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Western Digital acquires Hitachi, will dominate HDD market

Posted at 09 March 2011 00:34 CEST by wconeybeer

Two of the major players in the digital storage industry joined forces on Monday as Western Digital (WD) acquired Hitachi Global Storage Technologies (GST) for $3.5 billion in cash, and an additional 25 million stock shares worth $750 million.

The acquisition makes WD the dominant company in the global HDD & SSD markets with a 49% share of shipments, nearly double that of the now #2 supplier, Seagate.

“This brings together two industry leaders with consistent track records of strong execution and industry outperformance,” said Steve Milligan, Hitachi GST president and CEO, in the press release announcing the deal. “Together we can provide customers worldwide with the industry’s most compelling and diverse set of products and services, from innovative personal storage to solid state drives for the enterprise.”

“We believe this step will result in several key benefits-enhanced R&D capabilities, innovation and expansion of a rich product portfolio, comprehensive market coverage and scale that will enhance our cost structure and ability to compete in a dynamic marketplace,” added John Coyne, president and CEO of WD. “The skills and contributions of both workforces were key considerations in assessing this compelling opportunity.”

The deal actually serves to give WD more of a boost in the enterprise storage market than with consumer products, where margins are much lower on sales. Before the acquisition, WD’s share of the enterprise market was a mere 1%, a stark contrast to Hitachi’s 27% share.

Now that the industry only has 3 remaining key players (Seagate, Toshiba and Samsung), consumers are finding themselves having to either deal with the acquisition or overcome long-standing grudges. HDD and SSD buyers are quite loyal to their favorite brand with a special loathing for the competition, as comments on Tom’s Hardware following the announcement reveal.

Personally, I find it disappointing that an industry with such little competition now has even less, but I do believe that WD made a smart move that will largely benefit the company’s operations. Hopefully, pricing and quality of SSD and HDD’s will both remain competitive despite the deal.

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There are 23 comments

olddancer
MyCE Senior Member
Posted on: 09 Mar 11 01:20
    If Hitachi can raise WD"s manufacturing standards, wonderful.
    If WD brings Hitachi drives down to WD standards then I'll be looking
    for a SSD! I've found WD drives to be about as reliable as a Politician's
    Promise the day after the Election.
    RichMan
    CD Freaks Expert
    Posted on: 09 Mar 11 02:21
      I agree with olddancer. I currently have six Hitachi drives (two in RAID 1 and four in RAID 0+1) that have been excellent in performance and reliability. It would be a shame if the quality dropped down to that of WD drives that I have used in the past.
      AIRBUD7
      MyCE Member
      Posted on: 09 Mar 11 02:27
        I got a WD TV HD media player a few months back, Plays anything I throw at it, The kids(teenagers) use it every day, nice product!!!
        debro
        Blown to smitherines
        Posted on: 09 Mar 11 03:00
          Hitachi -> Faster HDD's ...
          WD -> Die early HDD's ...

          Hitach+WD -> Die early Faster HDD's
          olyteddy
          Senior Moderator
          Posted on: 09 Mar 11 03:41
            coolcolors
            MyCE Resident
            Posted on: 09 Mar 11 06:09
              Quote:
              Originally Posted by debro
              Hitachi -> Faster HDD's ...
              WD -> Die early HDD's ...

              Hitach+WD -> Die early Faster HDD's

              And this is based on????
              coolcolors
              MyCE Resident
              Posted on: 09 Mar 11 06:10
                Quote:
                Originally Posted by RichMan
                I agree with olddancer. I currently have six Hitachi drives (two in RAID 1 and four in RAID 0+1) that have been excellent in performance and reliability. It would be a shame if the quality dropped down to that of WD drives that I have used in the past.
                Based on????
                coolcolors
                MyCE Resident
                Posted on: 09 Mar 11 06:11
                  Quote:
                  Originally Posted by olddancer
                  If Hitachi can raise WD"s manufacturing standards, wonderful.
                  If WD brings Hitachi drives down to WD standards then I'll be looking
                  for a SSD! I've found WD drives to be about as reliable as a Politician's
                  Promise the day after the Election.
                  That statement couldn't be farther from the truth...at least the HDD is more transparent and can't lie....
                  Zzyzxroad
                  MyCE Senior Member
                  Posted on: 09 Mar 11 06:44
                    Seemed to me my family and myself had problems with WD drives all the time. I always use Seagate Barracuda now. Cant say I've ever sen a Hitachi drive in a computer shop.
                    Blu-rayFreak
                    MyCE Resident
                    Posted on: 09 Mar 11 17:36
                      Less competition is always bad for the consumer, for that reason alone, I'm bummed on this acquisition.
                      Dee
                      Senior Administrator and Reviewer
                      Posted on: 09 Mar 11 18:29
                        Quote:
                        Originally Posted by Blu-rayFreak
                        Less competition is always bad for the consumer, for that reason alone, I'm bummed on this acquisition.
                        Those are my feelings too.

