Seagate Technology

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Seagate Technology
Type Public (NYSE: STX)
Founded 1979
Headquarters Scotts Valley, CA, USA
Key people Alan Shugart, Founder
Bill Watkins, CEO
Stephen J. Luczo, Chairman of the Board
Bob Whitemore, CTO
Industry Hard drives
Products ST-506
Revenue $11.4 billion USD (2007)[1]
Employees 55,000[1]
Website www.seagate.com

Seagate Technology (NYSE: STX) is a major American manufacturer of hard drives, founded in 1979 and based in Scotts Valley, California. The company is registered in the Cayman Islands. Their hard drives are used in a variety of computers, from servers, desktops, and laptops to other consumer devices such as digital video recorders, Sony PlayStation 3, the Microsoft Xbox and the Creative Zen Micro line of digital audio players. Seagate is the world's largest computer hard disk manufacturer and the oldest independent hard disk maker still in operation.

Contents

[edit] History

[edit] Early history

Seagate Technology was founded (under the name "Shugart Technology") by Alan Shugart (back from a sabbatical after getting pushed out of Shugart Associates) and Finis Conner; their first product (released in 1980) was the ST-506, the first hard disk to fit the 5.25" form factor of the (by then famous) Shugart "mini-floppy" drive. The hard disk was a hit, and was later released in a 10-megabyte version, the ST-412. Seagate's history is filled with dramatic boom and bust cycles that typify the hard disk business.

In the early 1980s Seagate secured a contract as a major OEM supplier for the IBM XT, IBM's first personal computer to contain a hard disk. The volumes were large as IBM was the dominant supplier of PCs at the time and fueled Seagate's early growth. IBM was a fickle buyer and abruptly reduced its purchases from Seagate and began purchasing from other suppliers such as Miniscribe, IMI and others, creating financial havoc for Seagate. Seagate responded by establishing a powerful distribution channel that supplied hard disks for the millions of PCs hungry for hard disk storage. This was the first of many examples of Seagate turning a pending financial disaster into a huge success.

Through the 1980s, Seagate mainly sold simple hard disks which suited the price conscious distribution channel well. These devices were derivatives of (and improvements upon) the original ST-506 design; the ST-225 20 MB disk and ST-251 40 MB disk were the biggest sellers of this age, though they also sold faster hard disks that used voice coil technology. Because of this, Seagate disks were sometimes referred to as cheap and unreliable, a reputation not entirely undeserved because of the 225's and 251's usage of stepper motors to position the heads. However, Seagate disks were usually held in better regard than their competition (mainly MiniScribe, but also Microscience, Rodime, Tandon and Kalok). Seagate finally abandoned stepper motor designs in the early 1990s; the ST351A/X, an oddball 40 MB drive that could run on either an ATA or XT Attachment bus, was Seagate's last product to use a stepper.

Finis Conner left Seagate in early 1985. After one failed attempt to start his own company, and also briefly serving as CEO at CMI (Computer Memories Inc.), in 1986 he founded Conner Peripherals, which originally specialised in small-form-factor drives for portable computers. Conner Peripherals also entered the tape drive business with its purchase of Archive Corporation. After ten years as an independent company, Conner rejoined Seagate in a 1996 merger.

In 1989, facing increased competition and margin pressure, Seagate turned another challenging financial situation into success by making an important and strategic acquisition of Control Data's MPI/Imprimis disk storage division. Seagate management had always believed that vertical integration of key components such as heads and disks was crucial for the long term survival of the company in the face of competition from deep-pocketed competitors such as IBM and certain Japanese suppliers. This move gave Seagate access to CDC's voice coil and disk-manufacturing patents, and importantly a competitive advanced head development capability. As well, the purchase provided access to a high end server customer base and the first 5400 RPM drives on the market (the CDC Elite series). Seagate quickly began to leverage vertical integration across its entire product line and once again became a dominant force in the business.

