Comments on: HGST getting ready to rumble http://storagemojo.com/2008/04/29/hgst-getting-ready-to-rumble/ Data storage info & analysis Fri, 08 Aug 2008 21:10:59 +0000 http://wordpress.org/?v=2.6 By: Gary Davis http://storagemojo.com/2008/04/29/hgst-getting-ready-to-rumble/#comment-195517 Gary Davis Fri, 02 May 2008 08:25:15 +0000 http://storagemojo.com/?p=699#comment-195517 Robin, Of all of the words you have written that I have read, (and mostly admired and agreed with or learned from) these words are the most true: "Disk vendors mostly compete on price. HGST has an opportunity to change this by re-thinking the disk value proposition - and the communication of it. The industry is at several inflection points." Still, I would have changed it slightly. For example, I would have written that HDD vendors HAVE mostly competed on price". While price will always play the key role in a commodity market, I believe that is largely from a market point of view. However, a large area of differentiaion that has decided the fortunes or lack of them in the HDD business is manufacturing strategy. In the past this has been pretty much identified as either vertical integration or so-called "virtual" integration. Both strategies seemed to work for a period of time except where execution against either game plan fell short. With the three leading suppliers of HDD moving in the direction of the same hybridized model of in-house manufacturing plus outside manufacturing of key components, this area of differentiation may be dwindling. All the more reason the masters of HGST's fate in Japan would be wise to heed your cautionary rhetorical question:"Will the guys across the pond let him do it". For years HGST fell behind in execution by steering supply line choices and internal processes from disadvantaged viewpoints and without appropriately benchmarking (or responding to benchmarks) of the competition. In the meantime, that competition was developing many fresh views, and was actively seeking new ideas, often from outside the industry. They further challenged suppliers to be participative in this continuous improvement process, as HGST became more inwardly focused on merging the cuturally diverse IBM HDD group with their own. While the competition were linking up with diverse partners, and engaging in accelerated business devlopment and product roll out activities, HGST seemed more engaged in intramural activity. Raj has a reputation both as an iconoclast and an agent for change coupled with a vast reservoir of energy. No one that I could think of is better suited for the task at hand . But there are equally talented people in his HDD peer group who have a head start. Once again you have once again grabbed the essence of the challenge: "the light bulb has to want to change". Robin,
Of all of the words you have written that I have read, (and mostly admired and agreed with or learned from) these words are the most true: “Disk vendors mostly compete on price. HGST has an opportunity to change this by re-thinking the disk value proposition - and the communication of it. The industry is at several inflection points.”

Still, I would have changed it slightly. For example, I would have written that HDD vendors HAVE mostly competed on price”. While price will always play the key role in a commodity market, I believe that is largely from a market point of view. However, a large area of differentiaion that has decided the fortunes or lack of them in the HDD business is manufacturing strategy. In the past this has been pretty much identified as either vertical integration or so-called “virtual” integration. Both strategies seemed to work for a period of time except where execution against either game plan fell short. With the three leading suppliers of HDD moving in the direction of the same hybridized model of in-house manufacturing plus outside manufacturing of key components, this area of differentiation may be dwindling.

All the more reason the masters of HGST’s fate in Japan would be wise to heed your cautionary rhetorical question:”Will the guys across the pond let him do it”. For years HGST fell behind in execution by steering supply line choices and internal processes from disadvantaged viewpoints and without appropriately benchmarking (or responding to benchmarks) of the competition. In the meantime, that competition was developing many fresh views, and was actively seeking new ideas, often from outside the industry. They further challenged suppliers to be participative in this continuous improvement process, as HGST became more inwardly focused on merging the cuturally diverse IBM HDD group with their own. While the competition were linking up with diverse partners, and engaging in accelerated business devlopment and product roll out activities, HGST seemed more engaged in intramural activity.

Raj has a reputation both as an iconoclast and an agent for change coupled with a vast reservoir of energy. No one that I could think of is better suited for the task at hand . But there are equally talented people in his HDD peer group who have a head start. Once again you have once again grabbed the essence of the challenge: “the light bulb has to want to change”.

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