                        Regarding WD
                        I've had no luck with them, and now only use Samsung.
                        ivid
                        MyCE Resident
                        Posted on: 09 Mar 11 19:34
                          Um, what about Seagate ? They bought Maxtor a few years ago, I thought this put them in a dominant position ?

                          coolcolors, WD have had a bad rap from alot of sources over the years. My company's supplier steers clear of them from their integration solutions due to lack of reliability. These guys know their stuff, the industry they and deal with very high volume of system integrations per year.

                          Alas,I experienced problems with WD drives myself and never went back.
                          I have always preferred Seagate myself, specially in the Enterprise class high end drives. My company integrates 1000's of these drives into our products every year with low failure rates.
                          Unfortunately Seagate had that firmware / drive-brick debacle a couple of years ago on some consumer class models and that sure tainted their reputation.
                          getit29
                          MyCE Resident
                          Posted on: 09 Mar 11 22:01
                            I have a mixture of a 1TB Hitachi and 2 Hitachi 2TB's hdd's and
                            2 Western Digital 1TB hdd's in my system right now and in the
                            2 external enclosures I have a 1TB Hitachi and a 500GB Western
                            Digital hdd's and the Hitachi drives are always a little faster in all
                            the benchmarks over the WD drives.

                            As for reliability they are all on par with each other as I've not.......
                            so far experienced any failures out of any of them not anything like
                            I did out of the Seagate drives I've tried to use.

                            I had a brand new 1TB Seagate die out in just a very, very short while
                            and the first replacement of it lased only a few days and its replacement
                            only lasted a few minutes out of the box before going belly up and having
                            me throw it in the trash can and not even trying to get it replaced again
                            and I swore completely off of every buying another Seagate hdd again.

                            Some of you will say it was just a recent thing for all of the bad Seagate
                            hdd's but I had bad experiences with Seagate hdd's long before the most
                            recent firmware debacle. I even had problems with Seagate hdd's as far
                            back as 2000 and then with this last bad firmware debacle that was what
                            a couple of years ago that is what really done me in on ever buying anything
                            with the Seagate name on it again.
                            debro
                            Blown to smitherines
                            Posted on: 09 Mar 11 23:41
                              Quote:
                              Originally Posted by coolcolors
                              And this is based on????
                              All of my statistically insignificant 5x WD HDD's have broken down within their useful life .. which I pretty much define as 3-4 years, after which the capacity and speed is too small and slow for palming off to some other poor sucker that needs to replace their 10yr old HDD and doesn't want to pay for it.

                              I've wiped, smashed & thrown out about 3x hitachi 2.5" HDDs which were running, up until the point I repeatedly bashed them with a hammer .....

                              Of course,, i recognise that there are 6 billion people in the world, making myself statistically insignificant, and certainly the discarded HDD's statistically insignificant ....

                              Just pointing out that my WD HDD's have all been relatively slow and the least reliable of any HDD's I've bought .. with the exception of seagate .. but I haven't bought seagate in last few years ... except a recent 2TB Seagate that was 2 for $180 about 6 months ago.

                              So I'm open to re-evaluation ....
                              debro
                              Blown to smitherines
                              Posted on: 10 Mar 11 00:12
                                Quote:
                                Originally Posted by getit29
                                I had a brand new 1TB Seagate die out in just a very, very short while
                                and the first replacement of it lased only a few days and its replacement
                                only lasted a few minutes out of the box before going belly up and having
                                me throw it in the trash can and not even trying to get it replaced again
                                and I swore completely off of every buying another Seagate hdd again.

                                Some of you will say it was just a recent thing for all of the bad Seagate
                                hdd's but I had bad experiences with Seagate hdd's long before the most
                                recent firmware debacle. I even had problems with Seagate hdd's as far
                                back as 2000 and then with this last bad firmware debacle that was what
                                a couple of years ago that is what really done me in on ever buying anything
                                with the Seagate name on it again.
                                So ... you're a spring chicken with the seagate experience, then ...

