Seagate and Western Digital are drastically cutting the length of the warranties on many of their hard drives, leaving buyers with less protection if the products fail.
Seagate and Western Digital have separately announced plans to cut the length of their hard-drive warranties. Photo credit: Seagate
On Friday, both companies confirmed the move, which they had previously communicated to their distributors. Seagate is reducing warranties to as short as one year, while Western Digital will now guarantee its Caviar Blue, Caviar Green and Scorpio Blue drives for two years, as opposed to three.
"Seagate is standardising its warranty terms to be more consistent with those commonly applied throughout the consumer electronics and technology industries," the company said in a statement.
"The new warranty periods apply to some of Seagate's internal hard drives designed for laptops, desktops and consumer electronics devices. There is no warranty change to mission-critical enterprise drives or Seagate-branded external solutions," it added.
Western Digital is buying Hitachi Global Storage Technologies — one of its main competitors — while Seagate recently acquired Samsung's disk-drive division. With this consolidation, the hard-drive industry is increasingly led by its two key players: Seagate and Western Digital.
"The bottom line is that this is the result of reduced competitive pressure in the market place," Daniel Bizo, a research analyst in IDC's European Storage Group, told ZDNet UK. "Basically, what you see is the increased concentration of players and market shares... Changing the warranty enables them to instantly increase their top line [profits]."
This is something they can get away with because there is reduced competition. – Daniel Bizo, IDC
"This is something they can get away with because there is reduced competition," he added.
Though Western Digital's manufacturing capacity took a huge hit from Thailand's severe floods, a spokesman for the company said the warranty changes are independent of its recovery from the disaster.
However, Bizo believes the loss in profits from the flooding could have put pressure on the company to cut costs. "These manufacturers — they were hit hard by the floods, and because they are publicly traded, they have massive pressure on them to recover lost profits," he said. "Getting back the warranty is going to help your top line and in the long run lower your costs — so it's a double win for them."
Western Digital's new warranties take effect from 2 January, while Seagate's come in on 31 December. For Western Digital, only the Caviar Blue, Caviar Green and Scorpio Blue models are affected.
For Seagate, its nearline drives now have warranty periods of three years, down from five years. Its desktop drives now have one year of protection, apart from the Barracuda XT series, which has gone down from five years to three years. Laptop drives, some of which carried five-year guarantees, are now protected for a year, apart from the Momentus XT, which has three years of protection. Drives for consumer electronics devices now have a two-year warranty, compared with as much as five years previously.
Bizo noted that hard-disk drives, being highly mechanical, have a limited lifetime depending on their workloads and temperatures. For enterprises, a change in warranty terms could have a significant impact, he said.
"In the case of bigger installations with storage arrays using hundreds or thousands of disks, you can have an issue every couple of weeks," he said. "If those pieces are failing beyond their warranty, that means substantial replacement cost."