[edit] 1990s–2000s

In 1992, Seagate introduced the Barracuda, the industry's first hard disk with a 7200 RPM spindle speed. The company followed this with the Cheetah (the first 10,000 RPM disk) in 1996 and the X15 (15,000 RPM) in 2000. Seagate also introduced the Medalist Pro 7200 range, the first ATA disk with a 7200 RPM spindle, in 1997. As of 2005, Seagate started an innovation called the "pocket hard drive". Seagate has the highest areal density (number of bits stored per square inch) in the industry.

In the mid-to-late 1990s, Seagate management began to acquire storage software companies, believing that the relentless pressure on disc drive margins could be cushioned by diversification into software. The investment paid off as Seagate eventually sold its software division to Veritas and became one of the largest Veritas shareholders. Veritas stock soared and Seagate was able to convert its investment into much desired cash.

On December 21, 2005, Seagate confirmed the acquisition of rival HDD firm Maxtor. The all-stock deal was worth $1.9 billion. The firms said the combination will be 10-20% accretive on a cash EPS basis after the first full year of combined operations. The combined company will save around $300 million in operating expenses after the first full year of integration, Seagate said. The transaction was completed in May of 2006.

[edit] Corporate affairs

Seagate was traded for most of its life as a public company under the symbol “SGAT” on the NASDAQ system, then moved to the NYSE system under the symbol “SEG” in the 1990s. In 2000, the company was taken private by an investment group composed of Seagate management, Silver Lake Partners and Texas Pacific Group in a 3-way merger-spinoff with Veritas Software; Veritas merged with Seagate, which was bought by the investment group. Veritas was then immediately spun off to shareholders, gaining rights to Seagate Software Network and Storage Management Group (with products such as Backup Exec), as well as Seagate's shares in SanDisk and Dragon Systems. Seagate Software Information Management Group was renamed Crystal Decisions in May 2001. Seagate re-entered the public market in December 2002 when laid-off Michael Cole came and took Seagate over.

[edit] Research and development

Seagate's research and development wing is called Seagate Research. It was established in Pittsburgh, Pennsylvania in August 1998. On September 11, 2006, Seagate won the Technology Design Award for its "Hard-disk recording technology that dramatically increases the amount of information that can be stored on a single disk. This Technology is called "Perpendicular Writing"".[2]

[edit] Antecedents

[edit] Timeline of notable events

[edit] Controversy

Some Seagate drives are not compatible with Linux.[9] In two separate incidents, Seagate/Maxtor drives were found to have shipped with malware preinstalled.[10][11] In a 2007 class action lawsuit, Seagate settled by paying partial refunds to customers because of its use of the term kilobyte, which was claimed to be misleading.[12]

[edit] Recognition

In December 2006 Seagate's Barracuda 750GB hard disk was 9th in PC World's 'The 20 Most Innovative Products of the Year'[13]

[edit] Competitors

[edit] References

  1. ^ a b Seagate Technology – Corporate Profile
  2. ^ Technology Innovation Winners and Runners Up 2006. Wall Street Journal (2006-09-11). Retrieved on 2006-09-12.
  3. ^ http://www.seagate.com/cda/newsinfo/newsroom/releases/article/0,1121,2285,00.html
  4. ^ America's Best Managed Companies according to Forbes (2006-01-09).
  5. ^ Seagate Leaks 750GB Barracuda 7200.10 Details (2006-04-20).
  6. ^ Seagate swallows Maxtor (2006-05-18).
  7. ^ Seagate Confirms 1TB Hard Disk Drive (2007-01-22).
  8. ^ Seagate's Encrypted Hard Drives Debut. March 12, 2007.
  9. ^ http://www.theinquirer.net/gb/inquirer/news/2007/12/06/seagate-snubs-linux
  10. ^ http://www.theregister.co.uk/2007/09/19/maxtor_harddrives_include_virus/
  11. ^ http://www.taipeitimes.com/News/taiwan/archives/2007/11/11/2003387202
  12. ^ http://news.zdnet.co.uk/hardware/0,1000000091,39290393,00.htm?r=3
  13. ^ The 20 Most Innovative Products of the Year (2006-12-27).

[edit] External links

Retrieved from "http://en.wikipedia.org/wiki/Seagate_Technology"
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