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Western digital acquires Hitachi Global Storage Tech for $4.3B

84 points by yread 16y ago

deleted 16y ago
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- deleted 16y ago
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- larrik 16y ago
  There is SO much wrong with that comment: 1) Employees are not a metric of a company's value. It's like measuring a program's value by lines of code. 2) The comparison is completely irrelevant: a) Facebook is a software-only internet startup that has the serious potential of eventually being the biggest web company ever. b) Hitachi is a mature hardware company and manufacturer dealing in a market with rather slim margins and serious credible competition (well, now it's just the two companies with decent spinning-disk-drives.) That's really not any more appropriate a comparison than comparing Facebook to, say, Toyota.
  - deleted 16y ago
    [deleted]
  - moe 16y ago
    You make a few valid points, however I think scrrr's reaction is justified as well. a) Facebook is a software-only internet startup that has the serious potential of eventually being the biggest web company ever. Ignoring the hyperbole for a moment I'd argue that there's still a gap between "has the potential" and "is today". According to wikipedia Hitachi is the third largest technological company by revenue as of 2009. Hitachi does state as profit about the same amount that facebook states as revenue. Hitachi has also been around 94 years longer than facebook. That suggests there's probably not too much untapped potential remaining. But it also suggests that Hitachi is less likely to suddenly disappear overnight only because some teenager accidentally created a "hitachi-killer" in his basement...
    - bryanlarsen 16y ago
      Note for those confused by this conversation, the original headline implied that WD acquired all of Hitachi for $4.3 billion. Hitachi had revenue of $96 billion in 2010, so that would have been a pretty sweet deal. :)
bryanlarsen 16y ago
Bad headline: WD acquired Hitachi Global Storage Technologies. The Hitachi company itself is a monster that makes WD look like a mom & pop operation. What you see as a consumer is dwarfed by its industrial products and much, much more.
- scrrr 16y ago
  Indeed. I've deleted my posts below as they make no sense with what you correctly pointed out.
- yread 16y ago
  Corrected
- Splines 16y ago
  There's something about these large Japanese conglomerates that just don't seem to have any parallel in the US. GE might be the closest thing, but even though it's a larger company it doesn't seem to have the finger-in-every-pie feel that these Asian conglomerates do (e.g., Hyundai, Fuji, Mitsubishi, ...)
  - asnyder 16y ago
    The US definitely has parallels. You can take almost any brand, and trace it back to a handful of large corporations. The Japanese are just more open about it, whereas US companies have subsidiaries that falsely suggest competition.
yread 16y ago
Hitachi hard disks had highest failure rates. http://www.hardware.fr/articles/810-6/taux-pannes-composants.html http://www.hardware.fr/articles/810-6/taux-pannes-composants...
- wazoox 16y ago
  In the past few years, they had the lowest failure rate, by a large margin, on professional grade drives. I say that having set up and sold many thousands hard drives since 2003.
joeybaker 16y ago
The business calculus is a bit strange here. WD and Hitachi are in the part of the storage market that has to be pretty close to it's peak. The HDD business seems to have grown in 2010 http://www.eetimes.com/electronics-news/4213390/Western-Digital-grabs-disk-drive-lead http://www.eetimes.com/electronics-news/4213390/Western-Digi... but it's pretty doubtful that the trend will continue, and it seems like there's a pretty sharp cliff coming. That in mind, why pay $4.3B for a company that only has 2-5 years left in a dying, $0.6B industry that has low profit margins?
- ojbyrne 16y ago
  It's a little difficult to interpret, but that's 0.6 billion units shipped, not $0.6 billion.
- jonknee 16y ago
  You're severely underplaying the HD storage market's revenue. Western Digital alone had nearly $10 billion in revenue last year. Also, Hitachi GST is a partner of Intel's for SSDs... Seems like a good acquisition for WD.
- siromega 16y ago
  The price might be high, but I figure this (consolidation of market participants) is normal in a market that is peaking or on the decline.
- sitkack 16y ago
  Now that top tier drive maker has acquired the 2nd or 3rd tier maker expect storage prices to go up. Seagate isn't the competition it used to be.
- rosser 16y ago
  This isn't just about hard drives. Hitachi Storage also makes some pretty huge -- and well-regarded -- SANs, and enterprise storage is one area into which I've never really seen WD make much headway. This acquisition would make them a full-spectrum player in the storage market. Enterprise storage is also an area with rather higher profit margins than merely hawking spinning rust.
amitraman1 16y ago
WD stock is up today. IT seems like a great deal, WD can now sell more aggressively to businesses.
jamesbressi 16y ago
Maybe you forgot this? Hitachi School House Rock video... http://www.youtube.com/watch?v=xb_PyKuI7II http://www.youtube.com/watch?v=xb_PyKuI7II "Get Perpendicular" Hitachi Global Storage Technologies.

