Devott Insights: The Fate of Seagate is not only a Dream
Source: Chnsourcing.com.cn View: 288 Date: 2015-07-02

Seagate Technology once was a leading enterprise that provided solutions in computer storage area and was the biggest provider of hardware and read/white head. However with rapid rise of cloud, big data and mobile terminal, the position of Seagate whether can be kept? According to the estimate from executives of Seagate, there will be 70% data storage in cloud terminals in 2020. The greater challenge is that solid state disk will become a subversive challenge for traditional disks with this speed in 2020, and even directly replace traditional one. Since this year, development of cloud & mobile data has rapidly increased; and the limiting volume of individual users has developed into 50G, 100G and even unlimited direction. That means Seagate with foundation of disk, no matter it has confidence or not, the only way toavoid being another “blackberry” is to change current strategic mode.

Devote believes that Seagate should firstly provide cloud services for individual/enterprise users’ data as soon as possible, just like OneDrive from Microsoft, Drive from Google and iCloud for Apple; not just provide cheap but high quality storage devices for those companies behind the scenes. We believe the disk advantages of Seagate that directly connect with individual users and small & middle enterprises, which is difficult to copy. That resembles Baidu in China in the beginning of this century; both of them directly put search services in background for big clients into front-end to provide individual users’ services. The market evaluation of Badiu now is higher than those original big clients. The second one is that Seagate should rapidly invest SAAS service with base of data storage and analysis; excluding cloud storage, there are cloud computing, cloud analyses and other businesses to form CI one-step solutions in data age. The final one is to greatly reduce upgrading works of traditional disk, to invest more resources into development & commercialization of solid state disk. Although traditional disk can earn money or seems as stable, it has outdated and will be eliminated without hesitation. The speed of eliminating business from users is faster than providers. Walkman from Sony became inventory goods in market only after two-year’s development; but Sony was unwilling to close production line of Walkman with near 4 years. Walkman became a big vulnerability of Sony’s capital in last two years. New emerging market has provided a new threshold for traditional businesses of Seagate. However if see it as a reason for incomplete transformation, the updated situation will be not far away from reality.

This post is a personal or group view of Research and Advisory members and don't necessarily represent Devott's positions, strategies or opinions.

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