Category Archives: Western Digital

M&A, News & Analysis, SanDisk, Western Digital

$19 billion Western Digital acquisition of SanDisk gets EC approval

Disk CloudThe European Commission has announced its approval of the proposed take over of storage vendor SanDisk by Western Digital. The merger of the two US-based storage rivals will not adversely affect competition in Europe, the EC has ruled.

In October 2015 BCN reported that Western Digital had announced plans buy chip maker SanDisk for around $19 billion. Flash specialist SanDisk is ranked by IDC as the largest manufacturer of NAND flash memory chips. The capacity of NAND Flash Memory products to store data in a small footprint, while simultaneously using less power but granting faster access to data, has made NAND the storage technology of choice in data centres that support cloud computing.

The market for NAND flash chips was worth $28.9 billion in 2014, according to IDC.

The Commission found that the only overlap between the activities of the hard disk manufacturers is in selling flash memory storage systems and solid-state drives to the enterprise market. In this case, the effects of the merger on competition will be minimal, it has ruled, despite their relatively high combined market share. The presence of Intel, Toshiba, Micron and Samsung in the same market will exert sufficient competitive pressure to prevent the creation of a Western Digital hegemony, the European Commission has ruled.

The Commission also investigated the vertical link between SanDisk’s production of flash memory and the downstream markets for enterprise flash memory storage systems. With flash memory an essential component of solid state drives and other flash memory storage systems the EC investigators have researched whether Western Digital will be in a position to block competitors from access to flash memory.

It also studied the likelihood that competing producers of flash memory might find themselves with an unsustainable customer base. However, SanDisk’s presence on the upstream flash memory market was judged as ‘limited’ and the presence of several active competitors makes this a manageable risk.

“This multi-billion dollar deal can go ahead without delay,” said competition policy commissioner Margrethe Vestager.

distributed storage, IBM, News & Analysis, Storage as a Service, Western Digital

Western Digital and IBM in distributed storage license agreement

StorageIBM and Western Digital have announced that they are entering into an intellectual property sharing arrangement, in the form of a formal patent cross-license agreement. Terms of the transaction have not been disclosed.

According to a statement on Western Digital’s website it has bought 100 patent assets from IBM, which relate to IBM inventions for distributed storage, object storage and emerging non-volatile memory. Western Digital said the intellectual property has been selected to be used in conjunction with its existing portfolio of 10,000 patents and patent applications.

Non-volatile memory is an emerging technology sector contested by Intel, Micron and HGST, with technologies such as 3D XPoint and Phase Change Memory. IBM demonstrated its own PCM device in May 2014.

IBM has led the annual list of U.S. patent recipients for 23 consecutive years. In 2015 it broke its record for the number of patents (7,355 patents) it applied for. Though it is developing new inventions across a diverse range of technology fronts, IBM has said that it is putting a strong emphasis on developing cognitive systems and cloud platforms as the company positions itself to try to regain leadership in a new era of computing.

The challenge IBM is undertaking is to find a way to help humans and machines connect across the cloud and collectively be more productive than they have ever been before, according to Thomas Malone, director of the Center for Collective Intelligence at MIT.

This particular agreement is about making rapid advancement and monetising of new data storage solutions, according to Western Digital. “We are building on our long-standing relationship and look forward to future collaborations and business opportunities,” said Mike Cordano, chief operating officer for Western Digital.

Content & Applications, News & Analysis, Storage as a Service, Western Digital

Data consumption outgrows personal storage capabilities – research

Cloud storageThe sheer weight of data is growing far too fast for personal storage devices to cope, says new research which will delight device makers and disappoint cloud storage providers, if true. The study suggests that the majority of consumers are stressed by the prospect of deleting their content to overcome capacity issues. The only way to cope with the newly identified syndrome, Post Deletion Stress Disorder (PDSD), is to buy more capacity. However, they want to own the device that stores their data, rather than rent it, says Western Digital.

According to the independent study conducted on storage device maker WD’s behalf, 56% of UK consumers have been forced to delete content from a technology device, due to capacity issues, and regretted it. Researcher Vanson Bourne, which talked to 1,000 UK consumers, found that 7% are running out of storage on their mobile daily, 16% are reaching full memory at least weekly and 31% run out of storage capacity at least monthly.

However, given a choice, consumers generally prefer to own storage outright, rather than rent it, it claimed. Meanwhile storage allocations on devices are being pushed with 77% downloading an app to a mobile device at least monthly, and around one third (33%) downloading a feature film to a mobile device this often. Photographs take up the most storage capacity across a range of consumer devices, while 44% of consumers admit they ‘don’t know’ what content is taking up storage capacity on their devices.

With 44% of the survey sample trying to manage on just 64GB of device storage not enough people (just 33%) have invested in an external hard drive to solve their storage problems, says WD a maker of external hard drives. By contrast, just 2% of those surveyed use a paid cloud storage service and only 16% use a free cloud storage service.

“Clearly consumers are sacrificing precious memories and valuable content to make more space on their devices,” said Jim Welsh, general manager of Content Solutions at WD, “we believe consumers will look for external storage solutions that bring more value with features that help them store, share and backup their digital content from mobile devices and computers.”

Corporate, IDC, M&A, News & Analysis, SanDisk, Western Digital

Western Digital buys SanDisk for $19 billion for its cloud driving flash

Disk CloudHard disk vendor Western Digital is to buy chip maker SanDisk for around $19 billion as the consolidation of chip-making industry continues.

Flash specialist SanDisk is one of the largest makers of NAND flash memory chips. The capacity of NAND Flash Memory products to store data in a small footprint, while simultaneously using less power but granting faster access to data, has made this technology particularly popular in the mobile, internet of things and data centre sectors, Increasingly, according to analysts, NAND is becoming the storage technology of choice in data centres that support cloud computing.

The market for NAND flash chips rose to $28.9 billion in 2014, according to IDC and SanDisk (with joint venture partner Toshiba) was the largest producer.

Meanwhile the market for traditional disk drives, where Western Digital is a market leader, is declining, say analysts. The commoditisation of hardware, driven by the software definition of data centres, has seen profit margins on sales decline, even if volumes are up.

Western Digital had a leading 44% share of the market for hard disk drives in 2014, according to statistics from market researcher IDC. However, it suffered a sales decline of 4% in its most recent financial year and the overall storage business also shrank, to $32.9 billion.

“With new storage companies coming through with all-flash systems based on consumer-grade substrate, it is not in WD or Seagate’s best interests to try and do economies of scale aimed more at the enterprise only,” said analyst Clive Longbottom, senior director at research company Quocirca. “By buying up consumer flash companies, they get that economy of scale for themselves.”

The disruption of the IT manufacturers by the cloud has changed the strategies of the encumbents like Western Digital, said Longbottom. “ Dell, HP, IBM and others do seem to be more worried about the new kids on the block than each other at the moment,” said Longbottom.

The cash-and-stock offer values SanDisk at $86.50 per share, or a total equity value of about $19 billion, using a five-day volume weighted average price ending on Oct. 20 of $79.60 per share of Western Digital stock. SanDisk’s shares rose 6.4% to $80 in pre-market trading. Western Digital’s shares were down 1.1% at $74.

The deal is expected to close in the third calendar quarter of 2016.