Seagate to acquire OCZ Technology?

Dee

I just posted the article Seagate to acquire OCZ Technology?.

Read the full article here: http://www.myce.com/news/seagate-to-...hnology-62539/

Feel free to add your comments below.

Please note that the reactions from the complete site will be synched below.

alan1476

Wow, what a surprise, I for one didnt think Seagate was that interested in SSDs. But how wrong I was. Great article Wendy.

CharmedonWB

NO they did not just say the quality assurance from Seagate--is that supposed to be a joke?

alan1476

May I ask what you are implying or referring to?

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Kenshin

Alvin Toffler once said about the responses of the monopolies of certain industries when new and better technologies threaten their business. Most of them try one of the two things: kill or buy, or both. That's what the riders of horses did when cars first appeared. That was also what Bell and AT&T faced when it was clear telephones were going to replace most markets of all preceding technologies to transmit messages over long distance. Mobile - cellular or not - companies servicing 3G-based telecommunication have tried to kill Whatsapp and Kakao Talk. But they also tried to develop their own platforms, or buy existing platforms, or offered something else to counter free messengers: VoLTE (voice over LTE), shared 'family' data plans, reducing or abolishing fee for sending SMS and MMS messages, etc.

The HDD industry has long denied and ridiculed at the threat of SSD. That was not only arrogant but deceiving. How could the CEO of Seagate and Western Digital be more ignorant and less insightful than the owner and reviewers of Anandtech.com? The average intelligence and intellect of major conglomerates and large businesses may not be as good as those of Stephen Hawking and Benjamin Franklin, but it cannot be that Lee Gunhee of Samsung sees his future very clearly and invests smartly whereas the CEO's of Seagate and Western Digital, the dedicated HDD makers, and IBM and Hitachi, largest conglomerates themselves fail to do so entirely because the former is a genius and the rest idiots. The data and business intelligence reports pointing out the comign death of HDD have been available at least since around 2000.

They just didn't say it too publicly because they cannot transform an entire factory into a semiconductor fabrication plant overnight. Their most and best supporters and loyal customers were server administrators and power users, but it was they that first tried DRAM-based and SLC NAND-based SSD's, years before end user consumers of Apple iPad and users of home-grown PC sets started using SSD-only computers. Some were PCI cards rather than SATA/PATA drives, so the term SSD is somewhat incomplete.

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CharmedonWB

I am referring to their quality assurance which is practically nonexistant. Explain to me quality assurance when the company constructs an external drive that reaches temperatures in excess of 60C.

DukeNukem

Wow, you really like to type. Time to get out of the basement and find a girl, mate. I fell asleep three times reading that novel. LOL. Just kidding, Kenshin, but I do think you could have made your point in fewer words.

What's wrong with 60°C? You can use the SSD as storage, you can cook an egg on it, AND heat the room it's in when it's the middle of January. You need to let up on Seagate, man. They're providing us with multi-functional hardware at only a slightly inflated price. God bless Seagate. God bless big corporations. </sarcasm>

alan1476

If that has been your experience then you might have to make some changes, see what other SSDs temps are in your setup. But I have many OCZ SSDs and they run at very comfortable temps and I am very happy with them, OCZ is the leader in cutting edge technology, maybe you just aren't ready for them.

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DukeNukem

I'm going to get one before the end of the year, but it'll be an Intel SSD. Just my personal preference. I'm sure OCZ has good drives, too, but Intel has a great rep for reliability.

alan1476

Hi kenny, that is a very insightful post, Its great to have you back here posting on a regular basis.

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alan1476

Very true, Intel has great SSDs, but I cant afford to spend over 1,000USD for 600gb SSD, when I can buy a 512gb from Crucial for 399.99. Intel has to come to terms with the fact that although their SSDs may be very good, they are not worth the premium placed on them. This is just my personal opinion though, others may very likely spend double for the Intel name brand, not me.

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alan1476

Are you referring to Seagate or OCZ? I dont buy external drives so I cant really give you an opinion but they have both been in the business a very long tie and both are very successful, they must be doing something right. LOL.

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Kenshin

This is a forum for SSD. If you want to give advice for dating girls, go to the Living Room forum instead.

If you have nothing much to contribute, first buy some and post your benchmarks.

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DukeNukem

Actually, this is the news section of MYCE. The forums are around here somewhere, though. At any rate, I didn't mean to offend you. Wait, that doesn't sound like me. LOL. It's a joke, man. Lighten up. I did say that I was just kidding.

When I get my SSD I will post my benchmarks. They will be phenomenal benchmarks. They will be the mother of all benchmarks. They will ... ah, screw it.

Kenshin

Intel was not the pioneer as some mistaken reviewers say on some less fortunate websites. It was Samsung, Indilinx, Mtron, and a few others. The flash technology was first developed by Toshiba and Intel.

