HGST Adds CIO, Plans for Growth

Hitachi's Global Storage Technologies division announces some changes

April 29, 2008

3 Min Read
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Hitachi Global Storage Technologies (HGST) unveiled its new CIO today, at a time of major restructuring for the company, which was recently rumored to be considering the sale of part of its U.S.-based disk drive business.

Former Sun exec Craig Haught will now be responsible for HGSTs worldwide IT operations, filling the void left by Ranga Jayaram, who took the CIO’s role at chip specialist Nvidia earlier this year.

Prior to joining HGST, Haught was vice president and CIO at San Diego-based semiconductor company Cymer, and he also served as CIO at RAID vendor TeraStor. Earlier in his career, Haught served as Sun’s senior director for IT business and resource planning. He will now report to Steve Milligan, the HGST CFO.

”Craig’s knowledge and experience in global operations and management will enable our IT strategy and investments to be a driving force and essential contributor to Hitachi Global Storage Technologies’ future growth,” said Milligan, in a statement this morning.

The new CIO nonetheless joins HGST at a tough time for the company, which faces stiff competition from disk rival Seagate. Last year, for example, HGST announced plans to restructure its manufacturing operations and launch a spate of new wares in an effort to turn profitable.This was followed by rumors that HGST planned to sell up to 50 percent of its U.S.-based disk drive business to Silicon Valley investment firm Silver Lake Partners, although the vendor declined to comment on a possible sale.

At least one analyst thinks that HGST, which was sold by IBM to Hitachi for $2.05 billion in 2003, still has plenty of work to do.

“I think that Hitachi is not structured to compete effectively in a fast-moving U.S. market that is driven by OEMs,” says Robin Harris of the Data Mobility Group. “One of the big problems that Hitachi has, and certainly, HDS, is that the Japanese leadership across the pond doesn’t really understand the American market and has this slow and deliberate decision-making process.”

The analyst told Byte and Switch that he would not completely rule out the possibility of HGST selling part of its disk-drive business, but thinks that this is unlikely in the current economic climate.

“It’s unclear who would take it,” he adds. “The question is who out there would have the guts to make it a going concern.”Disk-drive related M&A is certainly not unusual at the moment, as evidenced by LSI’s $150 million deal to buy Infineon’s disk business, which was finally completed today.

Despite the economic slowdown, demand for disk drives is growing at a rapid rate. Earlier this year, analyst firm iSuppli reported that the hard disk drive industry was undergoing a resurgence, with 138 million drives shipped in the third quarter of 2007, a 20 percent increase on the prior quarter.

HGST will need to up its ante if it wants to tap into this demand, according to Harris. “The general problem that I see with the disk drive vendors is that there’s too little marketing imagination,” he says, but he warns that rival vendors are still making their presence felt. “Seagate is turning in terrific numbers, and Western Digital is in there slugging as well.”

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  • Data Mobility Group

  • Hitachi Data Systems (HDS)

  • Hitachi Global Storage Technologies (Hitachi GST)

  • Nvidia Corp. (Nasdaq: NVDA)

  • Sun Microsystems Inc. (Nasdaq: JAVA)

  • iSuppli Corp.

  • Seagate Technology Inc. (NYSE: STX)

  • Silver Lake Partners

  • Western Digital Corp.0

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