Intel Optane was launched with great fanfare in 2015, but seems to be slipping further from the radar as we enter 2022. Now storage focused tech news outlet Blocks & Files appears to have found the underlying reason why Intel is rolling back efforts to promote or highlight Optane.
Figures suggest Optane is a massive drain on company finances. In 2020, the last year with complete figures for Optane's income contributions, it inflicted a loss of $576 million, according to numbers from the official 10K SEC filing. Calculations suggest the Optane business has lost more than $500 million again in 2021.
In its report, Blocks & Files checked through Intel's financial filings from the years 2020 and 2021. Intel doesn't always break out figures for the Optane business, but in 2020 it transferred this part of its operations between the Non-Volatile Memory Solutions Group (NSG) and Datacenter Solutions Group (DSG). This flipped the light on operating income in 2020, and allowed the source to fill some gaps (back-calculated figures are in italics in the table).
In the above chart, you can see a loss of $576 million, attributed to Optane business operations in 2020. In 2021, things aren't as clear, as we haven't had any financial event to surface Optane's operating income figures. But using the same ratio of revenues to income in 2021 as we saw in 2020, we might reasonably expect that Intel's Optane business lost around $530 million.
Summing up the financial revelation and speculation above, we can't say for sure that Intel again suffered a bruising loss of more than half a billion dollars thanks to its Optane business in 2021, but the numbers we know certainly don't look good. Still, despite such losses, Optane might be valued by Intel as one way to promote its Xeon servers.
Looking Back at the History of Optane
It is probably fair to say that Optane hasn't really lived up to its potential. The paradigm-shifting technology, which promised to bridge the gulf between DRAM and NAND, thanks to the innovative high-density non-volatile memory technology, vanished from the consumer sphere about a year ago. When Intel begrudgingly admitted that consumer devices were off the menu, the company had been recently supplying Intel Optane Memory H20 for laptop makers.
Last year also saw technology partner Micron give up making products based on the shared 3D Xpoint Technology (Optane is simply Intel's brand for devices packing 3D XPoint). A few months after that news, Micron sold its 3D XPoint Fab to Texas Instruments for $900 million.
So, what went wrong with Optane? At launch, it was promoted as a memory technology with none of the trade-offs of DRAM or NAND. Intel and Micron said the new memory tech could nicely fit that yawning chasm by being fast, cheap, and non-volatile.
But on the consumer side, the first products were low capacity, pricey, and rather underwhelming in some applications. For example, HDDs paired with Optane Cache drives didn't cause much worry for SSD makers. And without mind share from enthusiasts and IT professionals driving its uptick in production, the technology never really caught hold at a scale that could push prices down dramatically, drive software development to optimize for it, and make it a product that consumers and datacenter managers were clamoring for.
Perhaps one day this kind of best-of-both-worlds tech will rise again with more of an impact. Emerging memory technologies, like UltraRAM for example, also attempt to unify memory and storage.
As universities and other institutions continue to work on related technologies, perhaps at some point Intel will earn back large chunks of its investment on patent licensing and we'll eventually get another round of truly stunning storage tech. But until then, for Intel, it seems likely Optane will remain a massive write-off as a technological moonshot that, while technically a success, never really got the adoption necessary to make it successful. But as big as those losses might be, as a company with close to $35 billion in cash as of late 2021, these are still losses that the tech giant can shrug off, as it looks to the next potential breakthrough technology.
