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Technology Stocks : Seagate Technology

STX 255.88

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Oct 31 4:00 PM EDT

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From: Sam	1/11/2015 11:31:59 PM
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Interesting piece from Chris Mellor-- BOOM! Seagate attacks storage array hardware market 'DEHHINO' tech titans must go all-flash to survive 9 Jan 2015 at 09:01, Chris Mellor theregister.co.uk excerpt: What Seagate saw, when it bought Xyratex, was that the confluence of Big Data with HPC-style storage could provide growth and higher margins if it sold raw drives to hyperscalers and Big Data arrays to business. And this would compensate for the loss of the premium performance disk drive business to SSDs and all-flash arrays. This strategy became detectable last year. Now it's out in the open. Barron's reports from CES in Las Vegas that Seagate CEO and chairman Steve Luczo now sees that Seagate (and WD) could take over the hardware storage array business from the DEHHINO group, with them changing into software-focussed businesses. He is quoted as saying that the "traditional OEMs are coming to us because they are caught in the middle between the CSPs (Cloud Service Providers, like Amazon) and the component makers ... a company such as an EMC would say 'We are a software company and that means we don’t really want to do the hardware long term'." The ClusterStor business is growing, with Luczo commenting that: "I think that business will be on a billion-dollar run rate in a year from now.” WD's HGST unit is doing what Seagate is doing, and moving into high-capacity, scale-out systems with its Active Archive object storage array being built with Amplidata technology. For the DEHHINO suppliers the invasion of their hardware business turf by Seagate and WD/HGST is not good news. This is massively disruptive. It is unlikely, highly unlikely we think, that billions of dollars of array hardware revenues can be transferred to software, meaning they face their core businesses becoming smaller businesses. more at the link

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