Seagate Technology (NASDAQ: STX) is one of the world's largest manufacturers of hard disk drives. Incorporated in 1978[3] as Shugart Technology, Seagate is currently incorporated in Dublin, Ireland and has its principal executive offices in Scotts Valley, California.
Seagate Technology, Inc. has been the world's leading independent manufacturer of rigid magnetic disks and disk drives for computers since the 1980s. The company pioneered the downsizing of mainframe hard disk drives, making them affordable for personal computers. In the 1990s the company expanded into software and presently is the leading provider of technology and products that enable computers to store, access, and manage information, including disk drives, magnetic disks and heads, tape drives, and software. In 2000 Seagate was transitioning from public to private ownership, due to a complex $2 billion buyout.
Seagate Technology plc (Seagate) designs, manufactures, markets and sells hard disk drives. The Company produces a range of disk drive products addressing enterprise applications, where its products are primarily used in enterprise servers, mainframes and workstations; client compute applications, where its products are used in desktop and notebook computers; and client non-compute applications, where its products are used in a variety of devices, such as digital video recorders (DVRs), and other consumer electronic devices, such as personal data backup systems, portable external storage systems and digital media systems. The Company sells its disk drives primarily to major original equipment manufacturers (OEMs), distributors and retailers. In addition to manufacturing and selling disk drives, the Company provides storage services for small- to medium-sized businesses, including online backup, data protection and recovery solutions.
Seagate offers a range of disk drive products for the enterprise, client compute and client non-compute market applications. It offer more than one product within each product family and differentiate products on the basis of price, performance, form factor, capacity, interface, power consumption efficiency, security features like full disk encryption and other customer integration requirements. Its product offerings include Cheetah SCSI/SAS/Fibre Channel Family; Savvio small computer system interface/ serial attached SCSI (SCSI/SAS); Fibre Channel Family; Barracuda ES serial advanced technology architecture (SATA) Family; Constellation ES SATA Family; Momentus advanced technology attachment (ATA)/SATA Family; Barracuda ATA/SATA Family; Pipeline HD and DB35 SATA Family, and Pipeline Mini SATA Family.
Seagate’s Cheetah 3.5-inch disk drives ship in 10,000 and 15,000 revolutions per minute (RPM) and in storage capacities ranging from 73 gigabytes to 600 gigabytes. Commercial uses for Cheetah disk drives include Internet and e-commerce servers, data mining and data warehousing, mainframes and supercomputers, department/enterprise servers and workstations, transaction processing, professional video and graphics and medical imaging. The Company ships its fourth generation Savvio 2.5-inch enterprise disk drive featuring increased throughput and improved power consumption, targeted at space optimized enterprise storage systems. Its Savvio disk drives ship in 10,000 and 15,000 RPM and in storage capacities ranging from 73 gigabytes to 600 gigabytes. Seagate’s
The Company’s Barracuda ES 3.5-inch disk drives ship in 7,200 RPM and in storage capacities ranging from 250 gigabytes to 2 terabytes. The Barracuda ES addresses the market in enterprise storage using nearline storage systems for capacity-intensive enterprise applications that require space optimization, maximized performance and availability. It has also introduced Barracuda ES drives for the surveillance market with capacities ranging from 250 gigabytes to 1 terabytes. Its Constellation disk drives ship in both 2.5-inch and 3.5-inch and in storage capacities of up to 500 gigabytes to 2 terabytes, respectively, at 7,200 RPM.
Seagate’s Momentus family of disk drives for mobile computing disk drive products ship in 5,400 and 7,200 RPM and in capacities ranging from 80 gigabytes to 640 gigabytes. Momentus disk drives are used in notebooks for business, government, education and consumer applications. Consumer uses for Momentus disk drives also include tablet computers and digital audio applications. Its Barracuda 3.5-inch disk drive delivers storage capacities of up to 2 terabytes at 7,200 RPM and is designed for applications, such as PCs, workstations and personal external storage devices.
