Feeds

So when did the knives come out at Seagate?

To lose one C-level exec may be regarded as a misfortune...

Build a business case: developing custom apps

Sentiment turned

Sentiment must have turned against Watkins continuing as CEO. Board members may have been reminded that competitor Western Digital's performance stock-wise and marketwise had been better than Seagate's. Watkins has admitted that Seagate misjudged the need for notebook drive capacity increases, giving WD the opportunity to make up ground and surpass Seagate in notebook drive technology, which it duly did.

The board members may have been reminded that WD was far more effective in selling external drives, whereas Seagate has two distinct external drive brands and has not combined its own and the acquired Maxtor external drive operations. It was being comprehensively out-marketed and outsold here. Financially WD had performed better too, both in share price and market capitalisation terms.

In fact, WD with its Velociraptor 10K drive has the sexiest hard drive on the market.

The board may also have been cognisant that Watkins had earlier admitted he didn't expect the recession in August and September and, clearly, December took him by surprise too. It may well have collectively felt that its CEO should have steered the Seagate ship better, anticipating the rise of notebook drive demand and foreseeing the recession and its course with more alacrity. Should he be trusted to do better in the future?

Seagate spokesperson Forrest Monroy said: "There was no conflict or falling out between Bill and the board or senior management team; it was a situation in which the board made the determination that Steve was the right person to lead the company right now."

So, if Bill Watkins was now felt to be the wrong leader for Seagate, who was the right one?

At this point we can rule ex-COO David Wickersham out of the story. He played no part in these board ruminations as he'd resigned a few days before. Monroy said: "Dave Wickersham's resignation was an event separate from Watkins. Dave resigned last week, and details of his departure were finalized within a timeframe that coincided with communicating that on Monday." Robert Whitmore, the chief technology officer, was appointed to replace Wickersham with immediate effect on Monday.

What a steep learning curve the man faces. He'll know something about the innovation side of Wickersham's job, but the rest will only amount to second-hand and worse knowledge.

The reason for Wickersham's resignation is not known. However, it must have added to the level of stress within Seagate's executive and board ranks. The COO was going and now a CEO change was being contemplated.

Back to speculation: there are two possible options we could imagine here. First, another CEO candidate was identified and asked to be interim CEO and cut operating Seagate's cloth as the board now wished, but said no. Secondly, the board had already decided that chairman Stephen Luczo, a previous CEO, was the best interim choice.

So the board, Luczo, or Lydia Marshall, the lead independent director and chair of the nominating and corporate governance committee, told Watkins that they thought he should no longer continue as CEO. He didn't resign and they didn't fire him from the company, as the statement issued on Monday made clear: "Mr. Watkins will be advising Mr. Luczo in order to ensure a smooth transition. In addition, Messrs. Luczo and Watkins will confer over the next week to determine what role, if any, Mr. Watkins will have at the Company going forward."

This picture of Seagate's board considerations and communications with Watkins is speculative and founded on a belief that some set of events and considerations like this must surely have happened for the actual events to have taken place - but it could well be wrong.

Monroy warns: "I can't speculate on the sequence or content of what the board discussed as it related to our financial results or a management change, and would discourage you or other reporters from committing such speculation to print, since that would be a lot of guesswork that readers would mistakenly equate as fact." Consider yourself warned.

Boost IT visibility and business value

Next page: Immediate future

More from The Register

next story
Sysadmin Day 2014: Quick, there's still time to get the beers in
He walked over the broken glass, killed the thugs... and er... reconnected the cables*
Auntie remains MYSTIFIED by that weekend BBC iPlayer and website outage
Still doing 'forensics' on the caching layer – Beeb digi wonk
VVOL update: Are any vendors NOT leaping into bed with VMware?
It's not yet been released but everyone thinks it's the dog's danglies
BlackBerry: Toss the server, mate... BES is in the CLOUD now
BlackBerry Enterprise Services takes aim at SMEs - but there's a catch
SHOCK and AWS: The fall of Amazon's deflationary cloud
Just as Jeff Bezos did to books and CDs, Amazon's rivals are now doing to it
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Build a business case: developing custom apps
Learn how to maximize the value of custom applications by accelerating and simplifying their development.