unisys test results can be found in the Unisys February 18 news release.
Google's Chrome now is only a smidgen slower than Mozilla's Firefox on the SunSpider test of JavaScript.
(Credit: CNET News)On Tuesday, Mozilla released Firefox 3.1 beta 2 and Google released Chrome 0.4.154.33, so it's time for the latest installment of JavaScript performance testing.
Here's the highlight: Though Firefox remains the leader on the SunSpider test, with a score of 2,110, Chrome edged very close with 2,140. A lower score is better; because of some variation in results, the numbers I quoted are an average of several runs.
Firefox and Chrome aren't the only browsers out there, but they're interesting to compare for a few reasons. First, they're both open-source projects launched to shake up the establishment with new ideas about the browsing experience. Second, given that philosophical alignment, they're likely to appeal to the same early-adopter crowd. Finally, both have new JavaScript engines, Chrome's V8 and Mozilla's TraceMonkey, which in the new beta is switched on by default.
JavaScript is used to build sophisticated Web sites such as Gmail or Google Docs, but it's also widely used for more ordinary operations, so faster JavaScript performance is desirable. One interesting possibility Google has raised for Web applications though is to bypass JavaScript altogether and use Google's new Native Client software, a research project that lets Web-based software run closer to the speeds of regular software on a computer.
Chrome is making steady gains in Google's JavaScript test; Firefox is much slower and has a mixed record.
(Credit: CNET News)SunSpider is only one test, though; Google has its own JavaScript benchmark on which Chrome wins hands-down. A glitch in the first Firefox beta kept me from testing it on Google's benchmarks, but the new beta runs again, yielding a score of 182. That's lower than the earlier Firefox 3.1 beta's 235 score, so perhaps something is still amiss. Either way, it's a far cry from Chrome 0.4.154.33's score of 2,635.
The usual caveats: your mileage may vary; I ran these tests on a dual-core Lenovo T61 laptop with 3GB of memory and Windows XP. JavaScript is only one aspect of Web browsing performance, and indeed of browsers overall. Also, this software is still in beta, Chrome in particular a developer beta. Finally, I apologize to those who've been asking, but time constraints have kept me from trying the latest WebKit builds and Opera.
According to Mark Larson, Google's Chrome program manager, Chrome 0.4.154.33 fixes a crash when opening the Options dialog box on 64-bit Windows and some issues using Hotmail. "Hotmail still does not properly recognize Google Chrome," though, Larson said in his announcement of the new version, though it can be fooled into thinking it's using a more mainstream browser. For details, check the instructions on the release notes.
The SunSpider test shows Tracemonkey-enabled Firefox leading the newest Chrome build in JavaScript performance--for now at least. Test results reported in seconds, so smaller is better.
(Credit: CNET News)Correction 12:00 p.m. PDT: This report has been updated to reflect Firefox performance with the TraceMonkey JavaScript engine enabled, in which case Firefox is fastest at the SunSpider test.
With new beta versions out for Firefox and Google Chrome, I thought I'd see how things have changed when it comes to testing the speed of JavaScript, the programming language that powers many cutting-edge Web applications such as Gmail and Google Docs. The answer: both browsers made big strides, but Firefox still beats Chrome on one widely-used performance test.
When Chrome was released, I ran Google's JavaScript speed test on Firefox 3.0.1, the initial Chrome beta, Internet Explorer 7 and 8 beta 2, and Safari 3.1.2. Chrome led the speed test with an overall score of 1,851 and Firefox in second place at 205. A bigger score is better on this test.
Running the same test on the latest developer version of Chrome, 0.3.154.3, boosted the browser's score to 2,265--a 22 percent increase. And Firefox jumped 15 percent to 235. Firefox 3.1 beta 1. However, that test measures Firefox without its new TraceMonkey JavaScript engine enabled; a bug in TraceMonkey trips up the test by invoking a print dialog box. (There aren't any new versions of Safari or IE to test, though Safari likely will see a boost from its earlier score of 170 from the SquirrelFish Extreme JavaScript engine.)
In September, Firefox backer Mozilla countered Google's benchmark suite, spotlighting Firefox's superior results using the SunSpider speed test. Here, TraceMonkey works, and Firefox maintains its lead over Chrome and the others.
The newest Chrome beta is 22 percent faster on Google's own JavaScript benchmark. Firefox's performance score increased 15 percent--but that doesn't factor in TraceMonkey, because a bug breaks this test.
(Credit: CNET News)I couldn't run SunSpider when Chrome was released because the site was out of commission that day, but it's up and running again now, so here's the latest results for the four browsers--and bear in mind here that a smaller score is best for SunSpider: TraceMonkey-enabled Firefox led with a score of 2,257; Chrome was second at 2,904; Firefox 3.1 beta 1 with no TraceMonkey next with 4,233; Safari 3.1.2 followed at 6,351; and IE 8 beta brought up the rear with 9,025.
Mozilla's Mike Shaver said the bug that impairs the Google JavaScript test--one reason TraceMonkey isn't enabled by default--should be fixed "soon." For those who want to try the their own tests, Tech-Recipes has useful instructions on how to enable TraceMonkey.
Why you should care
Why does all this matter? A few reasons.
First of all, JavaScript is widely used in innumerable ordinary Web sites, and Internet companies have found that even small improvements in Web page responsiveness increases user interaction with their sites. A snappier response is better for everyone.
