NEW YORK -(Dow Jones)- Disk-drive maker Seagate Technology Inc. next
week is expected to announce plans to offer a "storage farm" services to
other companies, capitalizing on the increasing need to contain the vast
data generated by the Internet.
"Storage as a service is going to be offered," said Stephen J. Luczo,
Seagate's president and chief executive officer. "We think it's an
opportunity. Today, I don't think it's obvious (to a lot of people) how
profitable that kind of service could be."
An alliance between Seagate (SEG) and another company could be
announced as soon as Tuesday, a source at the company said.
In April, Intel Corp. announced plans to open server farms. Intel
will set up data centers with thousands of powerful computers, including
storage, for companies that help connect users to the Internet. In
effect, the move means Intel is branching out from its traditional
business of making computer components into the area of providing
services.
Similarly, such a move would be a break from Seagate's primary
business of making disk drives. But Luczo said he would prefer to get
into the business with a partner, likely a company that makes storage
devices.
"There's probably a long-term future for that kind of service, but so
far it's only in the beginning stages," said James Porter, president of
industry research group Disk/Trend in Mountain View, Calif.
So far, there are some start-up companies that offer emergency backup
over the Internet, Porter said. But companies are skeptical of
entrusting valuable data to young firms without a track record, he said.
In a meeting with Wall Street analysts this week, Luczo said that
Seagate was back on a growth track after a difficult 1998. He said
Seagate should be able to deliver revenue growth in the 15% to 20% range
from fiscal 2000 and beyond. He noted that Seagate had gained about six
points of market share in the high-end disk-drive business, mostly at
the expense of International Business Machines Corp. (IBM), giving
Seagate about 43% of the high-end disk market.
Further, Luczo said any slowdown in computer spending because of the
year 2000 glitch is likely to be "pretty short." The computer industry
is now beginning to focus more on "what happens after" Jan. 1, 2000, he
said, and demand appears strong for next year.
Copyright (c) 1999 Dow Jones & Company, Inc.
All Rights Reserved.
|
