WD buys Hitachi GST: the good and the bad

WD buys Hitachi GST: the good and the bad

Summary: Another one bites the dust. Western Digital's acquisition of Hitachi's disk business means some things that consumers will like and things consumers won't. In the big picture it is a continuation of the slowdown in core IT technologies.

TOPICS: Storage, Hardware

Another one bites the dust. Western Digital's acquisition of Hitachi's disk business and means some things that consumers will like and some things consumers won't. In the big picture it is a continuation of the slowdown in core IT technologies.

Besides making WD the world's largest disk drive firm, the acquisition eliminates a perennial weak sister in the disk drive business. Hitachi has struggled since they acquired IBM's disk business to make it profitable.

Hitachi recently succeeded in that goal, but the $4.3 billion price just covers the cost of the IBM acquisition and the losses they've taken since then. Hitachi came out whole, barely.

The good

  • WD is the world's most efficient manufacturer of hard drives. The efficiencies range from their drive yields – commonly the highest in the industry – to the extremely lean corporate staff they've had for years.
  • The Hitachi product line and OEM relationships will expand WD's market reach. This means more competition for Seagate, longtime leader in high-end enterprise drives.
  • Capital requirements for the next generation of drive technology – patterned media and heat assisted magnetic recording – are enormous, much like the cost required to build new chip fabs. A larger company can bear those costs were easily.
  • If the physics and the materials science cooperate that means we'll continue to have higher capacity drives for at least another decade.

The bad

  • Bargain hunter alert: with one less, sometimes desperate, competitor on the field of we won't see as many firesale pricing events.
  • The per gigabyte price declines we've seen for years won't be as steady or a steep. Beginning next year expect to see annual price declines drop to about 30% per gigabyte per year, down from the traditional 40 to 50% declines in we've seen for years.
  • The pressure on the remaining drive vendors – Toshiba, Seagate and Samsung – to consolidate will increase. The world only needs three hard drive manufacturers and it looks like we'll soon be there.
  • The rate of technological improvement will slow. The investments in next-generation hard drive technology will be easier to finance, but the urgency to bring them to market will decrease.

The Storage Bits take After more than 50 tumultuous years of wild innovation that saw hundreds of disk drive companies come and go the industry is moving into end-stage maturity. Once down to three or four vendors and no new markets - other than archive-quality disks - it comes down to wringing out modest improvements from stepwise enhancements day after day, year after year.

Inevitably, the slowdown in capacity improvements and price declines will shift the opportunities for technological innovation from drives to how we architect the systems that use the drives.

New filesystems, lower cost interconnects and novel nonvolatile memory techniques will all enable improved ways of utilizing venerable disk drive technologies. But like the slowdown in CPU improvement, the slowdown in drive technology will have a long-term and profound impact on how we manage and use massive data.

Comments welcome, of course. I like WD's approach to business. All in all, the good outweighs the bad for the industry and consumers.

Topics: Storage, Hardware

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  • RE: WD buys Hitachi GST: the good and the bad

    I've had way too many failures of WD drives, second worst to Samsung for me.
    • Every brand fails

      @explodingwalrus, out of thousands of drives installed over the years I have seen every brand fail. Each manufacturer has produced some great drives, and some lemons. Overall, though, I have had fewer failures with WD drives than the others, and have found WD to be great to deal with on warranty returns. If you check the companies that track reliability data you will find that WD is at the top of virtually every list.
    • RE: WD buys Hitachi GST: the good and the bad

      See I've heard horror stories about seagate. People I work with dislike them, my buddy lost all of his music and most of his pictures because one of segate's external drives died, and I've had my drive wiped from Maxtor which is owned by Segate, although I don;t believe they were when my drive reset itself; again it was an external.
      • RE: WD buys Hitachi GST: the good and the bad

        @KBot Actually, your buddy lost his files because he didn't backup.
  • SSD's

    When will those remaining companies start mass producing SSD's? The time for SSD's is now!
    • Not there yet, and maybe never will be

      @dcowsky@..., SSDs are expensive, and their failure rate has been troubling. Yes, they are faster (at least at first), but for those applications that need large storage capacity magnetic media drives are still the way to go.
      • RE: WD buys Hitachi GST: the good and the bad

        I think it's like all things, you increase size and the failure rate increases for a while until they get the bugs out. remember when flash drives were horrible, wiping out constantly? They aren't so bad now. In a while when SSDs have been around for a few years you will see vast improvements in their failure rates.
  • IBM Deathstar

    Let us take a moment to mourn the loss of the IBM Deskstar design, which was part of the disk business that IBM sold to Hitachi. Never have so many drives gone click-click-click so soon after purchase, in so many systems.
    Robert Hahn
  • maybe hitachi will go to solid state drives

    moot point then....
    sparkle farkle
  • RE: WD buys Hitachi GST: the good and the bad

    I had a WD Green 2TB in an Astone enclosure that came up faulty under windows 7. It had been used under XP for 5 months. When I say used it would have been turned on and run maybe 8 times for about 30 minutes to an hour. I also had a Seagate 1Tb also used in an Astone enclosure. It was a year old used in the same fashion. Then I pulled it out of the external enclosure and put it in the pc when I got the 2Tb model. So in that same 4 months it then completely failed as in not recognised by bios. So I had the Seagate go off for RMA and then the WD went off. I've had one other Seagate 250Gb replaced. An 80Gb Seagate failed in another PC. I'd still buy a Seagate Green 2Tb if my WD Green failed. I do think my next drive will be a 3Tb Hitachi 7K3000 Deskstar or X2 (Raid 1). My next External will probably be a WD 3Tb My Book. I like to backup all the internal onto external, and now I have a RAID capable motherboard I can get 3 copies of my data at one time. So if a drive needs RMA I still have 2 data copies.
  • RE: WD buys Hitachi GST: the good and the bad

    I think the author would be less enthusiastic about the acquisition if it was an American company taken over by a Japanese one. WD sucks and it's sad to see the best manufacturer in terms of quality and product specifications transparency leave the stage. Contrary to WD and Seagate Hitachi lets you know what is inside the product you buy. For the less technically inclined: I'm talking about the heads/platter ratio et cetera.