The Company sells its 3.5-inch Pipeline HD and DB35 disk drives primarily for use in DVRs. These disk drives are optimized for digital entertainment and range from 160 gigabytes to 1 terabytes. It sells its 2.5-inch, 5,400 RPM Pipeline Mini disk drives, with capacities ranging from 160 gigabytes up to 500 gigabytes, for use in low-profile DVRs, gaming consoles, home entertainment devices and small footprint media PCs. Seagate ships external backup storage solutions under its Free Agent Go and Free Agent Go Flex product lines. Both of these product lines utilize its 3.5-inch and 2.5-inch disk drives, which are available in capacities up to 2 terabytes and 750 gigabytes, respectively.
The Company competes with Western Digital Corporation, Hitachi Global Storage Technologies, Samsung Electronics Co., Ltd., Toshiba Corporation, Micron Technology, Inc., SanDisk Corporation, Intel Corporation and STEC Inc.
In 2000-07-13, Convolve Inc. and the Massachusetts Institute of Technology (MIT) filed a lawsuit against Compaq Computer Corp. and Seagate Technology Inc. in the US District Court Southern District of New York, alleging that the defendants had stolen Convolve's computer disk drive technologies (US patents 4,916,635 and 5,638,267) and had been incorporated into Seagate's products as 'Sound Barrier Technology' (SBT). In 2001-11-06, claim for US patent 6,314,473 was added to the claim, and Convolve asserted amended Seagate's infringement of patent 6,314,473 in 2002-01-25, which claimed Seagate's infringement was willful.
During the course of lawsuit, National Union Fire Insurance Co. of Pittsburgh claimed the insurers have no duty to defend Seagate, but a federal judge in California ruled that NUFICOP must defend the claim.
Although Seagate had tried to suppress evidence from Seagate's opinion counsel's conclusions on attorney-client privilege grounds, Convolve claimed that the evaluation was fair game for discovery. The district court found that Seagate had waived the privilege to all documents within the scope of the waiver as defined in In re Echostar Communs. Corp, and ordered Seagate to turn over all documents exchanged amongst outside counsel relating to the alleged use by Seagate of the Convolve patents. Seagate unsuccessfully tried to stay this decision at the district court level before the Federal Circuit stepped in. However, the Federal Circuit determined that the waiver of attorney-client privilege should not be extended to trial counsel.
In 2008, the Board of Patent Appeals and Interferences of the U.S. Patent and Trademark Office ruled in favor of Convolve Inc. and against Seagate Technology Inc. The Board denied Seagate's motions challenging the patentability of Convolve's claims. Seagate did not appeal the Board's decision. In 2008-08-20, U.S. Patent and Trademark Office (USPTO) concluded U.S. patent 6,314,473 was valid, without change to the originally issued claim scope. Convolve also filed lawsuit against Dell Computer, Western Digital, Hitachi Global Storage Technologies, Inc., and Hitachi Ltd., asserting the '473 and another patent. In 2009-04-01, USPTO concluded five of the original U.S. Patent 4,916,635 ('635) claim were valid, but the patent had expired during reexamination proceedings. The ruling allowed Convolve to claim damages against Seagate prior to the patent's expiration, with trial beginning in January 2010.
As a result of the lawsuit, Seagate stopped supporting automatic acoustic management on hard drives beginning with Seagate Barracuda 7200.7, before rulings of the trial had been decided. Nevertheless, some Barracuda 7200.7 drives included AAM support.In later products such as Seagate Barracuda 7200.12, the quiet seek mode is set at the factory and cannot be adjusted by end users.
For fiscal 1999 ending July 2 Seagate reported revenues of $6.8 billion and net income of $1.17 billion. While revenues were flat over the previous year, the company improved its profitability in spite of price erosion on disk drive products through extensive cost-cutting and restructuring. During the fiscal year Seagate reduced its workforce from 87,000 to 82,000, of which some 65,000 were employed in Seagate's Far East operations. By the end of 1999 the company's workforce had been reduced to about 71,500 people.
