Sony did develop the DataMD, but it never caught on. They released it initially in Japan and a few did hit the streets but it was just after Iomega had released the ZIP drive and had caught the market. Sony decided that it wasn't going to compete effectively because it was only 64Mb (versus 100Mb for the Zip)... It was however smaller, faster and cheaper (I think they were idiots cause the ZIP drive was carp).
Now, what I don't understand is why we're not all using SmartMedia as floppy replacements. A 128Mb card is the size of stamp, you can fit ten of them in your wallet, they're fast (1Mb/s) and they can cost less than floppies per Mb... I just don't understand!
Now, with respect to CD-Rs, they cost 10p each, a 48x burner can polish one off in three minutes and they hold up to 900Mb. They're also resilient and long-lasting. In a word, economically unbeatable (which is why the Iomega Zip750 will crash a burn a very quick death)