Feeds

Mixed fortunes for Hitachi disk division

The bitter platter of HGST

HP ProLiant Gen8: Integrated lifecycle automation

A profitable 2008 for Hitachi has been followed by a miserable 2009, with two loss-making quarters and a possible fall behind in the areal density stakes.

In April last year, and after much high-level debate within Hitachi, it was decided that Hitachi GST would remain as part of Hitachi, not be sold off in whole or part, and have its fortunes rebuilt by its own internal efforts. HGST was formed in 2003 when Hitachi absorbed hard disk drive (HDD) manufacturing facilities from IBM. There were prolonged difficulties in realising a profit from the combined venture, leading up to discussions with a venture capital fund, Silver Lake Partners, for a partial sell-off in return for a capital injection. After a couple of quarters of profit in the second half of 2007, Hitachi backed out of this and decided to go it alone with Hiroaki Nakanishi as its chairman and CEO.

What followed was its reward: four quarters of profit in 2008 (see chart below) accompanied by bullish marketing statements about competing with industry leaders, including number 2 Western Digital and number 1 Seagate, both also profitable. It also made noises about areal density expertise - the industry is in a never-ending race to increase areal density and so both increase HDD capacity and lower cost/GB.

Hitachi GST Results

Then the recession hit, and the fourth quarter of 2008 showed a substantial profits drop, from an estimated $85m in the preceding quarter to just $4m.

Executive changes

This was followed by executive changes in the first quarter of 2009. Steven Campbell was appointed as Chief Technology Officer in January 2009, with global responsibility for all aspects of the company’s product development and technical vision. In February chief financial officer Stephen Milligan was promoted to President, whilst keeping the CFO role and remaining at the company's San Jose, California headquarters.

Hiroaki Nakanishi remained as chairman, but also became an executive VP at parent Hitachi, Ltd. responsible for the Hitachi Group's global strategy. There was no official full-time Hitachi GST CEO.

Another executive left Hitachi GST; Shinjiro Iwata, an Executive Vice President became CEO of Service and Global Business for the Information and Telecommunication Systems Group of Hitachi, Ltd. There was also an incoming executive, Masaya Watanabe, who joined Hitachi GST as its Chief Strategist of Data Storage reporting to Steve Milligan. He came from Hitachi's enterprise server division.

The first calendar 2009 quarter was poor. Revenues fell to £1.026bn from the previous quarter's $1.252bn and there was a net loss of $57m plus a fall in HDD unit shipments to 19.2m from the previous quarter's 22.26m.

The next one was slightly better. Revenues rose slightly to $1.109bn and there was a loss again, but a smaller one at $32m. The glory days of 2008 are becoming a distant memory. The recession hit Western Digital and Seagate even harder, with plant closures, headcount reductions and, in Seagate's case, executive changes at CEO and direct report levels.

Revenues and income fell at Hitachi GST but it kept on expanding. It bought SimpleTech earlier this year, to gain external drive capabilities and released two products in July. There was the SimpleTOUGH portable USB drive, a colorful SimpleDRIVE Mini portable USB drive, together with a SimpleNET network storage adapter for sharing USB drive content over a home or office network.

Hitachi GST also expanded its product capacity by buying an unwanted WD aluminium platter plant in Malaysia at the beginning of July.

Reducing security risks from open source software

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*
Amazon Reveals One Weird Trick: A Loss On Almost $20bn In Sales
Investors really hate it: Share price plunge as growth SLOWS in key AWS division
Auntie remains MYSTIFIED by that weekend BBC iPlayer and website outage
Still doing 'forensics' on the caching layer – Beeb digi wonk
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
BlackBerry: Toss the server, mate... BES is in the CLOUD now
BlackBerry Enterprise Services takes aim at SMEs - but there's a catch
The triumph of VVOL: Everyone's jumping into bed with VMware
'Bandwagon'? Yes, we're on it and so what, say big dogs
Carbon tax repeal won't see data centre operators cut prices
Rackspace says electricity isn't a major cost, Equinix promises 'no levy'
prev story

Whitepapers

Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
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.
Top 8 considerations to enable and simplify mobility
In this whitepaper learn how to successfully add mobile capabilities simply and cost effectively.
Seven Steps to Software Security
Seven practical steps you can begin to take today to secure your applications and prevent the damages a successful cyber-attack can cause.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.