The company's software subsidiary had revenues of $293 million and more than 1,700 employees, making it one of the 50 largest software companies in the world. It was organized in two operating groups, the Information Management Group and the Network and Storage Management Group. In May 1999 the Network and Storage Management Group was sold to Veritas Software Corporation in exchange for 41.6 percent of Veritas's outstanding common stock valued at $3.1 billion.
In the latter half of 1999 Seagate decided to repurchase 50 million of its shares, about 25 percent of the stock outstanding. The previous year it had repurchased 48 million shares. Some analysts considered its stock undervalued, and there were rumors that Fujitsu and IBM were interested in acquiring the company. In December Seagate acquired XIOtech Corp, a storage area network (SAN) vendor, for $360 million in stock.
Going Private: 2000
At the end of the first quarter of 2000 Seagate announced a complex financial deal involving Veritas Software and an investor group led by Silver Lake Partners, in which Seagate would become a privately held company. According to published reports, Seagate decided to go private to get away from the scrutiny of Wall Street investors. Under the terms of the deal, Veritas would acquire all of the Veritas Software shares held by Seagate, while the investor group would acquire Seagate's operating businesses for approximately $2 billion in cash in what was described as a management buyout. The investor group included members of Seagate's management team as well as other investors.
As a private company, Seagate would be able to better focus on strengthening its core storage business. Company executives were more comfortable with their new partners' long-term views, as opposed to Wall Street's shorter-term expectations. Seagate planned to continue to implement its advanced manufacturing technologies, seek operational efficiencies, and position the company to take advantage of increased demand for storage-related technologies and products across multiple markets.
Principal Competitors: Western Digital Corporation; Maxtor Corporation; IBM's Storage Systems Division; Fujitsu Limited; Quantum Corporation.
OVERALL
Beta: 1.91
Market Cap (Mil.): $7,393.16
Shares Outstanding (Mil.): 430.09
Annual Dividend: 0.72
Yield (%): 4.19
FINANCIALS
STX.O Industry Sector
P/E (TTM): 10.89 13.45 21.01
EPS (TTM): -28.52 -- --
ROI: 15.76 15.25 16.02
ROE: 29.98 17.15 17.63
Statistics:
Private Company
Incorporated: 1979
Employees: 82,000
Sales: $6.8 billion (1999)
NAIC: 334112 Computer Storage Device Manufacturing; 334413 Semiconductors and Related Device Manufacturing; 511210 Software Publishers
Key Dates:
1979: Seagate Technology Inc. is founded to make hard-disk drives for computers.
1981: Seagate goes public with its initial public offering.
1989: Seagate acquires Control Data's disk-drive subsidiary, Imprimis.
1996: Seagate acquires competitor Conner Peripherals.
1996: Seagate forms new subsidiary, Seagate Software, Inc.
1997-98:Seagate reports a $550 million net loss on declining sales.
1998: Cofounder Alan Shugart resigns under pressure from the company's board of directors.
2000: Seagate goes private in a $20 billion stock swap and management buyout.
Name Age Since Current Position
Stephen Luczo 53 2009 Chairman of the Board, President, Chief Executive Officer
Patrick O'Malley 48 2008 Chief Financial Officer, Executive Vice President
Robert Whitmore 49 2011 Chief Technology Officer, Executive Vice President - Research and Development
David Richarz 50 2011 Interim EVP - Sales, Sales Operations, Product Line Management, Marketing and Retail
Albert Pimentel 55 2011 Executive Vice President - Worldwide Sales and Marketing
William Mosley 44 2011 Executive Vice President - Operations
Kenneth Massaroni 49 2008 Senior Vice President, General Counsel, Corporate Secretary
Terance Cunningham 51 2009 Senior Vice President - i365
Douglas DeHaan 52 2009 Senior Vice President - Operations and Materials
John Grieci 2011 Senior Vice President - Customer Advocacy
David Morton 38 2009 Vice President - Finance, Principal Accounting Officer, Treasurer
Lydia Marshall 61 2009 Lead Independent Director
Michael Cannon 58 2011 Director
John Thompson 61 2000 Independent Director
Edward Zander 64 2009 Independent Director
Gregorio Reyes 70 2004 Independent Director
Frank Biondi 66 2005 Independent Director
Chong Park 62 2006 Independent Director
Address:
920 Disc Drive
Scotts Valley, California 95066
U.S.A.
