The days of wine and roses...
...aka selling spinning rusty platters for huge profit, are coming to an end.
Disk drive maker Seagate has two per cent of its workforce destined for the exit door. It’s announced a restructuring plan which means 1,050 people are going to have a pink slip shock. Seagate expects to save $113m by doing this. It has seen two quarters of declining revenues and profits. While investors, who have seen …
I can't recall exactly where I saw it, but there was some data published by a huge US based datacenter who use several manufacturers for their drives. The data showed hard drive failure rates, Seagate were by far the worst from my recollection. Hitachi were by far the best and I was actually looking for a drive at that time and my money went to Hitachi as a result.
I'm not saying that report was necessarily representative, but if it is, then perhaps Seagate's reliability is a reason as to why they are losing sales and needing to lose people.
I notice Seagate Hardrives only have 2 or 3 year warranties. Western Digital HD I just bought has a 5 yr warranty.
What does that tell you about Seagate's confidence, or is it another way to generate more cash, to a company already making 2 billion in PROFIT per year?
Don't know if WD is having layoffs too, but in any case not necessarily an indication of product quality (and yes Seagate had quality issues in the past).
The more likely cause is that unit demand for 15K drives is declining at 20% per year, and 10K at 15% per year. Flash has become the performance tier. And as flash prices are declining 20% per year expect this trend to accelerate. Spinning rust will be relegated to the capacity tier which will be 7200 RPM SATA or NL-SAS, and over time that too is vulnerable to TLC and 3D NAND.
You are right about the past quality problems at Seagate, but they seem to have addressed that. More importantly it's the decline in HDD drives. The 15K SAS has actually declined faster than 20% per year. Total market size has fallen from ~5.1M units per quarter to ~3.2M per quarter over the last two years. So, last week, Seagate announced the last of the 15K drives, making formal what everyone was expecting. Expect WD/HGST and Toshiba to follow (and they have flash anyway). In the next 18 months expect 10K SAS to suffer the same fate. (if not sooner)
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