About SEAGATE TECHNOLOGY LLC

Seagate Technology knows that if you want to survive in the storage market, you'd better have drive. The company is a leading independent maker of hard disk drives (HDDs) used to store data in computers. Its drives are used in systems ranging from personal computers and consumer electronics to high-end servers and mainframes. The company also makes solid-state drives (SSDs). Seagate sells directly to computer manufacturers and through distributors. About 70% of sales are to manufacturers, which include Hewlett-Packard and Dell. Distributors and retailers account for the rest. Seagate generates around three-quarters of its sales outside the US. LaCie, a storage maker based in France, is a Seagate subsidiary.

Geographic Reach

Seagate makes its memories in Malaysia, China, Singapore, Thailand, the UK, and the US. Half of the company's sales originate in Singapore, with 28% coming from the US and 17% from the Netherlands. Sales to customers in Singapore and the US rose in 2015 (ended July) while they fell in the Netherlands.

Sales and Marketing

Dell and Hewlett-Packard have been significant customers for Seagate, respectively accounting for 14% and 12% of sales in 2015. While such OEMs generate 71% of Seagate sales, distributors account for 17% and retailers, 12%. Seagate is expected to maintain sales relationships with Hewlett-Packard Enterprise and HP Inc., the two companies resulting from the split up of HP. Seagate also expects to continue selling to Dell and EMC if their proposed merger goes through.

Financial Performance

Revenue ticker up a bit in 2015 as the company added $172 million to its top line to reach $13.76 billion. The acquisitions of Xyratex and LSI's flash business helped boost revenue, but the company saw a 4% decrease in units shipped for the year.

Net income rose 11% to $1.74 billion in 2015 on gains realized from a resolved dispute with competitor Western Digital. Seagate received $430 million in the settlement.

Cash flow from operations increased to $2.65 billion in 2015 from $2.56 billion in 2014.

Strategy

Seagate contends with diminishing PC sales, which means fewer HDDs, and the continual decline in prices for storage devices. In the oast year the company has sealed deals with IBM and Hewlett-Packard Enterprise to use its HDDs in those companies' high performance computing systems. Seagate has moved through acquisitions to shore up its offerings in SSDs, which are gaining market share. SSDs, which use NAND flash memory, are faster, quieter, use less energy, and are more durable than HDDs. They remain more expensive than hard drives, but prices are coming down. The company also has released new products for challenging environments as well as consumer-oriented external hard drives for storing photos, videos, and other files.

Mergers and Acquisitions

Seagate spent more than $1 billion in the past two years on flash storage assets.

In 2015 the company bought Dot Hill Systems Corp., a provider of storage arrays and storage software, to boost its cloud offerings. Seagate paid about $650 million.

The previous year Seagate bought LSI’s Accelerated Solutions Division and Flash Components Division from Broadcom Limited for about $450 million to enhance and expand its flash products.

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SEAGATE TECHNOLOGY LLC

10200 S De Anza Blvd
Cupertino, CA 95014-3029
Phone: 1 (408) 658-1000
Fax: 1 (831) 438-3320

Stats

  • Employer Type: Public
  • Pres & Gen Mgr-i365: Terry R Cunningham
  • Chairman: Stephen J Luczo
  • President: Wanda Pearson

Major Office Locations

  • Cupertino, CA

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