Western Digital Acquires Hitachi Global Storage TechnologiesBy: Zach Walton - March 9, 2012
Most consumers probably don’t care where their hard drives come from, but the news today is sure to make some people happy or mad.
Western Digital announced yesterday that it has acquired Hitachi Global Storage Technologies to the tune of $3.9 billion and 25 million shares valued at $0.9 billion. To sweeten the deal even further, Hitachi now owns 10 percent of Western Digital shares and it can appoint two people to Western Digital’s board of directors.
WD technologies and HGST will both operate under the WD banner as wholly owned subsidiaries. In 2011, the two companies made about $15 billion combined. WD’s CEO, John Coyne, will remain as CEO of the new venture.
“The completion of this acquisition is a truly momentous event in the 42-year history of our company,” said Coyne. “With ownership of two successful companies and the best talent available in the industry, we expect to accomplish great things as we build the new WD to be the world’s leading storage solutions provider with the industry’s deepest technology capability, broadest product portfolio and best-in-class execution. Similar to successful multi-brand models in other industries, the two subsidiaries will compete in the marketplace with separate brands and product lines while sharing common values of customer delight, value creation, consistent profitability and growth.”
The news could not have come at a better time as hard drive sales are at an all-time high. The growth of the hard drive business is expected to rise at the rate of 8.6 percent per year from 2011 to 2016. What’s the biggest driver in hard drive sales? If you guessed cloud computing, you would be right on the money. They aren’t the only ones though as mobility, social business and big data analytics are all driving increased hard drive storage sales.
WD CEO Coyne says that while they are still seeing success in traditional markets, new sales from enterprise solid-state drives, storage solutions for small businesses and low-profile HDDs and hybrid drives for Ultrabooks is what’s driving their current growth.
The Verge pointed out that this acquisition makes Western Digital the largest hard drive manufacturer in the world. Now that they’re here, does this mean that we’re going to get cheaper solid state drives? I’m still not entirely on board with paying $300 for half the storage of what that money would get me in a traditional hard drive.