Evolving Business Case (not technology case) for future KM royalties?
From current issue of Computer Reseller News
September 14, 1998, Issue: 807
Section: Sourcing
Hard-Drive Vendors Depending Less On In-House
Technology
Joseph F. Kovar
Irvine, Calif. -- Hard-drive vendors are continuing to cut production costs while putting in place technologies that increase reliability. One way they are achieving economies while shortening time-to-market is reducing dependence on in house technology.
The advantage of high vertical integration is a company can make what it needs when needed, said Jim Porter, president of research firm Disk/Trend Inc.,Mountain View, Calif. "But if it can't get what it needs, it's in trouble."
Heads, disks, motors and semiconductors are the most expensive items in a drive's bill of materials, Porter said. "These are four completely different technologies a company has to keep up with, [in addition to] managing the company," he said. "If a company wants to do these components, then it has to invest in related facilities and R&D."
Seagate Technology Inc., Scotts Valley, Calif., is the most vertically integrated hard-drive vendor, Porter said. But he added that Stephen Luczo, recently appointed chief executive of Seagate, has publicly said the company had fallen behind with respect to head technology.
Luczo's comments may reflect the possibility that some items may be sourced outside the company, Porter said.
Seagate's executives could not be reached for comment.
One company with no manufacturing facilities of its own is Conner Technology PLC, San Jose, Calif., the reincarnation of Conner Peripherals Inc., which was swallowed up in 1996 by Seagate.
Conner plans to use a contract manufacturer to produce low-cost drives
targeted at sub-$1,000 PCs, said Peter Knight, company president. "We're [going to] utilize the capabilities of our component suppliers for the [product] development," he said.
Western Digital Corp., Irvine, Calif., recently inked an agreement to use IBM Corp.'s giant magneto resistive (GMR) heads and other components in its drives. Doing so will enable Western Digital to ship GMR drives early next year, said John Burger, the company's vice president of marketing.
The company has dropped in-house development of read channel components, limiting in-house component development to about half its media needs.
Drive vendors also are offering new technologies they claim improve drive reliability and reduce returns.
IBM Corp., Armonk, N.Y., will include Drive Fitness Test (DFT) technology in a new line of desktop and mobile drives this fall, according to a company spokesman.
DFT resides on the drive to monitor the health of mechanical components and log errors. DFT can tell a technician if the drive is defective or not. IBM hopes to offer it with server drives in the future, as well.
New drives from Quantum Corp., Milpitas, Calif., include Shock Protection System (SPS). When a drive is dropped, SPS prevents the head from bouncing on the disk and damaging the media.
Fujitsu Computer Products of America Inc., San Jose, Calif., ships all its desktop, enterprise and mobile drives with stiction-free sliders, according to a company spokeswoman. The feature reduces the surface area of the head, enabling it to fly close to the media without sticking to it.
Copyright r 1998 CMP Media Inc.
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