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Written by Olin Coles   
Saturday, 27 October 2012

OCZ Technology Group Fades To Black

San Jose, California-based OCZ Technology Group, Inc. Begins Layoffs As NASDAQ:OCZ Value Plummets

Once upon a time between 2004-2006, OCZ was a well-known manufacturer of high-end memory components and power supply units that sold under the motto "Founded by Enthusiasts, for Enthusiasts". During the peak economy in 2007, OCZ Technology CEO Ryan Petersen proved his devotion to enthusiasts by purchasing PC Power & Cooling (May 2007), swiftly followed by elite system-builder Hypersonic PC (October 2007). Through the years that followed, OCZ's brand name would successfully sell NVIDIA GeForce graphics cards, overclocker heatsinks, premium thermal pastes, hardcore gaming peripherals, and even a mind-controlled Neural Impulse Actuator (NIA). On March 2008, OCZ Technology revealed the industry's first consumer Solid State Drive - the apex of their dedication towards high-performance computer hardware enthusiasts. The future looked so very bright.

Then the economic collapse found its way into the enthusiast PC market, bringing with it some difficult decisions. First, OCZ cut out non-core product development, including coolers, keyboards, mice, peripheral gaming gear, computer systems, and all the other products not pertaining to memory, solid-state drives (SSDs) and power supply units. This concentrated effort began to reshape their company focus, withdrawing from enthusiast hardware and building itself into an attractive corporation that could be bought and sold on the public stock exchange. Considering the popularity of SSD technology, this could prove beneficial to their financial future.

In preparation for a NASDAQ debut, OCZ made changes. The same company that brought the Neural Impulse Actuator (NIA) to market in 2008, a product that allows gamers to control mouse input with their mind, would sell this intellectual property to BCInet. OCZ would later silently terminate their Hypersonic PC business unit, and abandoned the high-end notebook and desktop computer market completely. Alex Mei, OCZ Technology Group's Executive Vice President and Chief Marketing Officer, had this to say of the matter: "We are focusing all our resources on SSD, PSU and memory and our [system integration] business really did not fit into the spectrum of things".

Then on 24 March 2010, OCZ announced that $15.4-million had been raised from institutional investors through private transactions, which enabled them to list their stock on the OTC Bulletin Board using symbol OCZT. Initially valued at $6.25 per share on 10 February 2010, company stock value suffered a steady decline until the OTCBB stopped trading OCZT on 22 April 2010 with a final price of $4.50. All of this had happened while the relative markets were experiencing 45-day highs.

On 23 April 2010, OCZ Technology Group, Inc. began public trading on the United States NASDAQ stock exchange (NASDAQ:OCZ) with an opening price of $4.70 per share. Perhaps as a sign of things to come, during the first week of public trading on the NASDAQ stock exchange, Ryan Petersen, OCZ's Chief Executive Officer at the time, sold nearly $17,000 of personal stock as disclosed by insider trading reports. The stakes were much higher, as the global economy was stalled at its worst point in the recession, forcing OCZ to make more drastic changes to their business model. Next on the chopping block: DDR3 system memory. 2010 served as the last year OCZ Technology offered RAM to consumers, and the end of an enthusiast era.

ocz_logo_200px.pngBy 2011, OCZ Technology Group, Inc. was in business to sell one thing: solid state drive products. While the power supply segment sustained enough margin to continue sales, the SSD market roared with life due to buyer incentives such as rebates and competitive price adjustments. Using their strength as a SSD-technology pioneer, OCZ would go on to purchase Korean flash-controller manufacturer Indilinx and produce their own in-house solid state drives. The effect of controlling design and manufacture of their own products, along with aggressively targeting costs, gave OCZ an advantage in the consumer storage marketplace. Investors leaped at the stock, and OCZ's share price soared to an all-time high of $10.55 on 15 July 2011.

OCZ's stock value would follow market trends throughout the first quarter, closing at $9.41 on 07 February 2012. Then the revenue warnings began, and forecasts were significantly lower than expected causing a sharp decline in valuation. Starting in June, market prices for OCZ stock closed at $4.17 before attempting a brief comeback. In August, OCZ annouced that their Chief Financial Officer, Arthur F. Knapp Jr., would retire from the company. A few weeks later OCZ would sharply reduce Q2-2013 revenue guidance and on 17 September 2012, OCZ Technology Group's Board of Directors forced the resignation of Ryan Petersen. Stock in OCZ traded at $4.46 on this day.

