Seagate Scores a Hard Disk Counterpunch

Arthur Cole
Slide Show

Changing the Way You Purchase Storage

Ensure that IT has the flexibility to build and efficiently run a shared infrastructure.

Consolidation within the hard disk market continues at a steady clip, evidence that 1) spinning media still has a vital role to play in advanced data environments, and 2) profit margins, and thus costs, will continue to fall.

The latest round in this ongoing trend is Seagate's pending acquisition of Samsung's HDD operations, part of a broader deal between the two companies valued at a total $1.375 billion. The cash/stock deal will leave Samsung with about 45 million in Seagate stock, nearly 10 percent, ensuring that Seagate will continue to provide Samsung with hard drives needed for its computer and consumer electronics products.

On the flip side, Samsung has agreed to provide NAND flash memory modules for use in Seagate's enterprise SSDs and other systems. As well, the two companies have extended an existing patent cross-licensing pact that covers a range of advanced technologies. Samsung also gets a seat on Seagate's board of directors.

The deal appears to be a win-win for both companies, considering Samsung gets to unload a money-losing entity to a firm that can, arguably, provide a more sustainable business plan. At the same time, Seagate now has a counter to arch-rival Western Digital's move last month to take over Hitachi Global Storage Technologies-a $4.3 billion deal that puts nearly half the hard disk market under WD's belt.

Why all this sudden interest in HDDs, however? After all, aren't most of the headlines these days touting all the wonderful things SSDs can do? Perhaps, but as any market analyst will tell you, demand for hard disks will continue unabated for some time. In an era when data loads are increasing exponentially, so too is the need for cheap, reliable storage.

In fact, many of the latest storage platforms are incorporating mixed SSD/HDD technologies to take advantage of their unique speed and bulk storage benefits. Teradata has adopted a hybrid approach in the latest versions of the Active Enterprise Data Warehouse (Active EDW) platform. By tying both media types to an active, intelligent storage management stack, the system can dynamically analyze data sets for storage in the most optimal setting.

That's a pattern you're likely to see across the storage environment in the coming years-SSDs for high-speed, transactional data and HDDs for longer-term bulk storage. For storage vendors like Seagate and Western Digital, then, success won't come from dominance in any one technology, but from how well their respective drives can be integrated into comprehensive, working solutions.

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