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History 2000: Western Digital Out of Enterprise HDDs

Like Maxtor before

Finally forced to acknowledge IBM’s and Seagate’s superiority, and plagued by disastrous financial results, Western Digital, like Maxtor before it, has abandoned its HDD drive server activities launched in 1994.

The enterprise design center, with 420 employees in Rochester, MN, will cease operations.

We are exiting the enterprise HDD business because our share has been declining in a market that is getting increasingly competitive with fewer suppliers required, yet which demands continued major investments to be a dominant player,” said CEO Mike Massengill in a prepared statement just days after taking up his new position.

In its most recent completed fiscal year, closed last July, this business, which never really took off, accounted for 11% of WD’s revenues.

After a short union with IBM in order to make up for technological lags, major personnel scale-backs, dropping its disk media activities and now giving up high-performance HDDs, WD is doing everything it can to get back on an even footing, even if it’s too early to tell whether it will succeed.

For the desktop unit segment, now the company’s core business, the competition is no less fierce. Note, however, that Compaq recently selected WD’s 10.2GB per-platter 7,200rpm drive, one of the first among desktop fast drives, to integrate in Deskpro commercial and Presario desktop lines.

WD is also counting on its 2 subsidiaries, Connex, which should launch its NAS/SAN products any day now, and SageTree, involved in data warehousing software, in order to give it a much-needed boost.

This article is an abstract of news published on issue 145 on February 2000 from the former paper version of Computer Data Storage Newsletter.