Seagate Technology, Inc. has been the world's leading independent manufacturer of rigid magnetic disks and disk drives for computers since the 1980s. The company pioneered the downsizing of mainframe hard disk drives, making them affordable for personal computers. In the 1990s the company expanded into software and presently is the leading provider of technology and products that enable computers to store, access, and manage information, including disk drives, magnetic disks and heads, tape drives, and software. In 2000 Seagate was transitioning from public to private ownership, due to a complex $2 billion buyout.
Seagate Technology plc (Seagate) designs, manufactures, markets and sells hard disk drives. The Company produces a range of disk drive products addressing enterprise applications, where its products are primarily used in enterprise servers, mainframes and workstations; client compute applications, where its products are used in desktop and notebook computers; and client non-compute applications, where its products are used in a variety of devices, such as digital video recorders (DVRs), and other consumer electronic devices, such as personal data backup systems, portable external storage systems and digital media systems. The Company sells its disk drives primarily to major original equipment manufacturers (OEMs), distributors and retailers. In addition to manufacturing and selling disk drives, the Company provides storage services for small- to medium-sized businesses, including online backup, data protection and recovery solutions.
Seagate offers a range of disk drive products for the enterprise, client compute and client non-compute market applications. It offer more than one product within each product family and differentiate products on the basis of price, performance, form factor, capacity, interface, power consumption efficiency, security features like full disk encryption and other customer integration requirements. Its product offerings include Cheetah SCSI/SAS/Fibre Channel Family; Savvio small computer system interface/ serial attached SCSI (SCSI/SAS); Fibre Channel Family; Barracuda ES serial advanced technology architecture (SATA) Family; Constellation ES SATA Family; Momentus advanced technology attachment (ATA)/SATA Family; Barracuda ATA/SATA Family; Pipeline HD and DB35 SATA Family, and Pipeline Mini SATA Family.
Seagate’s Cheetah 3.5-inch disk drives ship in 10,000 and 15,000 revolutions per minute (RPM) and in storage capacities ranging from 73 gigabytes to 600 gigabytes. Commercial uses for Cheetah disk drives include Internet and e-commerce servers, data mining and data warehousing, mainframes and supercomputers, department/enterprise servers and workstations, transaction processing, professional video and graphics and medical imaging. The Company ships its fourth generation Savvio 2.5-inch enterprise disk drive featuring increased throughput and improved power consumption, targeted at space optimized enterprise storage systems. Its Savvio disk drives ship in 10,000 and 15,000 RPM and in storage capacities ranging from 73 gigabytes to 600 gigabytes. Seagate’s
The Company’s Barracuda ES 3.5-inch disk drives ship in 7,200 RPM and in storage capacities ranging from 250 gigabytes to 2 terabytes. The Barracuda ES addresses the market in enterprise storage using nearline storage systems for capacity-intensive enterprise applications that require space optimization, maximized performance and availability. It has also introduced Barracuda ES drives for the surveillance market with capacities ranging from 250 gigabytes to 1 terabytes. Its Constellation disk drives ship in both 2.5-inch and 3.5-inch and in storage capacities of up to 500 gigabytes to 2 terabytes, respectively, at 7,200 RPM.
Seagate’s Momentus family of disk drives for mobile computing disk drive products ship in 5,400 and 7,200 RPM and in capacities ranging from 80 gigabytes to 640 gigabytes. Momentus disk drives are used in notebooks for business, government, education and consumer applications. Consumer uses for Momentus disk drives also include tablet computers and digital audio applications. Its Barracuda 3.5-inch disk drive delivers storage capacities of up to 2 terabytes at 7,200 RPM and is designed for applications, such as PCs, workstations and personal external storage devices.
