HGST HAS DRAWN a line in the sand recently with a series of announcements that will see the company focused on its helium-filled hard drives, as well as flash arrays.
Formerly the hard drive business of Hitachi, HGST is now part of Western Digital and sits alongside the more well-known WD brand, but now seems to be coming back to the fore in its own right.
Presenting the new HGST product lines in San Francisco, president Mike Cordano said that it was "no longer your father's hard drive company". We caught up with him at the event to talk about the changes in the marketplace that have led the company to where it is today. He still very much sees the company within its own right.
"I don't think we think so much in terms of where we sit within Western Digital, but more on where we sit in the broader competitive environment and what we need to do to hook our wagon to the trends we talk about. Speaking candidly, we see ourselves, both at HGST and at WDC as a whole, as a growth company. The ecosystem around us is going through these tectonic changes, and for us its vital that we either take a passive view of that, or that we somehow get more active in trying to engage earlier on and try and influence the outcomes a little bit."
The announcement marks the end of an era, as the company announces the last in its line of "air drives" following the successful pilot launch of the helium-filled drives, last year.
"We still think there's a future for our other air products, but in capacity enterprise, this is the last one. That doesn't preclude us from applying helium technology to our other lines, but for our most strategically important line, we think the right way to go is all-helium going forward," he said.
The move is a bold statement on the success of the pilot product. Cordano enthuses, "The feedback is interesting. There were two main objections in the field. The first was on whether it could really deliver the value proposition that we articulated, in terms of power and cooling and density and all the other elements that we spell out.
"That was one of them, a 'show me' perspective. Which is normal. Then there was manufacturability, because we'd never ramped it up that high. The original 6TB model, we had very modest expectations for, because it was released mainly to validate the value proposition and manufacturability and ready the product for prime time.
"As it is, we probably shipped two times more than we expected on that first generation. It wasn't the highest volume product in our portfolio, and it wasn't intended to be, but we still wound up selling more than we thought, and in doing so, all the promises that we were making seem to be realised so we have a lot of interest in the new generation of product already."
But there is more to the company's change in outlook than helium. The relationship with the customer has had to evolve. To compete with flash storage, Cordano says, you have to think like flash storage providers.
"The thing was around changing our conversation with the market - after all, it's pretty well wired and formulaic - 'you're going to up the capacity and here's the new price point, price per gigabyte and so on'. We went in and said 'No, we want you to calculate the value proposition differently, because there are other costs that you have to consider, and when you do your total cost of ownership (TCO) analysis, you're going to see the values there are very different'," he noted.
"That takes a little time and more 'show me' as it takes a while for customers to be convinced of a change to the way they've always done things. Frankly, we had to change our own go-to-market messaging because it's a shift in posture - a change in our sell-cycle, a slower adoption rate, a change in replacement technology, and all those things required a shift internally as well, but we're happy with the results, we've burned the boats and are happy to show our commitment to that. We're very confident about it, it's an amazing platform that we're going to leverage to the full extent."
One of the major challenges in changing the perception of 'your father's hard drive company' is that many of the decision makers are now set in their ways, approaching retirement, and don't want to hear about change. Cordano agrees.
"Sure, but more than that, they're all feeling the same market pressures and having to adapt to the market shift. There are people that will make that an opportunity and others that will get crushed by it, so what we see is a varied amount of acceptance, but they're all evolving themselves. Some are more successful than others, but in all cases there's a broad desire to talk to us about these different levels of value because of the way they're driving their own business," he explained.
Despite all this talk of flash technology, HGST remains committed to spindle drives, and believes that even if the market flatlines, it's not a bad thing.
"I think you have to look at rate of growth. Rate of growth is going to be faster in newer areas like flash, but we see a very long runway for our hard drive business. Is it going to grow 10 percent a year on a topline? No. But it can still have modest growth and even if it's flat, or slightly down, it's still a very big and very profitable market. We know that the broad market is going to be flattish. There'll be more enterprise hard drive sector growing, and other areas shrinking a little bit, but if you want to take the top line out, you have to grow some of the other things, and that's what we're starting to do - put more of our time, attention and investment into other areas," he said.