Since Intel likes to sell their high-end desktop CPU products at over US$1,000 and low-end (budget or value or whatever you like to call) processors at under US$50, they have tried to do the same thing regarding SSD's.

I bought some 32GB Mtron SSL NAND-based SSD's at a liltte over US$100 per unit a few years ago. Some months, or one or two years later, Intel introduced SLC SSD lines along with MLC SSD lines. Unlike Mtron and Samsung, Intel was selling SLC drives at like five times the prices of MLC drives. Samsung Electronics also had both SLC drives and MLC drives, but Samsung's price differences were not over 100%, and closer to 50%. OCZ followed Intel's pattern. That's why almost every SSD review in the West seemed to make readers believe there are only MLC-based SSD's and SLC's too expensive to use in consumer drives. Lots of people I have known since the late 1990s have used SLC drives since around 2005~2007 when a typical SSD capacity was between 16GB and 128GB, and it was only SLC for many of them.

Unlike the CPU business, Intel cannot lead the other manufacturers to follow their pricing strategies. Intel's NAND marketshare has rapidly fallen, to a point so low that it had to create a venture with Micron: the IMFT. Samsung sold their HDD business to Seagate. Seagate bought OCZ who bought Indilinx who either bought or stole technologies from Samsung. Since Seagate now wants to market SSD drives to compete more directly against Samsung, those former Samsung HDD engineers and Indilinx engineers at Seagate are going to worry more about their identities and loyalty. Some of the former Samsung HDD business unit remained at Samsung. Those moving to Seagate were offered much higher salaries, but they are now saying average Samsung employees receive more than average Apple employees. Here's another article.

http://www.fudzilla.com/home/item/28...cz-acquisition

Just to put the larger picture in perspective, Indilinx was almost for free and Samsung Electronics is expected to have US$30 billion annual profits. Its largest customer Apple has more than US$100 billion in cash.

SSD Shipment Forecast - iSuppli

http://www.isuppli.com/Abstract/P236...0612121921.pdf

The three largest SSD makers are Intel (1), Samsung (2), and Toshiba (3), but it is possible Samsung actually ships more units as some of the OEM shipments may not be correctly reflected in statistics of iSuppli.

The four largest NAND flash makers are Samsung (1), Toshiba (2), Micron (3), and Hynix (4) - now of SK that also has SK Telecom.

The four largest mobile DRAM makers are Samsung (71%), Hynix (15%), Elpida (9%), and Micron (4%).

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alan1476

Excellent stuff Kenny, I wish that post would have been longer. I am serious and I thank you for all that information, I knew that Micron made an offer of offset the offer that Seagate made for OCZ but it was not in the ball park and Seagate won out. Indilinx was the key, OCZ was smart. It knew that with Sandforce (LSI) it would never reach its goals. Now it has become the bleeding edge innovator in SSD Consumer drives, I would have never believed that I could could buy a 256gb Vertex 4 for 199.99USD like I can today.

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Bunny

OCZ also own PLX Technologies.
That's right, the company that makes those very expensive PCIe lane switches on high end motherboards.

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alan1476

Hi Bunny, they make alot of things that most are not aware of. But you are correct, they do make or design the PCI lane switches.

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Dee

I don't think we should be jumping the gun just yet. As it stands at the moment, Seagate has not actually acquired OCZ, and OCZ are still an independent company, and neither Seagate or OCZ has confirmed.
Until they do, this is still speculation.
That's why I put the "question mark" in the article title.

Personally. I would like to know what you all think will be the effect of Seagate taking over OCZ, should this acquisition go ahead.

What will it bring to the SSD industry?
Will it be good for OCZ?
Will it be good for Seagate?
The most important question. Will it be good for consumers?

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alan1476

You are very right, things like this happen all the time in big business, words turn into rumors and rumors turn into whatever the reader interputs the information to be. Until a deal is done its just speculation. Sometimes these deals take months or even years to complete but others get done in a day. Somewhat like a " Take it or leave it approach".
Personally I would not like to see Seagate complete this deal, they are an 11 Billion dollar company and will continue to gobble up the smaller and more innovative brand names. Competition is a good thing for the consumer. I want it to stay that way.

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vroom

I wont be very happy if that happens, Seagate/WD and Intel can spend a lot of money on R&D so the way i see things we will reach a point that we will be stuck with only two or three major companies, and thats never good).

For OCZ it will probably be a good thing, more money for R&D, also a good thing for Seagate, the will be entering an unknown territoty with the one of the best names on the SSD world.

Again i dont believe that it will be good for consumers, and if that happens we can all see whats the next company that will want to jump to the SSD wagon.

But time will prove if I am wrong or right, but i do hope that I am wrong.