Nearly one month later OCZ replaced interim-CEO and Chief Marketing Officer Alex Mei with Ralph Schmitt, a member of the company's board of directors since April 2011, as the company's President and Chief Executive Officer. Stock prices plummeted, dropping shares to $1.88 at the end of trading. The worst was yet to come, as several class-action lawsuits would be announced as a reaction to OCZ Technology Group allegedly making misleading statements and misstated financial results. OCZ traded for only $1.24 on 22 October 2012, and some executives were put on notice for lay-off. As of Friday, many of the great minds behind OCZ's enthusiast movement were without work.

ALSO READ: OCZ Technology Group Cuts Workforce and Restructures

Reader Question: What's the best OCZ product you've ever owned?


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Comments 

 
# MrJean Olbrechts 2012-10-27 14:23
As a vision systems integrator, since 1979... i like the OCZ RevoDrive3 x2 480GB for my main computer.

Use OCZ RevoDrive3 x2 240GB for several projects !
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# RE: OCZ Technology: From SSDs to LayoffsiFLAME 2012-10-27 14:40
Well, this is another sad news coming at a difficult period; PC hardware market has seen better times for sure :( I never knew OCZ was in that short of shape lately which makes me wonder about the state of health of the entire SSD market. Irony it may seem that their mechanical counterparts are reporting record numbers despite last year's disaster (though I'm sure Hitachi and Samsung saw things from a different angle)!

Anyway, betting it all on SSDs always was a bad idea for OCZ's part and even with its Indilinx acquisition OCZ never quite became the vendor it wanted to be. I also recall reading something about a failed Sandforce deal. Whatever the case maybe, OCZ's never quite delivered in term of reliability. I don't have any Vertex or agility in my systems, but heard lots of complains from those who had!

I've owned several OCZ Gold modules most of which are still in service :)
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# My best OCZ productRonald 2012-10-27 14:41
My best OCZ product? Easy! OCZ Agility 3 SSD 64GB. Died in 2 weeks. I used the warranty and received a replacement. After using it for a 3 weeks, the replacement SSD died. I gave up and I didn't even try to claim for another replacement. At that time, that SSD was around $120. What a waste of money. How come it is my best OCZ product? Lets just say my first and my last OCZ product! My best and my worst.
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# Dudesoundx98 2012-10-27 15:28
If the Sandforce drives would not have had issues, Ryan Peterson could run for President. But that's what happens when s*** happens. Close to success but no banana.
I've used their Memory and PSUs in hundreds of builds. Sorry to her this turn of events. They've always had awesome product support.
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# OK so farRealNeil 2012-10-27 19:14
I have a Solid and two Agility SSD's and so far, they're good to go. (fingers crossed)
To be fair, I have a Kingston Hyper-X and a Mushkin Chronos SSDs that are top notch too.
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# RE: OCZ Technology: From SSDs to Layoffskzinti1 2012-10-27 19:42
Simple. None. The memory modules I bought were RMA'd several times and finally refunded by NewEgg well after the 30 day cutoff. The only reason they did this was due to the overly large amount of other customers requesting a like refund.
I haven't a clue as to why NewEgg continued selling OCZ products. I imagine they were counting on people not requesting a refund. OCZ has always been a rather shady company, always referring customers with problems as to their products to a "Forum", as they were too inept to provide proper Customer Service themselves.
Good riddance OCZ. You've earned every bad thing that's happened. And more. May the failure of your executives follow them forever.
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# RE: OCZ Technology: From SSDs to LayoffsServando Silva 2012-10-27 21:43
My best product was probably my old but trusty Winbond DDR1 RAM. From originally 400MHz, and up to 550MHz with lots of voltage and 2-2-2-5 latencies.

Sad news for the enthusiast market, but nothing that wasn't expected at this time.
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# Semblence of orderWiseguy 2012-10-27 22:08
Tech is a weathered market. Media access allows trends to move across the world faster than the wind. Most companies are happy just to keep up. Some have no choice but to follow. A rare few put a massive amount of risk riding the very wave as it crashes against our brains for the first time. It takes a lot of effort and sacrifice. Sometimes, it turns out to be nothing more than a momentary success. OCZ was bold, no arguing that. A series of strange decisions couldn't been made at a more inopportune time thanks to the economy. The moral: lead, follow, or get out of the way. (Final OCZ product is some Vertex 3/4 SSDs)
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# 0 for 2mike 2012-10-28 04:06
I have purchased two Ocz products memory and a ssd drive, both had to be replaced by rma. The replacements are working fine but having to pay for shipping twice will stop me from ever buying ocz products again.
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# RE: OCZ Technology: From SSDs to LayoffsJeanlou 2012-10-28 04:28
I'm surprisec about the several negative comments about OCZ !
Before i decided to use OCZ cards, i bougth only one and spend hours to check it.
Installed several Windows versions, added apps,mede secure erase 3 times,reinstalled windows plus apps, and always the same performances via OTTO !

