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Bob Fontana, research member at IBM’s Almaden Research Center in San Jose, Calif., is only half joking when he says Silicon Valley should have been called Iron Oxide Valley. Or even Rust Valley. Because for Fontana, it’s iron oxide-the original material used to coat the disk drives that store magnetic bits of information-that fueled the growth of Silicon Valley.

Of course, he may be a little biased. IBM invented the disk drive in San Jose in 1956, when this part of the world was better known for cherry orchards than industrial parks. Since then, Almaden researchers have repeatedly smashed the record for how much data can be stored on a disk. They were up to their old tricks again last December, when Fontana and his colleagues squeezed more than 11 billion bits (gigabits) onto a single square inch of magnetic material. That more than doubled the previous record of 5 billion bits per square inch, set in the same lab only a year earlier. How much is 11 billion bits? It’s roughly equivalent to 725,000 pages of double-spaced text, which would stack up higher than an 18-story building. By any measure, this was a great scientific achievement.

This leapfrogging has had a dramatic effect on what personal computers can do. It is these huge capacity hard drives that have made it practical for computer users to keep large amounts of extremely sophisticated software on their machines, for example. Vast hard disks have also fostered the transformation of computing from a textual activity to one filled with pictures and sounds. What’s more, the way the disk-drive project is managed highlights an effort by IBM to recouple basic research to product development in the service of innovation.

Almaden’s accomplishments are by now so well accepted in the world of computing that the announcement in December of yet another new record didn’t make big headlines. Even competitors shrugged. “Everyone in the audience was saying, sure, that’s what we’ve been waiting to hear,” says Gordon Knight, chief technical officer for TeraStor, a Silicon Valley startup that is championing a different kind of storage technology than IBM’s. But beneath this calm surface of expectations fulfilled lies a surprising story.

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