WD is not a disk drive company – and not a moment too soon

by Robin Harris on Friday, 20 May, 2016

While you weren’t looking Western Digital stopped being a hard drive company, morphing into a storage company. Such transitions are nothing new for a company that started life making calculator chips in the 1970s, morphed into SCSI, ATA and graphics in the 80s, and built its disk drive business in the 90s and 00s.

The closing of the SanDisk deal puts an exclamation point on the transition, but it started in 2011 with the acquisition of HGST. The acquirer of IBM’s disk operations has since acquired Skyera – winner of 2012’s content-free announcement award, Amplidata and server-side flash vendor Virident (wonder how integrating that with SanDisk’s Fusion-io will go?).

Amplidata’s software is the basis for the HGST Active Archive System object store. Since the web site refers to “Systems” we can expect more system products from HGST.

The StorageMojo take
It’s B-school chestnut: the railroads thought they were in the railroad business – instead of transportation – so they lost out to truckers. Cheap flash IOPS has destroyed the value of HDD-optimized array controllers – which has dramatically reduced the cost of entry into storage systems.

Add to that advent of sophisticated remote management – much advanced over 90’s “call home” features – and much of the rationale for a costly enteprise sales and support force goes away. That further lowers the market entry bar – and rips even more value out of legacy vendor infrastructure – not that Michael Dell is likely to notice for a few years.

Of course, the sweet spot for entry is the sub-$50k storage system price band. The legacy vendors don’t play there, so buyers aren’t expecting 3 martini lunches and catered golf events. But as AWS has demonstrated, customers will give up a lot for a low price.

Expect to see Seagate follow suit. Samsung and Toshiba might as well, but both are distracted by other problems.

Congratulations to the WD exec team on yet another well-executed pivot to a larger market. This will be fun to watch.

Courteous comments welcome, of course.

{ 2 comments… read them below or add one }

Ian F. Adams May 25, 2016 at 10:16 am

It was my understanding that Seagate has been attempting to vaguely move in the systems-ey direction for a few years with their Cloud Systems and Solutions, though its been unclear to me how much success they’ve had.

Dave Beaver June 2, 2016 at 5:32 pm

Now if only the markets would notice this and value WD the way it should be valued. I still see “analysis” pieces at places like Seeking Alpha talking about how the disk companies are dead but don’t know it, and WD and Seagate are always the first mentioned. WD has indeed moved on from the spinning rust days, and is well positioned for the future.

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