An Interview with Seagate's Henry Fabian

Storage

Digital storage has been thriving in recent years, apparently surviving the recent global downturn with fewer bruises than many other high technology sectors. The appetite for storage grows by leaps and bounds with every new computer, every new digital entertainment device, and every new convert to the digital download age. Video and music files of both high and low definition jam the Web, which has become as much an entertainment highway as an info-highway. Anecdotally, virtually every retail computer or technology store SPCR staff members visit regularly reports unabted sales of high capacity hard drives, network attached storage, multiple drive home servers, and other similar storage devices. At the same time, the price of hard drive capacity has been dropping at an incredible rate. The explosion in consumer demand has a parallel in the server markets; all of those huge files reside at least temporarily in umpteen servers all over the world.

The emergence of the solid state drive as a viable alternative to traditional hard drives is another twist in the storage scene. While SSDs began looking interesting for limited high end applications a few years ago, and prices had been steadily dropping to more affordable levels, it was Intel's entry in late-2008 that was the real signal for the SSD market to heat up. If you're reading only the tech web sites, you'd be forgiven for believing that SSDs have all but conquered the digital world, so frequently are they touted to be here, now and better than any HDD. Yet in the stores, SSDs are in only a handful of high end laptops, and the awareness of the term itself extends very little beyond tech geeks. Seagate had been utterly mum on the topic of SSD until a few days ago when the new Pulsar series was announced.

SPCR had an opportunity recently to chat with Henry Fabian, the executive director of Seagate Core Business Product Marketing, about Seagate, digital storage, hard drives and SSDs. Seagate is the single largest enterprise in digital storage, with about 30% of the world market. What emerges from this interview is a somewhat different picture that presented by the typical tech web blog.

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SPCR: What are Seagate's plans for expanding into SSD manufacturing and how is this being done? Any acquisitions/partnerships that can be discussed?

Henry Fabian, Seagate: Seagate is storage agnostic, meaning that we look at the market opportunities that can best serve our customers, and will supply the specific storage solutions that are best fit for their needs. With SSDs, the best market opportunity is the enterprise space and that will be where we focus with our first SSD product. Seagate has a dedicated core team of development and engineering staff working on SSDs internally, but we also do work with outside partners as well, just as we would with suppliers of certain components of our HDDs.

SPCR: Are there any advancements (either forthcoming or already extant) in HDD technology that would further delay the storage transition to SSD?

Henry Fabian, Seagate: HDDs have a long life ahead of them and we see HDDs and SSDs as complementary and together expanding the overall market. Because of the TAM expansion effect the combination of HDD and SSD provides, we are working hard to enable SSDs that meet the demanding needs of the enterprise. Seagate views SSDs as being well-suited for performance applications, while HDDs will be necessary for capacity-hungry applications. HDDs currently use perpendicular recording technology, but we expect other technologies to enable the extension of areal densities further for the next decade and beyond. Heat Assisted Magnetic Recording (a.k.a. HAMR) and Bit Patterned Media are two promising technologies that we're working on. One of these technologies will be seen on HDDs within the next five years.

SPCR: Has there been any loss of Seagate HDD market share to SSDs?

Henry Fabian, Seagate: No - to date, SSD has been additive to the market, albeit in relatively small volumes (<1% of total enterprise TAM). Within five years we see SSD representing 5-7% of the enterprise market, an important component to an overall expansion of the storage market. Our entry into SSD has been timed to intersect when we see SSD volume adoption starting to ramp to interesting numbers.

SPCR: Do you anticipate loss of market share to SSD? Which sectors? When?

Henry Fabian, Seagate: The big opportunity that Seagate sees is in the high-performance and blade server market space. This is where SSDs fit well and can deliver benefits to these upper tier storage environments. Certainly over time, as SSDs become proven and are built to industry-defined standards, SSDs will be an important part of the enterprise storage portfolio and will fill the role of very high performance storage devices - complemented by the very important role HDDs have played, and will continue to play in the enterprise. But the need for greater storage capacity continues and is being fueled by many devices and internet-based applications. These will continue on HDDs as well.

SPCR: Seagate's announcement in the last few days about the new Pulsar SSD for the enterprise market may have taken some of our readers by surprise. It is the first official entry by a HDD maker into the realm of SSDs. Please comment.

Henry Fabian, Seagate: With regard to Pulsar, it's the first of many to come in the family. While this one is specifically built for blade servers (one of the reasons it is SATA is that our blade server OEMs are currently being built to the current standard chipsets and 3Gb/s SATA interface), future variations will undoubtedly use SAS. As to SSDs in general, Seagate's focus is on the enterprise market and that is where the volume opportunity for our business is best fit. Not to say that we aren't looking at the other markets; we'll always keep an eye out and continue to examine them.

SPCR: What is the total world market for HDDs? How does it break down?

Henry Fabian, Seagate: To give an idea of the market size for HDDs, last quarter in Q1 FY2009 alone, the industry shipped 152.3 million HDDs and Seagate represented a total of 46.3 million of those units. From the overall industry total available market (TAM), the sectors can be divided into Enterprise (6.6M units), Desktop (59.2M units), Notebook (64.2M units) and Consumer (22.4M units) categories. Seagate’s overall revenue for the quarter was 2.66 Billion.

SPCR: Are Seagate HDD sales growing? How about market share?

Henry Fabian, Seagate: Seagate's past quarter financial results are evidence that there is growth in HDDs, even as the world continues to struggle through a recession. Our overall market share across our businesses during the past quarter was 30%, the highest in the industry. Our view is that the demand to consume and store content will continue to grow and Seagate will continue to take a technology-neutral approach as SSDs and HDDs clearly both have their place. It’s a great time to be involved in storage and we look forward to an exciting future ahead of us.

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