As part of a branding realignment following a series of acquisitions, Western Digital is spinning down the HGST brand. Western Digital acquired Hitachi Global Storage Technologies (HGST) in March 2012, though finalization of this deal was tied up in regulatory hurdles for years, and required a variety of concessions to be approved.
For a brief review, to satisfy regulators, HGST transferred manufacturing facilities and granted licenses for patents to Toshiba, allowing that company to manufacture 3.5″ hard disks for the first time. Despite this concession, China’s Ministry of Commerce held up the deal for more than three years. In October 2015, Chinese regulators approved the deal, though this required Western Digital and HGST to continue as two separate brands with separate sales teams for two years.
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As it stands, the key decision makers at Western Digital, including CEO Stephen Milligan, COO Michael Cordano, and CFO Mark Long all assumed their positions as a result of the HGST acquisition, making the deal look like a reverse takeover.
As a result of this branding realignment, HGST’s former product lineup, including Ultrastar and Deskstar drives, will now be branded as Western Digital, which will be used as the sole brand for enterprise and commercial products. Likewise, flash array vendor Tegile, which was acquired in 2017, will be rebranded. According to Western Digital:
Western Digital is continuing its transformation in a fast-moving data technology landscape, offering an exceptionally broad storage portfolio to address diverse needs. As part of this transformation, the company is unifying its brands to provide customers with more brand clarity, portfolio flexibility and simplification of choice. Over the coming months, customers will see products previously branded as Tegile™ and HGST, as well as some SanDisk® and WD® commercial and enterprise products, transition to Western Digital® branding.
For consumer products, the “WD” initialism will remain, alongside the G-Technology brand of external storage products aimed toward Apple users, the Upthere cloud storage service, and SanDisk solid-state storage products. (Western Digital acquired SanDisk in May 2016.)
Despite the consolidation of traditional hard disk manufacturers, analysts believe this will not result in high prices for platter-based hard drives. According to Joseph Unsworth, Research VP at Gartner, that market will continue as before, with prices determined by supply and demand, with competition mostly from the flash storage market. Unsworth noted that “In Data Centers, lower capacity/mission critical HDDs are increasingly being replaced by flash/SSD technology, however, the nearline capacity business critical HDD technology maintains a considerable advantage in ASP/GB. NAND Flash/SSD technology still has a long way to go to even reach 3X the ASP/GB so we still see a long-term (post-2030) opportunity for these capacity HDD.”
The big takeaways for tech leaders:
- Products formerly branded as HGST and Tegile, as well as some commercial/enterprise SanDisk and WD, are transitioning to being branded as Western Digital.
- Analysts believe this will not result in high prices for platter-based hard drives, as competition from flash storage vendors continues.
