A drive dies . . . when will another one come?


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Let me back up a minute for those who haven’t paid attention to the news of the last few months. Truth be told, you may have missed the back story on what happened in Thailand. In the tech sector reporting I’ve been reading, there was hardly a mention of a massive monsoon, triggered by the landfall of Tropical Storm Nock-ten, that displaced 13.6 million people in Thailand. There was no mention that the storm and floods had killed 815 people, that seven major industrial estates were swamped in 10 feet of water, or that the storm and flooding constituted the fourth most costly disaster in recorded history (surpassed only by Japan’s earthquake/tsunami/nuclear disaster last year, the 1995 Kobe earthquake and Hurricane Katrina).

The headline in our tech industry press is that we’re all about to be majorly inconvenienced -- end users by huge price increases on those SATA disks we buy from Best Buy, CompUSA, Fry’s and so on; while storage array vendors and PC makers will have to deal with drive supply shortages.

Yet, quizzically, as I sit at my desk in my Florida office, staring at one array with a red light glowing on one bank of drive bays and at another where the drive light is completely dark (different representations of dead drives by different array vendors), I have been reviewing statements in the financial reports of the big two drive makers.

By November 28, 2011 (a month after its dismal preview of the coming year), Seagate reported that

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it would ship 43 million drives, which is only approximately 7 million below its high-end estimate. On January 4, 2012, the company reported it had shipped more disk drives in December than it had expected and would be reporting revenue in excess of its earlier guidance.

For its part, Western Digital reported on October 17 that the floods would have “a significant impact on drive shipments and its ability to meet customer demand.” Magically, the hitch was resolved “significantly ahead of expectations,” according to company spokespersons during the earnings call on January 23. The firm shipped approximately 29 million drives, which seems like a lot.

Both companies also reported earnings well in excess of October estimates. Western Digital earned $1.51 per share (well beyond the projected $0.65 per share) while Seagate earned $1.32 per share (topping its $1.08 per share estimate).

This was first published in April 2012

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