The Company sells its 3.5-inch Pipeline HD and DB35 disk drives primarily for use in DVRs. These disk drives are optimized for digital entertainment and range from 160 gigabytes to 1 terabytes. It sells its 2.5-inch, 5,400 RPM Pipeline Mini disk drives, with capacities ranging from 160 gigabytes up to 500 gigabytes, for use in low-profile DVRs, gaming consoles, home entertainment devices and small footprint media PCs. Seagate ships external backup storage solutions under its Free Agent Go and Free Agent Go Flex product lines. Both of these product lines utilize its 3.5-inch and 2.5-inch disk drives, which are available in capacities up to 2 terabytes and 750 gigabytes, respectively.
The Company competes with Western Digital Corporation, Hitachi Global Storage Technologies, Samsung Electronics Co., Ltd., Toshiba Corporation, Micron Technology, Inc., SanDisk Corporation, Intel Corporation and STEC Inc.
In 2000-07-13, Convolve Inc. and the Massachusetts Institute of Technology (MIT) filed a lawsuit against Compaq Computer Corp. and Seagate Technology Inc. in the US District Court Southern District of New York, alleging that the defendants had stolen Convolve's computer disk drive technologies (US patents 4,916,635 and 5,638,267) and had been incorporated into Seagate's products as 'Sound Barrier Technology' (SBT). In 2001-11-06, claim for US patent 6,314,473 was added to the claim, and Convolve asserted amended Seagate's infringement of patent 6,314,473 in 2002-01-25, which claimed Seagate's infringement was willful.
During the course of lawsuit, National Union Fire Insurance Co. of Pittsburgh claimed the insurers have no duty to defend Seagate, but a federal judge in California ruled that NUFICOP must defend the claim.
Although Seagate had tried to suppress evidence from Seagate's opinion counsel's conclusions on attorney-client privilege grounds, Convolve claimed that the evaluation was fair game for discovery. The district court found that Seagate had waived the privilege to all documents within the scope of the waiver as defined in In re Echostar Communs. Corp, and ordered Seagate to turn over all documents exchanged amongst outside counsel relating to the alleged use by Seagate of the Convolve patents. Seagate unsuccessfully tried to stay this decision at the district court level before the Federal Circuit stepped in. However, the Federal Circuit determined that the waiver of attorney-client privilege should not be extended to trial counsel.
In 2008, the Board of Patent Appeals and Interferences of the U.S. Patent and Trademark Office ruled in favor of Convolve Inc. and against Seagate Technology Inc. The Board denied Seagate's motions challenging the patentability of Convolve's claims. Seagate did not appeal the Board's decision. In 2008-08-20, U.S. Patent and Trademark Office (USPTO) concluded U.S. patent 6,314,473 was valid, without change to the originally issued claim scope. Convolve also filed lawsuit against Dell Computer, Western Digital, Hitachi Global Storage Technologies, Inc., and Hitachi Ltd., asserting the '473 and another patent. In 2009-04-01, USPTO concluded five of the original U.S. Patent 4,916,635 ('635) claim were valid, but the patent had expired during reexamination proceedings. The ruling allowed Convolve to claim damages against Seagate prior to the patent's expiration, with trial beginning in January 2010.
As a result of the lawsuit, Seagate stopped supporting automatic acoustic management on hard drives beginning with Seagate Barracuda 7200.7, before rulings of the trial had been decided. Nevertheless, some Barracuda 7200.7 drives included AAM support.In later products such as Seagate Barracuda 7200.12, the quiet seek mode is set at the factory and cannot be adjusted by end users.
For fiscal 1999 ending July 2 Seagate reported revenues of $6.8 billion and net income of $1.17 billion. While revenues were flat over the previous year, the company improved its profitability in spite of price erosion on disk drive products through extensive cost-cutting and restructuring. During the fiscal year Seagate reduced its workforce from 87,000 to 82,000, of which some 65,000 were employed in Seagate's Far East operations. By the end of 1999 the company's workforce had been reduced to about 71,500 people.
The company's software subsidiary had revenues of $293 million and more than 1,700 employees, making it one of the 50 largest software companies in the world. It was organized in two operating groups, the Information Management Group and the Network and Storage Management Group. In May 1999 the Network and Storage Management Group was sold to Veritas Software Corporation in exchange for 41.6 percent of Veritas's outstanding common stock valued at $3.1 billion.
