Seagate – Samsung Swap Hard-Drive Assets – Profitable Cloudy Horizon

Since the recent consolidation of Seagate Technology PLC and Samsung Electronics Co. in a deal worth US$1.375 billion pieces of silver on Tuesday April 19th 2011AD, my thoughts have run the gamut of the imaginative. This of course, settled quite nicely, on comparisons of course to another similar consolidation.

The deal gives Samsung Electronics Co a 10% stake in Seagate Technology PLC as it offloads it Mechanical Hard-Drive Business Unit on Samsung Electronics Co to focus on the coming of the more lucrative SSD (Solid State Drives) hungry market. Half cash, half stock, equity and a supply deal swap.

Reminds me of the Debt and Equity swap between Digicel Group and America Movil, swapping Digicel Ecuador and Digicel El-Salvador operations in exchange for CLARO Jamaica!

This is the Western Digital Corp deal that saw the assets of Hitachi Global Storage Technologies trade hands for a cool US$4.3 billion pieces of silver on Monday March 7th 2011AD.

Looks like something’s afoot in the Mechanical hard-Drive World, as when the regulatory dust settles in the Third Quarter of 2011AD, the following will be clear in a market made for three (3) big players:

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

This is an apparent jostling for the expected explosion in the growth of Mechanical Hard-Drive storage needed for:

  1. PC and Ultra-Thin Laptops and Notebooks inspired by the Apple MacBook Air
  2. RAID-based Cloud-Storage adoption by Silicon Valley as Broadband Speeds approach 1GBps and 1TBps.

RAID (Redundant Array of Inexpensive Disks or Redundant Array of Independent Disks) is the preferred architecture used in Cloud-Servers, especially Blade Servers, as it makes Mechanical Hard-Drives hot-swappable.

First the PC and the Ultra-Thin Laptops and Notebooks……..

People are transitioning to SSD, but opting to go the Hybrid Mechanical Hard-Drive route initially, as they await SSD prices to drop.

They like the speed. They don’t like the cost. Hence the Middle Ground!

Guess my article MacBook Air and FLASH-based Hard Drives: The Quest for Instant On skipped an important step: Mechanical Hard-Drive Technology, which is now at SATA (Serial Advanced Technology Attachment), has to be phased out and replaced with PATA (Parallel Advanced Technology Attachment).


Until that transition happens in PC’s being ordered from No. 1 PC Maker Dell and No. 2 PC maker HP, this SSD’s will remain “optional” and not “standard” for some time to come in PC architecture.

The device which started this trend with its overpriced predecessor in 2008AD, the ultra-thin Apple MacBook Air as chronicled in my article MacBook Air and FLASH-based Hard Drives: The Quest for Instant On.

The MacBook Air and the Apple iPad are creating a new trend that is getting serious attention of Silicon Valley titans such as Intel as CNET Writer Brook Crothers points out: low power, thinner Laptops with very long full-usage battery life.

Applause for Intel!!

It’s about time, I gripe, having suffered inexorably from Laptop failures while typing that I got used to the idea of the Laptop having to be tethered all the time to a power brick!!!

Now for the Cloud computing……..

Cloud-Based Storage and Cloud Computing is in, even here in Jamaica as my article Digicel’s Cloud Backup Services – A deep Analysis points out.

A Google ChromeBook is most certainly in my future, provided it has some support for offline computing, as I like its featherweight features and longer battery life.

The only big issues left to solve is the reliability of Jamaica’s Broadband Internet Access, which is notoriously slow, congested and unreliable, with no Telecoms Provider achieving the much coveted five 9’s i.e. 99.999% uptime.

Not to mention poor Customer Care as it relates to addresses problems with the Broadband Internet Access.

Thus Jamaica needs to go the Gigabit route soon.

Which may be occurring sooner than expected, seeing as LIME and FLOW have tag-teamed to assist the Government of Jamaica in wining the hearts and minds of the young uncommitted voters.

This by the deployment of an island wide 1GBps capable Fiber Optic Network funded by Telecoms cess deductions to the tune of JA$543 million to connect three hundred (300) schools.

Thus this deal has far reaching implications than just a regular acquisition in the works.

It indicates that the Developed World is getting serious about Cloud Computing. And with indications that Microsoft is going to the Clouds as can be seen from its Cloud-Based Office 365, which is a marked improvement over WordPad-quality Google Docs, Jamaica needs to ride the Cloud Revolution and the cost efficiencies it brings or possibly in the future be unable to use Microsoft Windows 8, which may be going Cloud.

Otherwise we might find ourselves, as a Developing World Country, watching the Rains of Profitability that Cloud can bring fritter away in due to our lack of interest in Entrepreneurial and VC (Venture Capital) pursuits as lamented in my article Jamaica’s Low Net Penetration – Broadband Internet A Universal Right !!!

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Lindsworth is a Radio Frequency and Generator Maintenance Technician who has a knack for writing about his work, which is in the Telecoms Engineering Field. An inspired writer on themes as diverse as Autonomous Ants simulations, Power from Lightning and the current Tablet Wars.