Seagates Acquisitions

By Brian Fonseca  |  Posted 2005-12-21 Print this article Print

Seagates purchase of Milpitas, Calif.-based Maxtor comes on the heels of its acquisition of data management and backup vendor Mirra Inc. in September. Watkins said the company is well versed in acquisitions and chose to envelop Maxtor under its brand to increase Seagates scale and operating efficiency costs.
"Were pretty familiar with the pros and cons of high-tech mergers. Ill be honest: What we dont like about them is when you have to do a lot of integration. A lot of companies get into trouble when they have to rationalize and integrate roadmaps and cultures. If we thought it was something like that, we probably wouldnt have done it," Watkins said.
"Its really a leveraged deal looking at how we take their revenues and replace their products with our products, our manufacturing, processes, etc." In particular, Watkins said Maxtors media manufacturing is one area Seagate will take a close look at integrating into its products. Armed with projections that the install base of PCs will double in the next five years, Watkins said Seagate will be front and center to capitalize on the growth of notebook computers becoming more mobile, the "surprising" expansion of desktops into new global areas of penetration, and consumers storing content on a host of personal devices but backed up and collected at a central home location. Click here to read more insight about the Maxtor-Seagate deal from eWEEK Labs analyst Henry Baltazar. "Whats happening is people are digitizing their content and moving it and holding it in multiple places, the home and car. Were seeing a lot of storage applications, whether cable or satellite companies with DVR in them, or whether its people applying handheld devices, iPod or MP3, when theyre in use theres strong content, and they want to back it up at the desktop in the home. All those storage solutions are hard drives," Watson said. Maxtor has been active in building 3.5-inch drives used for living room and television applications. The company has not been a significant player in growing mobile areas. A major test for Seagate will be its approach to balance to complete the exhaustive physical consolidation of Maxtor in the second half of 2006 while being faced with the beginning of a very large transition to perpendicular recording—in favor of existing longitudal—technology going onto its hard disk drive offerings. The cause and effect will entail a massive impact on manufacturing status lines of Seagate as a company, as well as head and disks production. "The [disk drive] industry is running out of gas in longitudal disk drives, [vendors] cant take it much further in improvement. Perpendicular uses fewer heads and disks as you go up in recording density," or aerial density, Porter said. He said that the transition to perpendicular recording should come around 2007 on 2.5-inch disk drives for PC notebooks. Over the last few years longitudal disk drives most frequently used in desktops were 40GB, or one head on one side of a disk. For an 80GB drive, two heads were used. In 2006 and beyond, Porter predicts a transition to the desktop using one head for 80GB and two heads for 160GB, thereby doubling capacity on the desktop disk drive via aerial density improvement. Check out eWEEK.coms for the latest news, reviews and analysis on enterprise and small business storage hardware and software.

Brian Fonseca is a senior writer at eWEEK who covers database, data management and storage management software, as well as storage hardware. He works out of eWEEK's Woburn, Mass., office. Prior to joining eWEEK, Brian spent four years at InfoWorld as the publication's security reporter. He also covered services, and systems management. Before becoming an IT journalist, Brian worked as a beat reporter for The Herald News in Fall River, Mass., and cut his teeth in the news business as a sports and news producer for Channel 12-WPRI/Fox 64-WNAC in Providence, RI. Brian holds a B.A. in Communications from the University of Massachusetts Amherst.

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