Second, for the more avant garde, JavaScript powers many sophisticated Web sites and Web-based applications, endowing them with features such as drag-and-drop, pop-up dialog boxes. Faster JavaScript means companies such as Zoho, Google, and Yahoo can build more features into the Web applications and that users will find those applications easier to use. And these more interfaces are spreading to mainstream sites, too.
Last, on the programming front, JavaScript is vying with other technologies for building rich Internet applications. Microsoft steers developers to Silverlight, Adobe Systems continues to improve its Flash and Flex technology, HTML itself is getting more powerful. And of course there's the larger competition between Web-based applications and those that run directly on the PC, such as Microsoft Office.
A final note: The same benchmark caveats apply this time around, too. Your mileage may vary--my tests were on a dual-core Lenovo T61 with Windows XP. There are other performance attributes that affect Web browsing besides JavaScript performance. And even in the narrower realm of JavaScript, benchmarks like these don't necessarily represent the workloads that will have you pining for a faster machine.
Mozilla fought back on Wednesday with some performance results to show a forthcoming version of Firefox outpacing Google's new Web browser, Chrome.
During a launch event Tuesday, Google was eager to toot its horn about Chrome's performance running JavaScript, a programming language used to power many sophisticated Web applications such as Google Docs, Yahoo's Zimbra e-mail site, and Zoho's online application suite. Google showed performance results using its own collection of five JavaScript benchmarks and V8, Chrome's JavaScript engine, but Mozilla countered with a different test called SunSpider.
Mozilla's speed test shows a future Firefox outpacing Google's Chrome for JavaScript programs.
(Credit: Mozilla)"We're very much in the game and moving fast--'reports of our death are greatly exaggerated,'" JavaScript pioneer and TraceMonkey coder Brendan Eich said in a blog. And noting Firefox's higher score, he said, "Maybe we should rename TraceMonkey 'V10' ;-)"
Firefox 3.1, which Mozilla hopes to release by the end of the year, comes with JavaScript acceleration technology called TraceMonkey. In Mozilla's test that pitted TraceMonkey-enhanced Firefox against the Chrome beta, Google's browser was 28 percent slower on Windows XP and 16 percent slower on Windows Vista.
One caveat is that Mozilla programmers have been talking about SunSpider's obsolescence. I'd like to see TraceMonkey-enhanced Firefox's score on Google's benchmarks, or at least some Mozilla commentary about the quality of Google's benchmark suite. And of course, bear in mind that JavaScript, while important, is only one element of overall browsing performance.
Update 8:16 a.m. PDT: Mozilla's Chris Blizzard directed my attention to this post by John Resig with a broader collection of JavaScript benchmarks. It shows much more balanced results overall, but also shows TraceMonkey faring worse than the current Firefox on Google's tests.
However, Eich said in his post that the TraceMonkey team is addressing the particular issue that hobbled TraceMonkey compared to Chrome.
"(One) graph does show V8 cleaning our clock on a couple of recursion-heavy tests. We have a plan, to trace recursion," he said on the blog. "We simply haven't had enough hours in the day to get to it, but it's 'next.'"
First it was Intel. Now, Big Blue is keen on solid-state drives.
IBM said Thursday it is testing a 4-terabyte, high-speed solid-state drive array targeted at the enterprise, as the technology giant gives its imprimatur to flash-memory-based storage.
For years, flash memory cards--the first mass-market SSDs--have been limited to digital cameras and music players like the iPod. But SSDs are now poised to hit technological critical mass in terms of storage capacity, speed, and availability as they find their way into everything ranging from tiny netbooks to massive enterprise storage arrays.
High-performance enterprise storage is where IBM comes in. Engineers and researchers at the IBM Hursley development lab in England and the Almaden Research Center in California have demonstrated performance results that outperform the world's fastest disk storage solution by more than 250 percent, according to IBM.
Under the rubric Project Quicksilver, IBM coupled solid-state drives with its storage virtualization technology to achieve a sustained data transfer rate of more than 1 million input/output per second (IOPS), with a response time of less than one millisecond in a 4.1-terabyte rack of SSD storage. SSDs are being supplied by Fusion-io.
By comparison, Intel is commercially shipping SSDs (X25-E Extreme) that individually achieve random data reads of 35,000 IOPS and random writes of 3,300 IOPS. In a 3.8-terabyte storage array using 120 SSDs, Intel claims 4.2 million IOPS.
IOPS is a crucial benchmark for large customers that process credit card information or run reservation systems, for example.
"It's feasible that we could get it commercialized within 12 months," said Charlie Andrews, director of product marketing for IBM systems storage. "Right now we have a screaming (fast) system, but there's more work to be done in terms of long-term reliability and integration with systems applications. We don't want to get distracted with 'push the hardware.' We want to focus on the solution piece first," he said.
Compared with the fastest industry benchmarked hard disk drive system, Quicksilver not only improved performance by 250 percent but did this in less than one-twentieth of the response time, one-fifth of the floor space, and with 55 percent of the power and cooling requirements, IBM said.
"Performance improvements of this magnitude can have profound implications for business, allowing two to three times the work to complete in a given time frame for classic workloads," the company said in a statement.
IBM's said its first implementation of solid-state drives was for select IBM BladeCenter servers in June of last year.
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