My Thoughts on Technology and Jamaica: Seagate Buys Samsung HDD Business - SSD's in Rihanna's Shut up and Hard-Drive

Sunday, April 24, 2011

Seagate Buys Samsung HDD Business - SSD's in Rihanna's Shut up and Hard-Drive


Night’s candles are burnt out, and jocund day
Stands tip-toe on the misty mountain-tops

Shakespeare, Romeo and Juliet, III, 5

It would seem said candles were put out when on Tuesday April 19th 2011AD, when Seagate Technology PLC, one of the largest Component manufacturer in Asia, purchased Samsung Electronics Co.’s Hard-Drive business for US$1.375 billion pieces of silver as stated in the article “Seagate agrees to buy Samsung's Drive Business”, published April 19, 2011 2:29 AM PDT by Stephen Shankland, DeepTech - CNET News and the article “Seagate to buy Samsung's hard disk Drive business”, published Tuesday Apr 19, 2011 2:39 pm ET by BARBARA ORTUTAY, AP Technology Writer, Yahoo News.

This Debt and Equity swap, in the Computer Component supply world, is very much akin to the Debt and Equity swap between Digicel Group and America Movil, swapping Digicel Ecuador and Digicel El-Salvador operations in exchange for Telecom Provider CLARO as stated in my blog article entitled “Digicel buys CLARO Jamaica - Jumanji Exchange is no Robbery”.

Or even the Telecom Provider AT&T purchase of Telecom Provider T-Mobile as chronicles in my blog article entitled “AT&T buys T-Mobile Prince of Persia in A Series of Unfortunate Events

Well same thing here, except it’s a complex mix of half cash, half stock, equity and a supply deal mixed up in there somewhere, with Samsung Electronics Co. supplying Seagate Technology PLC with SSD’s for a future PC, Laptop, Tablet and Netbook push in exchange for its purchase of its Hard-Drive Business.

This is tantamount to a declaration of War in the Electronics Components world.

This deal between South Korean Samsung Electronics Co.  and Seagate Technology PLC gives Samsung a 10% stake in Seagate Technology.

This acquisition puts Seagate in No. 2 position behind Western Digital Corp, Seagate Technology PLC’s rival in the Mechanical Hard-Drive business.

Western Digital Corpare now in pole position after the company, Western Digital Corp., agreed to buy Hitachi Global Storage Technologies for US$4.3 billion pieces of silver as announced on Monday March 7th 2011AD as stated in the article “Western Digital to pay US$4.3 for Hitachi Drive Unit”, published March 7, 2011 6:46 AM PST by Lance Whitney, Business Tech - CNET News.

Trust not the News? Here are the original Press Releases on Monday March 7th, 2011AD on both Hitachi Global Storage Technologies and Western Digital Corp websites respectively:


Ok.

Very similar deals to those that occurred in the Telecoms Sector on either side of the sea here in the West, but not necessarily mimicking Telecoms, as the Western Digital Corp purchase of Hitachi Global Storage Technologies occurred before Digicel Group and America Movil dropped their Nuclear Bomb on us on Friday March 11th 2011, nearly five (5) days later.

Thus there will be two (2) - and hence the reason why I drew for the above referenced examples. This as when the dust settles at the end of 2011AD, these consolidations will rank the Mechanical Hard-Drive makers as follows:

1.      Western Digital Corp is No.1 in pole position with 50% of world Market share
2.      Seagate Technology PLC is No. 2 with 40% of world Market share
3.      Toshiba is No. 3 with the remaining 10% of world Market share

If anything, the Seagate Technology PLC - Samsung Electronics Co. Deal mimics the Western Digital Corp purchase of Hitachi Global Storage Technologies in an apparent jostling for the expected explosion in the growth of Mechanical Hard-Drive storage needed for ………PC’s?

Can’t be just PC’s alone folks, as SSD’s (Solid State Drives) are killing off the PC Market, with analyst Gartner in November 2010 projecting a 10% displacement of the PC Market by 2014AD as borne out in the articles “Gartner: Tablets, Economy Taking Bite out of PC Sales”, published November 29, 2010 by PC Magazine and the article “Tablets taking a bite out of PC sales: Gartner”, published November 29, 2010 by AFP.

ZDNet Reporter Larry Dignan has already chosen winners and losers, siding with Tablets, due to their ability to dock and become a PC with wireless Bluetooth Mouse, Keyboard and other external peripherals as opine in his article “Tablets will displace PC units; Time to pick winners and losers”, published November 29, 2010, 8:24am PST By Larry Dignan, Between the Lines - ZDNet.

Even I too have predicted the demise of the PC in my blog article entitled “Tablets and the Future of the PC - Jurassic Park and License to Kill”. A more in-depth analysis is coming on the Geezam Blog under author named Lindsworth.

So since Tablets are slated to kill off PC’s (love how I did that, right?), Laptops and Netbooks, which are effectively dead, why would these seeming large behemoths in the Component Supply Industry decide to get into a dying business when everyone from Telecoms Equipment Suppliers,  to smartphone Handset Makers are going SSD’s as stated in the article “Smartphones moving to fancier flash Drives”, published August 19, 2009 3:15 PM PDT by Brooke Crothers, Nanotech - The Circuits Blog - CNET News?

The push is now about performance, not specs. Thus, Biology and Biochemistry buzzwords like “ecosystems”, “biodiversity”, “Survival of the fittest”, “evolution”  and “roadmap” mix freely with Electronics terms.

Silicon Valley has gotten the message from customers: more efficient low power GPU-CPU Sandy Bridge Processors, Dual-Core Processors and clever aesthetics which were all started by Apple Inc and their Apple iPad is what customers want.

