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Technology Stocks : Seagate Technology - Fundamentals
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To: Stitch who wrote (683)3/18/1999 12:01:00 PM
From: Sam  Read Replies (1) of 1989
 
Stitch,
Thanks for the Takata piece. Here is one from Computer Reseller News, discussing the Barracuda 50, as well as 7200 and 10,000 rpm drives from other vendors.


March 15, 1999, Issue: 833
Section: CRN Test Center

Editor's Choice -- Seagate Barracuda 50 can hook profits

The CRN Test Center gave its Editors' Choice award to Seagate Technology Inc.'s Barracuda 50.
This hard-disk drive packs a 50-Gbyte wallop that is not only fast but also profitable for VARs.
For those who recall when 50 Mbytes was astonishing, this drive will leave you speechless.
Seagate, which won the CRN Test Center's Ultra SCSI hard-disk drive roundup last year, really
delivers with this one.

Like most other vendors in this roundup, Seagate has honed its reseller programs to be more in
touch with the front line. The company has dropped some distributors to instead devote resources
to a field sales team, which is tasked with increasing leads as well as visibility. As with other
vendors, Seagate now specifically targets the burgeoning reseller white-box sector and hints that it
may have new offerings for this price-sensitive market. Seagate is the only vendor to promote a
trade-in option on used drives of any manufacturer. Seagate has partnered with a company that
refurbishes the drives for resale.

Test Center engineers were amazed to find that the 50-Gbyte Barracuda, even with its 11 platters
and 20 heads to whip around, still performed slightly better on average than all the other 7,200-rpm
units in this roundup. And all of those mechanics are contained in a 3.5-inch form-factor drive with
a 1.6-inch height.

The two 10,000-rpm drives performed much better than the Barracuda, but the focus of this
roundup was on high-capacity hard drives. Seagate was the only vendor with such a behemoth.
Had the Barracuda been significantly slower than the other 7,200-rpm drives, engineers could not
have given Seagate the award. Since the Barracuda actually performed slightly better than its
competition, it was a no-brainer handing Seagate the Editors' Choice award.

The Test Center was also impressed with the DiamondMax Plus 5120 from Maxtor Corp. Now
this is an IDE drive, but as the lab results show, the drive performed similarly to its 7,200-rpm
SCSI cousins in this roundup. Engineers were impressed by how little help the DiamondMax
needed from the CPU. Resellers save money using IDE drives because they can be controlled
directly off a motherboard and do not require a separate controller card. Unfortunately, only four
IDE drives can be connected to a typical motherboard, and they do not spin as fast as 10,000 rpm
just yet; the DiamondMax is a 7,200-rpm unit.

An IDE drive generally costs less than half of what SCSI drives of the same capacity would cost.
As proof, Maxtor's 20-Gbyte IDE drive costs only $429, providing nearly 50 Mbytes of storage
space per dollar. The 7,200-rpm SCSI drives all provide about 24 Mbytes per dollar, and the
10,000-rpm units provide only 16 Mbytes per dollar.

Maxtor is taking a traditional approach with its drives, relying on distributors for most support. At
least in theory, this should keep margins stable, although with wild price fluctuations this is yet to
be seen.

IBM Corp.'s Ultrastar 36XP is a 36-Gbyte Ultra2 SCSI LVD drive that spins at 7,200 rpm. It beat
out the similar 7,200-rpm Hitachi drive ever so slightly in performance and is suitable for any
application where 36 Gbytes of storage space is adequate and 10,000-rpm performance is
unnecessary.

IBM now supports resellers with a 30-person dedicated sales and support force with specialties in
verticals and white boxes. IBM reported the largest variance in its margin: 5 percent to 35 percent.
The company said this is because its drives are used in such a wide variety of environments that it
is difficult to put a finger on an average. IBM also declined to state an actual MSRP for the unit
under review. Instead, the company provided a range and said that environment and price
fluctuations make it impossible to state a firm price.

Overall, the fastest drive was Fujitsu's MAG3182LP, a 10,000-rpm Ultra2 SCSI LVD scorcher
with an 18.2-Gbyte capacity. Engineers were quite impressed with this Fujitsu offering that has no
trouble running against Cheetahs. Fujitsu's reseller program was quite solid and in line with
offerings from IBM and Maxtor, although it lacks co-op funds and a reseller advisory council.

In the channel, Hitachi stood tall, largely because of its margin and above-average channel
program. The company was the only vendor to offer VARs free demo units. Hitachi does not offer
price protection, one of three including Maxtor and Western Digital Corp.

Resellers should also look at the units from Quantum Corp. and Western Digital, which were both
impressive. Quantum's 10,000-rpm Atlas 10K performed nearly as well as the Fujitsu unit, and
Western Digital's 7,200-rpm drive performed similarly to the other 7,200-rpm units reviewed and
offers the same 24 Mbytes of storage per dollar. Both companies offer slim margins and
below-average channel programs. Quantum plans to unveil a new lead generation program later
this year, and Western Digital is not far behind.

---

Barracuda 50

Price: $2,100 (street)

Company: Seagate Technology Inc.

Location: Scotts Valley, Calif.

(831) 438-6550

(800) 732-4283

www.reseller.seagate.com

Copyright ® 1999 CMP Media Inc.
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