The other major adjustment that has come with the times is the fact that so much hardware is now driven by software definition. Cordano is adamant that while the software side is a holistic part of the business, enterprises should be more reluctant to go too far.
"We laugh when we hear that we're a hardware company. People don't realise there's over a million lines of code in that drive - that's what the firmware is. What we're starting to do now is add software to that, and along with the speed of the PCI-e interface that makes a much bigger value proposition," he explained.
"The truth is, even the biggest evangelists, your hyperscale guys, are starting to realise that they need some underlying features in the hardware to make the firmware do all the things that it promises, so where the pendulum had swung one way, with software being used to hide the limitations of the hardware, we're now all realising that it isn't that simple. Our view is you've got to pick your spot to deploy software solutions. You don't want to overdo it, because you'll create a burden that is just too much."
Since 2008, HGST has had a close working relationship with Intel as architects of many of the chip components for its drives. Cordano has a very positive view of the pairing.
"A joint development or joint arrangement between any two large companies can always be a challenge," he explained.
"It took us a while to get it operating well to the mutual comfort of both companies, but we're very happy with the product outcome, and we truly do joint development of those products with the Intel engineers, and frankly we've been able to deliver very competitive drives to the market which makes it a very productive commercial partnership too, so as partners go, I really couldn't ask for much more. We have the right kind of dialogue, we're very open and dynamic, we both understand what it takes to be successful and both sides have continuously demonstrated that commitment."
The storage industry is at the beating heart of the burgeoning industry of big data. With so much information going in and out, much of it machine generated and unquantifiable to the humans who don't directly interact with it, storage has become essential to analytics and the services that users have come to expect, from wearables to interactive TV. Cordano is proud of the part that HGST plays in this growth area.
"The recommendation engine in Linkedin? The feature where it suggests people you may know and who you should know, is an HGST flash layer. Really, we see a lot in the area of social and that's really the first area where big data has come to the forefront. Whether it's being used to drive users or to push ads, or whatever it is, we certainly see that happening in a very big way," he said.
"The other area is the geographic apps that are starting to come out, whether that's referring you to where your friends are or products and services nearby, that's all enabled through a big data analytics approach. It's pretty tremendous stuff. A lot of compute power is enabling those things at a very high end, but now that's up and running, the challenge for big data is to use the machines to start longtailing data into longer term trends."
In a time when everyone is looking over their digital shoulder, the burden falls to storage manufacturers to contribute to the safety of this big data. "We're certainly seeing more interest in the security aspects in recent years, so what we want to do, first of all is to shift people into utilising the capabilities of our security features that are already there, and we're going to have to continue to add to it, but quite frankly, we're very sensitive to it," he noted.
The difficulty comes when people want security, encryption and yet complain about speed and latency issues.
"Of course, there's always trade-offs, and so these things don't always move at the same pace. You're absolutely right, things don't always move in a well-organised way. Different people have different priorities depending on their company and their infrastructure. We're always trying to sense that and we're constantly deliberating what the next highest priority thing is to spend our R&D dollar on," he added.
In summing up, Cordano gave us a clear picture of exactly what he sees as HGST's place in the market.
"We see ourselves as being a provider, modular to the market and that's the trend of the future. The future is like a layer cake. Some people only like to bite into the bottom layer, some people want all the layers and the icing. We plan to architect our solutions like that. That really allows us to have a really accessible approach to the market. We want to have capable solutions, but at the same time we believe we need to be a scale player to have the right economics as time goes on," he explained.
It's pretty clear talking to Cordano that the die has been cast for the future, but it has been done in a way that reflects the turbulent times in the market, and the changing needs of customers. Big data and social media have given HGST an opportunity to re-examine itself and present a new face for a brave new world. Whether the gamble pays off will play out over the coming months and years.
For more on big data, visit the Intel IT Center. µ
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