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Kenshin

I've recently read a lot of news articles about acquisitions and mergers. Intel and Microsoft especially spent a lot to buy a variety of tech businesses, but Google also bought Motorola Mobility and AT&T was stopped by FCC from buying T-Mobile USA. Verizon Wireless and Verizon Communications have tried to buy more spectrums for 3G (including LTE). Once Micron tried to buy Hynix. It was politically unthinkable for Samsung to buy Hynix, the merged company between Hyundai's and LG's semiconductor businesses. It ultimately went to SK as SK made sizable profits in the recent years in both petroleum and smartphone - the telecom side. Even relatively young companies like Facebook are in a hurry to buy app developers. Chinese Tencent invested about 70 million dollars in Kakao Talk when Tencent itself is just about 16 months into the mobile messenger app business.

Seagate will probably spend many times more than what OCZ earned in the recent quarters. Seagate cannot itself make NAND, but a few billions into the marketing of OCZ-developed SSD's will vastly restructure both the retail and OEM markets. End users buyding from newegg.com may not be aware how weak and limited OCZ is in production capacity and marketing, but that's why Intel and Samsung have far larger market share.

So I believe this kind of development is inevitable. OCZ could have thrived in a niche market as a respected brand, but needs more investment and better organized marketing. As for Seagate, one of the graphs on that iSuppli PDF implies it will still be able to sell more HDD's in the coming years at least until 2015, not less, but they know SSD is threatening some of their most profitable markets. On that graph, they are predicting the number of SSD units sold in 2005 will nearly equal that of HDD units sold several years ago. The proliferation of movies on DVD (and later Blu-ray, too), Bit Torrent, dedicated fiber- and coaxial-based household internet lines all helped to create a vast new market for HDD makers in the early 2000s, especially in the US where copyrights laws are stricter but hundreds of times more contents are generated and distributed than most other places. At CDFreaks, we were talking about the theoretical benefits of SSD in the application of Bit Torrent around 2005 because very few had any SSD and it was expensive to download movies to SSD then. Nobody now wants to have Microdrives either inside or outside of iPads. Having one inside a MacBook even will make one look awkward. The relevant question may not be whether the merge between Seagate and OCZ will do good to the industry and consumers in general, but what the other main HDD manufacturer, Western Digital, hit hardest due to the Thailand flood in early 2011, will do in response. It has less cash in reserve than Seagate partly because it spent 4.1 billion to absorb Hitachi's HDD business in 2010. Seagate's more profitable reporting 37% gross margin for JAN-MAR 2012..

More source:

http://www.cbsnews.com/8301-505245_1...umps-on-sales/

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ChristineBCW

I just wish I could find out why SSD makers have so many brand-layers - Agility, Vertex, etc. Slower NANDs? Faster? Different controllers? All of the above? How many more factors?

There's a thread about being fed up with Firefox (and Chrome) for their waterfall mentality of updates, but this is nothing like product-branding in SSDs.

Who do these people think they are? Optical-Disk Blank makers?!!

Kenshin

I think the biggest reason is profits though Intel and others like to mention 'enterprise' and 'value' marget segments, and OCZ and Intel have sold faster and more reliable SLC SSDs at several times higher prices than consumer products. Intel has been very good at that kind of marketing since at least the era of XT and 286.

Seagate probably doesn't like the fact some of the cheapest OCZ SSD's are faster than some of the most expensive Seagate HDD's. OCZ didn't need to limit the speeds of their low-end SSD's to prevent cannibalization.

Value often is not as scalable and predictable as or in proportion to cost. Equipment makers such as Alcatel-Lucent, Ericsson, Huawei, ZTE, Nokia Siemens Networks are far less profitable than Apple and Samsung. None of the three largest US mobile telecommunication service providers has made any real money from selling all those iPhones. Each of them actually lost billions of dollars and continue to lose, but Apple gained more than 100 billion mostly from selling iPhones to those telcos. Each of the two largest South Korean telcos by comparison has made something like two billion annual profits from selling iPhones. It is not because Alcatel and NSN make such poor products or they are bad at management. Not only Apple and Verizon Wireless, China Mobile, Telefónica, América Móvil, Vodafone, Deutsche Telekom, NTT, they all depend on them.

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alan1476

I used to be a Currency Trader on the New York Stock Exchange and in that short time on the trading floor I absorbed alot of information and learned alot about mergers and acquisitions. So even though I am not doing that anymore I called some friends and asked for their advice. And I quote " Analysts said an OCZ acquisition would boost Seagate's margins and help it establish a firmer foothold in the lucrative enterprise segment, where SSDs are gaining popularity" That Seagate has a special interest in OCZ isn't surprising either, the SSDs from OCZ invariously generate raving reviews. With SSDs, much of the performance difference comes from the controller and the type of nand used. Many of the forums on the internet review these drives including ours. Perhaps I am bias but our reviewers are extremely knowlegeable and with the new Indilinx controller and a newer one in the works, Seagate would have a heavy footprint in the Enterprise market. This might not take place today but in my humble opinion it does take place and sooner rather than later.

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