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It's going to be a vicious cycle as well (or virtuous depending on your point of view). As demand for HDDs weakens, investments in R&D will be scaled back sign

It's going to be a vicious cycle as well (or virtuous depending on your point of view). As demand for HDDs weakens, investments in R&D will be scaled back significantly. HDDs are in trouble even if you assume they'll follow the same capacity ramp they once did. If they slow down, they're toast. (Although SSDs may also hit a wall scaling down; the low hanging fruit may already be picked.)

wtallis 7y ago
We're already past the point where hard drive R&D is driven solely by datacenter needs; nobody was working on 14+ TB hard drives with the expectation that consumers would be a non-trivial part of that market segment, except indirectly through cloud storage.
- reitzensteinm 7y ago
  Typically improvements come in the form of the density of the bits you're storing on a platter, which is just as relevant to a single platter or five (or even seven platter helium drives). SMR is an example of something that's relevant to all datacenter use, but only perhaps half of consumer use. And of course helium itself is pretty much datacenter focused only. The linked article has the datacenter share last year as 13.6% of all units (but growing shipments). Looking at Seagate's last filing, they had $601m gross profit last quarter, and an R&D spend of $238m had to come out of that. I don't see how you scale the company down to a fifth of its size and maintain anything like the R&D velocity it once had; and once it slows down, the band of competitiveness of HDD over SSD even for datacenter use is going to continuously narrow. A complete collapse of the HDD market after a decade is not unthinkable, unless SSD progress hits a wall. (Of course Seagate does make some SSDs, which I'm not accounting for, but taking the time to separate it isn't going to meaningfully change the picture.)
  - wtallis 7y ago
    Nidec divides the hard drive market into 5 segments: PC, External, Consumer Electronics, Datacenter, Enterprise. One of those five segments is crashing. External and Consumer Electronics are contracting slowly but will still be a cash cow for a while because those drives are still selling but don't require much if any R&D. Datacenter and Enterprise are basically the same for R&D purposes, and together are growing slightly. There's a big difference between Seagate suffering the loss of (half of) one of those five market segments, and scaling the company down to a fifth of its size. Yes, they'll have a harder time funding R&D, but they're quite a ways off from having to drastically slash their R&D budget.

wtallis 7y ago

We're already past the point where hard drive R&D is driven solely by datacenter needs; nobody was working on 14+ TB hard drives with the expectation that consumers would be a non-trivial part of that market segment, except indirectly through cloud storage.

reitzensteinm 7y ago
Typically improvements come in the form of the density of the bits you're storing on a platter, which is just as relevant to a single platter or five (or even seven platter helium drives). SMR is an example of something that's relevant to all datacenter use, but only perhaps half of consumer use. And of course helium itself is pretty much datacenter focused only. The linked article has the datacenter share last year as 13.6% of all units (but growing shipments). Looking at Seagate's last filing, they had $601m gross profit last quarter, and an R&D spend of $238m had to come out of that. I don't see how you scale the company down to a fifth of its size and maintain anything like the R&D velocity it once had; and once it slows down, the band of competitiveness of HDD over SSD even for datacenter use is going to continuously narrow. A complete collapse of the HDD market after a decade is not unthinkable, unless SSD progress hits a wall. (Of course Seagate does make some SSDs, which I'm not accounting for, but taking the time to separate it isn't going to meaningfully change the picture.)
- wtallis 7y ago
  Nidec divides the hard drive market into 5 segments: PC, External, Consumer Electronics, Datacenter, Enterprise. One of those five segments is crashing. External and Consumer Electronics are contracting slowly but will still be a cash cow for a while because those drives are still selling but don't require much if any R&D. Datacenter and Enterprise are basically the same for R&D purposes, and together are growing slightly. There's a big difference between Seagate suffering the loss of (half of) one of those five market segments, and scaling the company down to a fifth of its size. Yes, they'll have a harder time funding R&D, but they're quite a ways off from having to drastically slash their R&D budget.