In the latter half of 1999 Seagate decided to repurchase 50 million of its shares, about 25 percent of the stock outstanding. The previous year it had repurchased 48 million shares. Some analysts considered its stock undervalued, and there were rumors that Fujitsu and IBM were interested in acquiring the company. In December Seagate acquired XIOtech Corp, a storage area network (SAN) vendor, for $360 million in stock.
Going Private: 2000
At the end of the first quarter of 2000 Seagate announced a complex financial deal involving Veritas Software and an investor group led by Silver Lake Partners, in which Seagate would become a privately held company. According to published reports, Seagate decided to go private to get away from the scrutiny of Wall Street investors. Under the terms of the deal, Veritas would acquire all of the Veritas Software shares held by Seagate, while the investor group would acquire Seagate's operating businesses for approximately $2 billion in cash in what was described as a management buyout. The investor group included members of Seagate's management team as well as other investors.
As a private company, Seagate would be able to better focus on strengthening its core storage business. Company executives were more comfortable with their new partners' long-term views, as opposed to Wall Street's shorter-term expectations. Seagate planned to continue to implement its advanced manufacturing technologies, seek operational efficiencies, and position the company to take advantage of increased demand for storage-related technologies and products across multiple markets.
Principal Competitors: Western Digital Corporation; Maxtor Corporation; IBM's Storage Systems Division; Fujitsu Limited; Quantum Corporation.
OVERALL
Beta: 1.91
Market Cap (Mil.): $7,393.16
Shares Outstanding (Mil.): 430.09
Annual Dividend: 0.72
Yield (%): 4.19
FINANCIALS
STX.O Industry Sector
P/E (TTM): 10.89 13.45 21.01
EPS (TTM): -28.52 -- --
ROI: 15.76 15.25 16.02
ROE: 29.98 17.15 17.63
Statistics:
Private Company
Incorporated: 1979
Employees: 82,000
Sales: $6.8 billion (1999)
NAIC: 334112 Computer Storage Device Manufacturing; 334413 Semiconductors and Related Device Manufacturing; 511210 Software Publishers
Key Dates:
1979: Seagate Technology Inc. is founded to make hard-disk drives for computers.
1981: Seagate goes public with its initial public offering.
1989: Seagate acquires Control Data's disk-drive subsidiary, Imprimis.
1996: Seagate acquires competitor Conner Peripherals.
1996: Seagate forms new subsidiary, Seagate Software, Inc.
1997-98:Seagate reports a $550 million net loss on declining sales.
1998: Cofounder Alan Shugart resigns under pressure from the company's board of directors.
2000: Seagate goes private in a $20 billion stock swap and management buyout.
Name Age Since Current Position
Stephen Luczo 53 2009 Chairman of the Board, President, Chief Executive Officer
Patrick O'Malley 48 2008 Chief Financial Officer, Executive Vice President
Robert Whitmore 49 2011 Chief Technology Officer, Executive Vice President - Research and Development
David Richarz 50 2011 Interim EVP - Sales, Sales Operations, Product Line Management, Marketing and Retail
Albert Pimentel 55 2011 Executive Vice President - Worldwide Sales and Marketing
William Mosley 44 2011 Executive Vice President - Operations
Kenneth Massaroni 49 2008 Senior Vice President, General Counsel, Corporate Secretary
Terance Cunningham 51 2009 Senior Vice President - i365
Douglas DeHaan 52 2009 Senior Vice President - Operations and Materials
John Grieci 2011 Senior Vice President - Customer Advocacy
David Morton 38 2009 Vice President - Finance, Principal Accounting Officer, Treasurer
Lydia Marshall 61 2009 Lead Independent Director
Michael Cannon 58 2011 Director
John Thompson 61 2000 Independent Director
Edward Zander 64 2009 Independent Director
Gregorio Reyes 70 2004 Independent Director
Frank Biondi 66 2005 Independent Director
Chong Park 62 2006 Independent Director
Address:
920 Disc Drive
Scotts Valley, California 95066
U.S.A.