Maybe you don't respect the rules to made it running asavely at the top ?
As i already said, i have 3 computers with RevoDrive3 x2 which are running since several mounths with high satisfaction, no problems at all !

As an exemple, i decided to copy one original Adobe PhotoShop Extreme CS4 DVD on a intern HDD.
It took time to uncompress the files, but when done, i clicked SetUp ansd the full application was installed on the RevoDrive3 x2 into...
30 seconds !!!

Started PhotoShop from OCZ ... complet instaled and worked perfectly.

Try it on an any other drive, and tell me your experience please.

Regards, Jeanlou
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# Terry RowlettTerry Rowlett 2012-10-28 12:21
I have several replacement OCZ SSD's and they all perform flawlessly as high-end enthusiast paper weights. If you want a dependable SSD, I'd recommend looking elsewhere, but as paper weights you won't find a cooler brand than OCZ!
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# 2 OCZ drives hereJack McMillen 2012-10-28 16:14
I've had nothing but good experiences with OCZ drives. Vertex 3 on the original FW and a Vertex 4.

Sounds like Sandforce really hurt OCZ's reputation.
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# OCZ.......Sad TimesChristopher Fields 2012-10-28 19:17
I have been purchasing OCZ Products since 2003. OCZ IMO was an enthusiast brand and for the most part was very premium. In 2005 I became a "Direct Partner". My company built custom gaming machines and we used everything OCZ had to offer because gamers wanted that. In Dec 2009 I got my hands on one of OCZ's 1st Phase cooling units. I pre-purchased (10 units at $575 each) and marketed the phase coolers. March 2010 I received an email that I would not be receiving the phase coolers with no explanation. About 6 weeks later I received a refund on my units.

Since OCZ has been selling SSD's, I have returned over 70% of SSD's sold to cutomers, in return making no profit. I am not surprised about this headline. January of this year 2012 I quit purchasing SSD's from OCZ and joined a soon to be class action lawsuit for selling an inferior product. My company lost customers and revenue in 2011 that we had never experienced before. We had several SSD's in Enterprise based servers that failed by numbers that were unreal. My company spent over $70k in data recovery last year because we lacked the resources to recover data on dead SSD's.

I feel bad for the folks at OCZ, too bad they didn't know Obama, he could have bailed them out, lol. I miss the reps I dealt with there and I know several quit and were laid off last year and this year. I wish the best for the company and hope someone can find a way to pull them out of this misfortune.

Thanks for the article, as always, well written.
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# Very sorry to hear ...Terry Rowlett 2012-10-28 20:59
Thanks for sharing a business perspective on this issue. As retail customers, we probably don't think much about how it can affect business partners.

Sorry for the difficulties and best wishes.
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# RE: OCZ Technology: From SSDs to Layoffsggm 2012-10-28 19:29
OCZ always made good, innovative products, but then lost the plot. G.Skill have take over OCZ's place in the memory business (and they too will probably suffer the same fate over the next few years). And OCZ ruled the SSD world until Intel decided to wipe the floor with them. It's sad because OCZ were the main driving force behind the rise of the SSD in the consumer market. I think we'll see the same happen to a few other companies - Scythe are almost certain to go, Prolimatech, Xigmatek all seem to be dying.
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# RE: RE: OCZ Technology: From SSDs to LayoffsPeteG 2012-10-29 01:37
Add Thermalright to the list of dying companies.... their website doesnt look like it's been updated in months.
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# RE: RE: RE: OCZ Technology: From SSDs to LayoffsDavid Ramsey 2012-10-29 07:59
According to notices on their home page, they posted new stuff as recently as 8/15.
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# RE: RE: RE: RE: OCZ Technology: From SSDs to LayoffsOlin Coles 2012-10-29 08:10
Nobody has claimed OCZ is out of business.
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# RE: OCZ Technology: From SSDs to LayoffsMatt 2012-10-29 18:52
I've read lots of complaints about OCZ products but have never had a single problem myself. I have owned 5 Agility 2 drives, 1 Vertex 2, 1 Vertex 3, 15 Vertex 4's, a Z-Drive R4 PCIe SSD, and run their VXL software since beta and have never had a single problem... In fact, 4 of my Agility 2 drives have been running in 2 of my workstations in RAID 0 configuration for over 2 years without issue. Every single SSD I own is an OCZ SSD and they are all blazing fast and were reasonably priced. I am an IT professional and computer engineer and I would order another OCZ SSD in a heartbeat. I can't believe no one else sees the value in these drives and in this company. It is such a shame to see everything falling apart the way it is. Their products and software are rock solid. Hopefully the new management and restructuring can bring this innovative and game changing company back to life!!! My favorite OCZ product = Z-Drive R4 + VXL!!!
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