If you're a movie buff, you're probably getting excited about the eventual release of HD-DVD and/or Blu-ray media (although it would be nice if you guys could settle on one format, OK?).

HD-DVD media, which is supported by many of the movie studios, such as Viacom (NYSE:VIA), Universal, and New Line Cinema, will have a capacity of 30 gigabytes. But Blu-ray, supported by Dell (NASDAQ:DELL) and Apple (NASDAQ:AAPL), along with many other consumer companies, has a larger capacity of 50 gigabytes. Both of these are much larger than a standard DVD capacity (4.7 gigabytes) and will provide enough space to hold movies in high-definition format, plus video clips of the actors' children, I'd imagine.

But guess what? Someday these capacities won't seem very big anymore. Perhaps by the middle of the next decade Blu-ray or HD-DVD will be old-fashioned, and we will be looking toward the next big thing.

The future of data storage
We don't know for certain what technology will be used in future systems, but there is a good chance that the next high-capacity storage medium will be very different. Despite the huge increase in storage capacity of a Blu-ray disc compared with a standard CD, the technologies are basically the same. On both Blu-ray and HD-DVD discs, the data are packed more tightly than on a CD.

Engineers didn't just wake up one morning and decide to do this. The allowable spacing between adjacent chunks of data (called bits) is determined by the wavelength (or color) of the laser used to read the data. We now know how to build reliable diode lasers (OK, we don't, but companies like Sony (NYSE:SNE) and Nichia do) that are violet in color and operate at 405 nanometers, or 405 billionths of a meter. When CDs were first introduced, the lasers that were available operated in the infrared at 780 nanometers. A 405-nanometer laser can be focused to a smaller spot than can a 780-nanometer laser -- meaning that the data can be packed more tightly for the 405-nanometer laser.

Unfortunately, it is much more difficult to build lasers that operate at shorter wavelengths. To squeeze more data onto a disc than either Blu-ray or HD-DVD would require a cheap, reliable laser operating at, say, 300 nanometers or even a smaller wavelength. I won't claim that this breakthrough won't happen, but it seems likely that the need for greater storage capacity will eventually outrun the development of shorter-wavelength diode lasers.

One possibility for greatly increased storage capacity using existing lasers is a Rule Breaking technology called holographic data storage (HDS), which is being pursued by a small private company called InPhase Technologies in Longmont, Colo. InPhase is promising to have a system ready in 2006 that will hold 300 gigabytes of information on a single disc. In case that's not enough, management hopes to eventually increase the capacity to about 1,500 gigabytes (1.5 terabytes). To put this in more familiar terms, 1.5 terabytes of storage is equivalent to about 320 DVDs!

The potential of HDS has been known for decades, and some big companies such as IBM (NYSE:IBM) and Lucent (NYSE:LU) have studied the storage technology, as have researchers at many universities. The greatest of the many problems that have prevented HDS from becoming a reality has been finding a suitable medium to store the data -- and allow for reasonable storage times. You probably expect the movies on your DVDs to be viewable 10 years from now, but data storage times for most materials available for HDS have ranged from a few thousandths of a second to a few days -- at most. If you wanted the storage times to be longer, the storage medium had to be cooled down to temperatures so low that an Antarctic winter would feel sweltering in comparison. Another rather embarrassing problem was that the very act of reading the data gradually erased it.

InPhase claims to have a material (a fancy kind of plastic) that eliminates these problems.

How does holographic data storage work?
Holographic data storage is based on the technique of holography. Holograms can be made of any physical object, but in this case the hologram has to represent digital data (1s and 0s). In order to do this the data are encoded using what is called a spatial light modulator, which is essentially a checkerboard in which each cell can be made either transparent or opaque. A transparent cell may represent a 1, and an opaque cell may represent a 0 (or vice versa, it doesn't matter). The spatial light modulator is illuminated with a laser beam, and the emerging beam then contains the image of this checkerboard. This beam overlaps a second beam (the reference beam) at the location in the disc where the data are to be stored, and the resulting light pattern is the combination of the two beams. The plastic disc is sensitive to light and stores the pattern.

Here is the real gee whiz part. More than one pattern can be stored at the same location on the disc! To do this the angle at which the reference beam hits the disc has to be changed slightly. The very high storage densities are possible because of the large number of checkerboards that can be stored at each location on the disc.

Reading the data after it has been written is simple. Just illuminate the disc with the reference beam. The light that reflects from the disc surface will contain the checkerboard image that was recorded at that particular location and reference beam angle. InPhase uses a checkerboard with around 1 million cells, so 1 million bits of data can be read in one flash of the laser.

Don't bother looking for these systems at Best Buy (NYSE:BBY) next year. InPhase's initial product is targeting commercial users who process lots of images and have a need for huge storage capacities. Nevertheless, a few years down the road (or maybe a decade), systems based on holographic data storage may be available to all of us.

For more on the subject, check out these links:

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Fool contributor Dan Bloom doesn't own shares of any company mentioned in this article, although he used to own Apple. He sold his shares too soon (sigh.). During graduate school he performed research on a material that had the potential to be used to store the data in a holographic data storage system. InPhase made a (correct) decision not to use that particular material.