Seagate—Why Integration Is a Hardware Must
Tuesday, August 26th, 2008I would like to elaborate on a point that I touched on at the end of my last blog: component integration in the cleantech industry. The trend in cleantech towards innovative hardware components means that hardware companies are integrating with one another to create the best possible solution, which in turn produces the largest profit.
The benefits of integration aren’t exactly new news, but let’s put today’s cleantech hardware companies in perspective by visiting the significance of Seagate Technology. Seagate’s creation of the first hard disc completely revolutionized the computing industry. However it was their partnership with Control Data Corporation (CDC) that further propelled their success.
Seagate Technology was the first to create a hard disc to fit the 5.25-inch form factor of the PC “mini-floppy” drive, ST-506. Seagate revolutionized the amount of data that could be stored in set space. Their new technology was selected by IBM and negotiated for a large volume contract. Seagates relationship with IBM allowed them to build a powerful distribution channel. Seagate management believed that vertical integration of key components was crucial in the face of competition. This mentality spurred Seagate’s purchase of Control Data Corporation CDC’s voice-coil and disk-manufacturing patents. This gave Seagate access to a high-end server customer base and the first 5,400 drives on the market (the CDC Elite series). Seagate quickly began to leverage vertical integration across its entire product line and became a dominant force. Seagate’s vision for integration has taken them down a successful path with innovations like first palm-sized external-storage device that could hold 5 gigabytes of data and on June 2, 2008, they announced a 2.5-inch enterprise solution (Savvio 10K.3 hard drive) which consumes 70% less power than traditional 3.5-inch drives and offered 300 gigabytes of capacity.
Seagate is a prime example of a hardware company that recognized the need for integration. I think cleantech hardware companies are realizing that they would be smart to follow the same path.