                                1997 -> First year of university ... when I was *really* poor ... I bought 1x seagate HDD with my few spare pennies (actually it was my food budget) ... had to be replaced twice ... 1st one .. broke after 30mins (during windows install .. ffs) .... next one ... broke atfter 1 day use ... the replacement broke after 2 weeks ... then I got a refund ...
                                Ok, fine, be a skeptic ... sometimes manufacturers have a bad batch ... it's just unlucky ... right

                                1998 -> Different series of Seagate HDD's ... a friend had the same as above, gave up, bought WD - not sure what happened with his WD .. probably also broke down ...

                                1999 ... My Maxtor raid 0 array was slowng down for no apparent reason, and raid monitorig program was complaining it had issues ... I ran down to the shops, bought a shiny new WD HDD, copied all my important documents to the new WD ... redefined/reformatted the raid array, reinstalled windows/etc and was 20% through the process of putting my doc's back on the raid array .. the WD HDD broke down ... FSS.

                                2001 ... a friends went through the same problem .. shiny new pair of seagate HDD's in raid .. and called me in when it broke after a few days .... FFS .... (this is when I gave up on Raid 0)
                                One of the HDD's was fubar ... was replaced ... the other HDD broke down after 2 weeks ... shop was out of seagates ... waited 3 weeks, and the "replacement" HDD was a new series ... FFS .. he demanded full refund for both drives, and bought something else.

                                2004 .... my parents got their new PC .. brand spanking new shiny seagate HDD .... after 3 months .... it started to *slooooow dooooowwwwn* for no apparent reason .... wtf? after another 2 months .. broke down .. still in warranty .. FFS - RMA'd the drive, bought them a new (samsung) HDD and palmed the RMA'd drive off to someone else that thought I was doing them a favour ... Gee I'm a bastard ...
                                tmc8080
                                MyCE Resident
                                Posted on: 10 Mar 11 00:28
                                  My last drive purchase was a 1tb caviar black drive for about $100-- about 2 months after I bought it the price dropped about $20 and is probably about only $10 less now due to supply/demand ratios.

                                  I don't see how WD merging with HItachi gets their prices lower and/or innovation in a better place. Will a stronger WD/Hitachi force Seagate to undercut them on prices?

                                  Doubtful. What this will probably motivate is smaller players samsung and toshiba into smaller market shares and force them to compete on price where they were given a pass before as there were enough similarly priced product. What we're looking for is the competition and market conditions when we get to 4tb internal hard drives for desktops and 1-2tb notebook hard drives. Would be a shame if non-competition pushes the 4+tb hard drives into the less affordable range for a much longer time (12+ months, similar to blue ray burners).

                                  What will the prices and/or quality be?
                                  coolcolors
                                  MyCE Resident
                                  Posted on: 10 Mar 11 01:37
                                    Quote:
                                    Originally Posted by debro
                                    Just pointing out that my WD HDD's have all been relatively slow and the least reliable of any HDD's I've bought .. with the exception of seagate .. but I haven't bought seagate in last few years ... except a recent 2TB Seagate that was 2 for $180 about 6 months ago.

                                    So I'm open to re-evaluation ....
                                    This is more like comparing apples to oranges again without any specifications to base off or to test with. I used WD HDD IDE since they came out and only one lasted 7 years before going out and the rest I just outgrew their capacity and the switch to Sata. Relatively slow doesn't say much when there nothing to compare with the same specs to test with. Also we don't know how your hardware setup was and how you used the HDD doesn't give a full picture of the usage of the HDD to determine it MTBF of lifespan runtime. As anything how you treat your hardware or amount of dust bunnies that grow inside your case will shorten the lifespan of any hardware.
                                    debro
                                    Blown to smitherines
                                    Posted on: 10 Mar 11 03:24
                                      Quote:
                                      Originally Posted by coolcolors
                                      This is more like comparing apples to oranges again without any specifications to base off or to test with. I used WD HDD IDE since they came out and only one lasted 7 years before going out and the rest I just outgrew their capacity and the switch to Sata. Relatively slow doesn't say much when there nothing to compare with the same specs to test with. Also we don't know how your hardware setup was and how you used the HDD doesn't give a full picture of the usage of the HDD to determine it MTBF of lifespan runtime. As anything how you treat your hardware or amount of dust bunnies that grow inside your case will shorten the lifespan of any hardware.
                                      YMMV

                                      Quite frankly, I can't remember the model no# of most of my currently operating HDD's ... let alone the model no#, model revision and firmware revisions of anything 10years ago.

