Seagate Technology | SKYY
Seagate Technology is a
US data storage company and currently the second largest Hard Disk Drive (HDD)
maker in the world. Seagate offers storage solutions for both consumers and
From the largest data
centre used by global enterprise, to the personal user, Seagate’s mission is to
ensure every customer can access, store and transfer data quickly and reliably.
The company leads the
industry in driving data storage technology toward a lower cost per terabyte,
through hard drive optimisation and greater capacity. Whether for personal use,
creative and design computing, online gaming, or large-scale surveillance
systems and hyperscale environments, Seagate drives are opening up new data
management opportunities across a wide range of markets .
Whether it be a large
data centre used by global organisations or a personal user, Seagate’s mission
is to ensure every customer can access, store and transfer data quickly and
Cloud Computing and Competition
Seagate is seen as a leading
indicator of Cloud spending and capital expenditure growth, and its clients
include all of the largest Cloud infrastructure providers (IaaS), including
Amazon, Google, Apple and Facebook.
Unlike Seagate’s biggest
rival Western Digital who aggressively expanded its flash drives and memory
business by acquiring SanDisk in 2016, Seagate focused on selling high-capacity
HDDs to data centre customers to meet the rising demands of cloud-based
services. Many of these customers tend to prefer HDDs to SSDs (solid state
drive) because they offer much more storage per dollar .
To counter competition
from SSDs in consumer products, Seagate has moved away from smaller HDDs
(capacities of 1TB or less), and instead is focused on selling high-capacity
drives for desktops, workstations, and data centres .
During the 2nd
quarter of 2019, Seagate generated 39% of its sales from the enterprise market,
32% from the non-PC consumer electronics market, and 20% from PCs .
As the need for both
hard disk and cloud storage dramatically increase, Seagate will benefit
significantly. The growing demand for various gear used for cloud computing
will help drive revenues.
company’s latest 14-terabyte hard-drives will likely also spur demand due to their
large storage capacity. Seagate benefits from accelerating data storage growth
as enterprises adopt new data technologies. These new hard-drives enhance
Seagate’s enterprise and specialty drive portfolio, and consist of IronWolf®
and IronWolf® Pro for network attached storage (NAS) applications, the
BarraCuda® Pro desktop drive, surveillance-optimised SkyHawk™, and Exos™ X14
for hyperscale data centers. Seagate’s portfolio of products enables customers
to consume, manage and utilise
digital data more effectively and efficiently, helping to establish new
benchmarks in speed and capacity .
Seagate has focused on
smaller acquisitions that cost less than $1 billion over the past five years,
including storage systems company Xyratex and Dot Hill Systems – a software and
hardware storage systems supplier .
Seagate should be able
to keep selling bigger HDDs at lower prices than SSDs to enterprise customers,
which should keep revenue stable while enabling steady returns for
shareholders. It is safe to say that over the next five years, Seagate will
keep shipping traditional HDDs with higher capacities for cloud customers while
repurchasing its shares and raising its dividend.
Find out more about the HAN-GINS Cloud Technology UCITS ETF (SKYY).
As of 12th August 2019, the HAN-GINS Cloud Technology UCITS ETF (SKYY) held 2.25% of it's weight in Seagate Technology.
Read our SKYY Whitepaper "Ahead in the Clouds" here.
Article Date: 13th August 2019.