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Without any doubts, leading makers of hard disk drives are late to solid-state drive market. But it looks like the situation is getting better for them thanks to recent take-overs and partnerships.

In less than one month Western Digital, the world’s largest manufacturer of hard disk drives, acquired two companies that specialize on solid-state drives or software for SSDs, sTec and VeloBit. Previously, WD acquired some other companies, which specialized on solid-state storage, including SiliconSystems. As a result of such take-overs Western Digital gains not only technologies and experienced personnel, but also patents and customers.

While actual fruits of all WD’s transactions remain to be seen, financial analysts believe that the management is capable of taking advantage of both acquisitions. In fact, they say that Western Digital is on-track to become not only a viable make of solid-state drives, but also on the extremely lucrative market of solid-state storage for the enterprise, a market now dominated by companies like OCZ Technology Group, Fusion-io and others.

“First, it demonstrates that WD is committed towards pursuing the server-side flash market that Fusion-io (FIO) has pioneered. Second, it underscores the idea that the hardware aspect of that market will ultimately commoditize. A complete solution will include caching/data management software and will carry high margins (50%+, in line with storage array vendors) while a hardware-only solution will carry much lower margins (in line with SSDs/HDDs). Third, it demonstrates that WD has ambitions to move up the enterprise stack and capture a greater portion of the value chain beyond providing storage capacity. Fourth, it pressures Seagate (is Virident partnership enough?). We view this move favorably,” said Edward Parker, an analyst with Lazard Capital Markets, reports Tech Trader Daily.

While WD has a portfolio of SSD, sales of such products remain at a low level. The new acquisitions should help the company to provide competitive solutions over the long-term future.

Tags: Western Digital, WD, Business, SSD


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