                                      And yes .. as mentioned above .. statistically insignificant

                                      But if you want accurate figures and statistics for model numbers ... perhaps you can ask the marketting department of the relevant manufacturer for their figures on breakdowns, and their level of support for warranties

                                      Of course .. for brand new HDD's, short of installing them into a PC, beginning a slipstreamed installation of an OS, and then hauling the PC & UPS off a cliff .... unacceptable. And then having replacements die similarly in exceptionally short lifetimes .. unacceptable.

                                      All standard desktop machines - light use ...
                                      .. no thrashing in a server database environment or HDD destructive testing environments ...
                                      coolcolors
                                      MyCE Resident
                                      Posted on: 10 Mar 11 14:56
                                        Quote:
                                        Originally Posted by debro

                                        But if you want accurate figures and statistics for model numbers ... perhaps you can ask the marketting department of the relevant manufacturer for their figures on breakdowns, and their level of support for warranties
                                        That just misses the point....but oh well..

                                        Quote:
                                        Originally Posted by debro
                                        Of course .. for brand new HDD's, short of installing them into a PC, beginning a slipstreamed installation of an OS, and then hauling the PC & UPS off a cliff .... unacceptable. And then having replacements die similarly in exceptionally short lifetimes .. unacceptable.
                                        That's what RMA is for and then have the same results one would switch to another HDD. One is not tied to one particular HDD or HDD manufacture.
                                        VArase
                                        New Member
                                        Posted on: 10 Mar 11 18:58
                                          Quote:
                                          Originally Posted by debro
                                          Hitachi -> Faster HDD's ...
                                          WD -> Die early HDD's ...

                                          Hitach+WD -> Die early Faster HDD's
                                          Actually I find WD bare drives to be quite reliable ... of course I mostly deal with consumer SATA drives in the 1TB+ sizes. (Their externally enclosed pre-packaged drives suck.)

                                          Curiously, despite having a bunch of WD drives and a single Hitachi, it's the Hitachi which is looking to be on the verge of failure (1TB 7200) ...
                                          RichMan
                                          CD Freaks Expert
                                          Posted on: 11 Mar 11 03:01
                                            Quote:
                                            Originally Posted by coolcolors
                                            Based on????
                                            Based on what I previously posted, which is my past experience. Not sure what kind of answer you are looking for.

                                            What matters to me is my experience. It doesn't matter to me if other people think that WD drives are the best. To each their own. However, I've had better luck with other brands. I would need to see some very impressive reviews before I try and brand that has let me down in the past.

                                            In the late 90's or so my work used mostly WD drives in the systems that we shipped. The failure rate was quite high. If I remember correctly, these drives were in the 8GB range (some probably a little larger).
                                            getit29
                                            MyCE Resident
                                            Posted on: 11 Mar 11 06:03
                                              Quote:
                                              Originally Posted by RichMan
                                              What matters to me is my experience.
                                              I completely agree with that, because what matters the most to me is also my own experience
                                              with any brand of drive.

                                              I know I rag a lot on Seagate drives but that is based just from my own bad experience with them
                                              in the past.

                                              As with anything electrical or mechanical there are going to be good ones and bad ones that come
                                              from the factory that is just the way it is just to bad there is nothing anyone can do about it.

                                              I just wish there was a lemon law on hdd's so after having to have it replaced so many times the
                                              company would have to refund your money for it.
                                              wonderwrench
                                              MyCE Member
                                              Posted on: 11 Mar 11 14:48
                                                Yes it sucks to loose Hitachi to WD even though I'm a WD fan. Less competition is always bad for consumers. I have owned Maxtor (before seagate owned them). Maxtor built solid drives back in the day, WD, Seagate, Samsung and Hitachi drives. I have had two WD drives fail, two Seagate drives fail and one Hitachi drive fail. WD has great product support and both times the RMA process was painless. I received new replacement drives in less than three working days in both cases. IMO WD has the best support. Seagate support sucks balls. I took near forever to receive replacement drives and both replacements we junk from the get go. The Hitachi drive that failed was a 2.5 inch drive that was many years old and was well out of warranty. I'll stick with WD because they support their products better IMO.

                                                As others have said buy the brand of drives that you have had good luck with.

                                                Bill

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