Feeds

'Seagate's OCZ gobble was real, but went sour in CEO row'

Insiders claim former top dog Petersen wanted more control

High performance access to file storage

Juicy scuttlebutt from storage insiders suggests the Seagate acquisition of OCZ fell through because the larger firm refused to give OCZ's CEO Ryan Petersen a seat on its board. According to our sources, this, in combination with flash NAND shortages at OCZ, led to Petersen's eventual resignation.

Petersen founded and ran OCZ, one of the nimblest and most aggressive flash SSD and PCIe card product suppliers in the game. It had a fast-expanding product range, featuring both consumer and enterprise products, and bought fabless IndiLinx so it could own its own controller technology. But what OCZ didn't have was a relationship with a flash foundry supplier to assure it of predictable NAND chip supply. This proved to be a decisive flaw in its strategy.

As customers perceived the advantages of faster data access leading to faster app execution in servers, flash storage product supply soon became a priority for storage product suppliers such as EMC, NetApp and so forth. It became a priority also for the disk drive suppliers Seagate and Western Digital to protect their businesses against the flash incursion – by getting their own flash product capability.

Ryan Petersen

Ryan Petersen

Western Digital bought Hitachi GST and got a leg up with that company's Intel-based SSDs, leaving Seagate with a problem. So Seagate and OCZ started talking. OCZ needed a stronger, well-funded partner that could give it more enterprise credibility and the basic fit looked good. According to our sources, the was worked on and was almost done on the financial side, but – insiders say – Petersen apparently wanted a seat on Seagate's board. Allegedly this wasn't acceptable to Seagate but according to our sources, Petersen held out for it.

And, of course, OCZ didn't manage to bag sufficient NAND flash components to convert its SSDs into the mega-sellers they should have been: it hadn't any flash fab tie-ups and had to buy chips on the open market, resulting in a near $20m revenue miss in the quarter. Soon after, Petersen had to leave OCZ.

Now OCZ has an interim CEO, chief marketing officer Alex Mei, and its stock is getting killed with investors, who anticipate a lousy quarterly report in a couple of weeks time.

The Register asked OCZ and Seagate for comment. Seagate's spokesperson said: "Our company policy is that we do not comment on market rumours." OCZ did not respond in time for publication. ®

High performance access to file storage

More from The Register

next story
Seagate brings out 6TB HDD, did not need NO STEENKIN' SHINGLES
Or helium filling either, according to reports
European Court of Justice rips up Data Retention Directive
Rules 'interfering' measure to be 'invalid'
Dropbox defends fantastically badly timed Condoleezza Rice appointment
'Nothing is going to change with Dr. Rice's appointment,' file sharer promises
Cisco reps flog Whiptail's Invicta arrays against EMC and Pure
Storage reseller report reveals who's selling what
Just what could be inside Dropbox's new 'Home For Life'?
Biz apps, messaging, photos, email, more storage – sorry, did you think there would be cake?
IT bods: How long does it take YOU to train up on new tech?
I'll leave my arrays to do the hard work, if you don't mind
Amazon reveals its Google-killing 'R3' server instances
A mega-memory instance that never forgets
USA opposes 'Schengen cloud' Eurocentric routing plan
All routes should transit America, apparently
prev story

Whitepapers

Mainstay ROI - Does application security pay?
In this whitepaper learn how you and your enterprise might benefit from better software security.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
3 Big data security analytics techniques
Applying these Big Data security analytics techniques can help you make your business safer by detecting attacks early, before significant damage is done.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Mobile application security study
Download this report to see the alarming realities regarding the sheer number of applications vulnerable to attack, as well as the most common and easily addressable vulnerability errors.