84 points by yread 16y ago

deleted 16y ago

[deleted]

deleted 16y ago
[deleted]
larrik 16y ago
There is SO much wrong with that comment: 1) Employees are not a metric of a company's value. It's like measuring a program's value by lines of code. 2) The comparison is completely irrelevant: a) Facebook is a software-only internet startup that has the serious potential of eventually being the biggest web company ever. b) Hitachi is a mature hardware company and manufacturer dealing in a market with rather slim margins and serious credible competition (well, now it's just the two companies with decent spinning-disk-drives.) That's really not any more appropriate a comparison than comparing Facebook to, say, Toyota.
- deleted 16y ago
  [deleted]
- moe 16y ago
  You make a few valid points, however I think scrrr's reaction is justified as well. a) Facebook is a software-only internet startup that has the serious potential of eventually being the biggest web company ever. Ignoring the hyperbole for a moment I'd argue that there's still a gap between "has the potential" and "is today". According to wikipedia Hitachi is the third largest technological company by revenue as of 2009. Hitachi does state as profit about the same amount that facebook states as revenue. Hitachi has also been around 94 years longer than facebook. That suggests there's probably not too much untapped potential remaining. But it also suggests that Hitachi is less likely to suddenly disappear overnight only because some teenager accidentally created a "hitachi-killer" in his basement...
  - bryanlarsen 16y ago
    Note for those confused by this conversation, the original headline implied that WD acquired all of Hitachi for $4.3 billion. Hitachi had revenue of $96 billion in 2010, so that would have been a pretty sweet deal. :)

bryanlarsen 16y ago

Bad headline: WD acquired Hitachi Global Storage Technologies. The Hitachi company itself is a monster that makes WD look like a mom & pop operation. What you see as a consumer is dwarfed by its industrial products and much, much more.

scrrr 16y ago
Indeed. I've deleted my posts below as they make no sense with what you correctly pointed out.
yread 16y ago
Corrected
Splines 16y ago
There's something about these large Japanese conglomerates that just don't seem to have any parallel in the US. GE might be the closest thing, but even though it's a larger company it doesn't seem to have the finger-in-every-pie feel that these Asian conglomerates do (e.g., Hyundai, Fuji, Mitsubishi, ...)
- asnyder 16y ago
  The US definitely has parallels. You can take almost any brand, and trace it back to a handful of large corporations. The Japanese are just more open about it, whereas US companies have subsidiaries that falsely suggest competition.

yread 16y ago

Hitachi hard disks had highest failure rates. http://www.hardware.fr/articles/810-6/taux-pannes-composants.html http://www.hardware.fr/articles/810-6/taux-pannes-composants...

wazoox 16y ago
In the past few years, they had the lowest failure rate, by a large margin, on professional grade drives. I say that having set up and sold many thousands hard drives since 2003.

joeybaker 16y ago

The business calculus is a bit strange here. WD and Hitachi are in the part of the storage market that has to be pretty close to it's peak. The HDD business seems to have grown in 2010 http://www.eetimes.com/electronics-news/4213390/Western-Digital-grabs-disk-drive-lead http://www.eetimes.com/electronics-news/4213390/Western-Digi... but it's pretty doubtful that the trend will continue, and it seems like there's a pretty sharp cliff coming. That in mind, why pay $4.3B for a company that only has 2-5 years left in a dying, $0.6B industry that has low profit margins?

ojbyrne 16y ago
It's a little difficult to interpret, but that's 0.6 billion units shipped, not $0.6 billion.
jonknee 16y ago
You're severely underplaying the HD storage market's revenue. Western Digital alone had nearly $10 billion in revenue last year. Also, Hitachi GST is a partner of Intel's for SSDs... Seems like a good acquisition for WD.
siromega 16y ago
The price might be high, but I figure this (consolidation of market participants) is normal in a market that is peaking or on the decline.
sitkack 16y ago
Now that top tier drive maker has acquired the 2nd or 3rd tier maker expect storage prices to go up. Seagate isn't the competition it used to be.
rosser 16y ago
This isn't just about hard drives. Hitachi Storage also makes some pretty huge -- and well-regarded -- SANs, and enterprise storage is one area into which I've never really seen WD make much headway. This acquisition would make them a full-spectrum player in the storage market. Enterprise storage is also an area with rather higher profit margins than merely hawking spinning rust.

amitraman1 16y ago

WD stock is up today. IT seems like a great deal, WD can now sell more aggressively to businesses.

jamesbressi 16y ago

Maybe you forgot this? Hitachi School House Rock video... http://www.youtube.com/watch?v=xb_PyKuI7II http://www.youtube.com/watch?v=xb_PyKuI7II "Get Perpendicular" Hitachi Global Storage Technologies.