Out with the Specs and Power Inefficiency and in with the Performance and Longer Battery-Life.

CNET News Brooke Crothers muses that the Apple iPad and the Apple MacBook Air is changing Computer Design with an emphasis on Performance and less on specs as stated in the article “How the iPad changes PC Design”, published April 23, 2011 5:39 PM PDT by Brooke Crothers, Nanotech - CNET News.

In fact, he had made this assertion about the Apple MacBook Air in a previous article entitled “How should Apple redesign the MacBook Air?”, published September 26, 2010 3:24 PM PDT by Brooke Crothers, Nanotech - CNET News.

His articles provided inspiration for my Geezam Blog article entitled “MacBook Air and FLASH-based HardDrives - The Quest for Instant On” in which I predicted the death of Mechanical Hard-Drives.

I took it even further and predicted a push towards SSD’s resurrecting Laptops and Netbooks as stated in my blog article entitled “Google Chrome OS and smartBooks - Connection between SSD's, the Fountain of Youth and Lazarus”, the so-called Lazarus Effect.

SSD’s have proven to be the ultimate Lazarus Pit for Laptops, now going the Cloud Computing. Open Source OS as well as customers flock to the Apple iPad and its emphasis on performance and not specs as my Geezam Blog article entitled “Apple iPad 2 - Dual-Core Easy Skankin'”.

So why the interest in Mechanical Hard-Drives?

Cloud Computing.

The growing demand for Cloud Computing coupled with the decrease in the price of faster Broadband offerings means that Cloud Computing is now a possibility, albeit a risky one as the Amazon Data Outage demonstrates as stated in the article “Amazon failure takes down sites across the Internet”, published Friday April 22, 2011 9:26 am ET By PETER SVENSSON, AP Technology Writer, Yahoo News and the article “Amazon restoring AWS, but slowly for some”, published April 22, 2011 12:12 PM PDT by Stephen Shankland, DeepTech - CNET News.

Thus Mechanical-Hard Drives, especially the ones augmented with SSD’s, the so-called Hybrid Mechanical Hard-Drives as stated in the article “Hybrid hard-disk market set to take off”, published October 25, 2010 7:41 PM PDT by Brooke Crothers, Nanotech - CNET News are good for making the RAID (Redundant Array of Inexpensive Disks or Redundant Array of Independent Disks) used in Servers that run on various Linux Distributions for Servers such a Red Hat, Mandrake and Suse Linux.

This would allow for the continued expansion of the Cloud Server build-out, as the name RAID implies that makers of these Server Farms that power the Cloud Services chose the cheapest hardware that they can find. 

Hence the consolidation of businesses Western Digital Corp purchase of Hitachi Global Storage Technologies on Monday March 7th, 2011AD and Seagate Technology PLC - Samsung Electronics Co. Deal on Tuesday April 19th 2011AD respectively.

In effect, they are ALL going for economy-of-scale and volume in order to deliver the lower prices for Hybrid Mechanical Hard-Drives needed to make these Server Farms that power the Cloud Services such as Google Docs and Gmail, Facebook, Twitter et all. Most likely too, these deals will go though by the end of the Fourth Quarter of 2011

If I was not thinking straight, I would say the Component makers may be tired of Microsoft and aware of the stagnant PC Market and are thus consolidating to give support to Cloud Computing as it guarantees a future of higher price point SSD’s.

Again, that’s just a theory….I just decided to throw it out there!!!

Additionally, by riding out the demand curve for Hybrid Mechanical Hard-Drives, No. 1 Western Digital Corp and No 2 Seagate Technology PLC  may be pushing and positioning for the day when Hybrid Mechanical Hard-Drives, a precursor to SSD Hard-Drives become the de facto standard for PC’s.

PC’s, the Final Frontier, still largely unaffected by SSD revolution sweeping the Netbook, Laptop and nascent and rapidly expanding smartbook and Tablet Markets!

Volume demand drives price drops, as the reasoning goes!

This as the Spinning Disc Technology has hit a speed bump as they are unable to keep up with the performance demands of customers who desire features such as:

1.      Instant-On which only SSD’s can deliver
2.      Low-power CPU-GPU Processors
3.      Faster Memory Technology, such as RaceTrack Memory as stated in the article “Racetrack memory nears the finish line”, published January 10, 2011, PhysicsWorld PhysicsWorld
4.      Higher Bandwidth Data Transfer Technologies such as Thunderbolt as suggested in my blog article entitled “MacBook Pro and Intel LightPeak - Thunderbolt and The Fantastic Mr. Fox
5.      Higher Speed Telecoms Provider Wired and Wireless Networks such as 1GB services as suggested in my blog article entitled “Verizon, NEC and the Dawn of the Terabit Age - Audia's FlashDance and Surf's Up

These business consolidations are a herald for the coming of these a la carte features, much vaulted and coveted on the Apple MacBook Air, to the lowly PC.

Thus too ensuring its survival in the “post-PC era” as CEO Steve Jobs predicted in the article “Apple iPad, PC Makers and Battery Life - Lost in Space and The AppleByte”. CEO Steve Jobs cannot be right all the time, folks!

Thus the future is clear. By the Second Quarter of 2012AD, just in time for London Olympics 2012, SSD’s et al will ALL be the de facto standard, available a la carte on PC, Rihanna Shut Up and Drive Style.

Will these PC in the future be running Windows? Maybe, if Windows moves to the Cloud…….

London Olympics 2012, I just can’t wait!!

“God willing”, as my now deceased Seventh Day Adventist Princess Audia Granston often would state reflectively as the Sun set on our glistening bodies on our patio in Toll Gate, Clarendon.
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