|Public limited company|
S&P 500 Component
(as Shugart Technology)
|Headquarters||Cupertino, California, United States (operational), Dublin, Ireland (legal domicile)|
|Stephen J. Luczo (Chairman, CEO)|
|Products||Hard disk drives, hybrid drives and solid-state drives|
|Revenue||US$13.73 billion (2015)|
|US$2.05 billion (2015)|
|US$1.74 billion (2015)|
|Total assets||US$9.84 billion (2015)|
|Total equity||US$3.01 billion (2015)|
Number of employees
Seagate Technology PLC (commonly referred to as Seagate) is an American data storage company. It was incorporated in 1978, as Shugart Technology. Since 2010, the company is incorporated in Dublin, Ireland, with operational headquarters in Cupertino, California, United States.
Seagate developed the first 5.25-inch hard disk drive (HDD), the 5-megabyte ST-506, in 1980. They were a major supplier in the microcomputer market during the 1980s, especially after the introduction of the IBM XT in 1983. Today Seagate along with Western Digital dominates the HDD market. Much of their growth has come through acquisition of competitors. In 1989, Seagate acquired Control Data Corporation's Imprimis division, makers of CDC's HDD products. Seagate acquired Conner Peripherals in 1996, Maxtor in 2006, and Samsung's HDD business in 2011.
Founding as Shugart Technology
Seagate Technology (then called Shugart Technology) was incorporated on November 1, 1978, and commenced operations with co-founders Al Shugart, Tom Mitchell, Doug Mahon, Finis Conner and Syed Iftikar in October 1979. The company came into being when Conner approached Shugart with the idea of starting a new company to develop 5.25-inch HDDs which Conner predicted would be a coming economic boom in the disk drive market. The name was changed to Seagate Technology to avoid a lawsuit from Xerox's subsidiary Shugart Associates (also founded by Shugart).
Early history and Tom Mitchell era
The company's first product, the 5-megabyte ST-506, was released in 1980. It was the first hard disk to fit the 5.25-inch form factor of the Shugart "mini-floppy" drive. The hard disk, which used a Modified Frequency Modulation (MFM) encoding, was a hit, and was later released in a 10-megabyte version, the ST-412. With this Seagate secured a contract as a major OEM supplier for the IBM XT, IBM's first personal computer to contain a hard disk. The large volumes of units sold to IBM, the then-dominant supplier of PCs, fueled Seagate's early growth. In their first year, Seagate shipped $10 million of units to consumers. By 1983, the company shipped over 200,000 units for revenues of $110 million.
The 20-megabyte version, the ST-225, and the 30-megabyte version, the ST-238 (physically similar but using a Run Length Limited ((2,7) RLL) encoding to improve storage capacity), were popular aftermarket additions for the IBM XT and AT and compatible microcomputers. These were also made in SCSI versions. In 1983, Al Shugart was replaced as president by then chief operating officer, Tom Mitchell, in order to move forward with corporate restructuring in the face of a changing market. Shugart continued to oversee corporate planning. By this point the company had a 45% market share of the single-user hard drive market, with IBM purchasing 60% of the total business Seagate was doing at the time.
In 1989, Seagate acquired Control Data's (CDC) Imprimis Technology, CDC's disk storage division, resulting in a combined market share of 43 percent. The acquisition was synergistic with little overlap in products or markets; Seagate benefited from Imprimis' head technology and quality reputation while Imprimis gained access to Seagate's lower component and manufacturing costs.
Second Al Shugart era (1990s)
In September 1991, Tom Mitchell resigned as president under pressure from the board of directors, with Al Shugart reassuming presidency of the company. Shugart refocused the company on its more lucrative markets, and on mainframe drives instead of external drives. He also pulled away from the practice of outsourcing the production of components overseas, which allowed Seagate to better keep up with demand as the demand for PCs increased exponentially in 1993, across the market. This included a domestic partnership with Corning Inc., which began using a new glass ceramic compound to manufacture disk substrates. In 1991, Seagate also introduced the Barracuda HDDs, the industry's first hard disk with a 7200-RPM spindle speed.
In May 1993, Seagate became the first company to cumulatively ship 50 million HDDs over its firm's history. The following year Seagate Technology Inc moved from the Nasdaq exchange to the New York Stock Exchange, trading under the ticker symbol SEG. Upon leaving, the company was the 17th-largest company in terms of trading volume on the Nasdaq exchange. In 1996, Seagate merged with Conner Peripherals to form world's largest independent hard-drive manufacturer. Following the merger, the company began a system of consolidating the components and production methods within its production chain of factories in order to streamline how products were built between plants.
In 1996, Seagate introduced the industry's first hard disk with a 10,000-RPM spindle speed, the Cheetah 4LP. The product increased to a speed of 15,000-RPM by 2000 with the release of the Cheetah 15X. In May 1997 the High Court of Justice in England awarded Amstrad PLC $93 million in a lawsuit over reportedly faulty disk drives Seagate sold to Amstrad, a British manufacturer and marketer of personal computers. That year Seagate also introduced the first Fibre Channel interface hard drive. In 1998, Seagate produced its 1 billionth magnetic recording head, and within a few months Shugart resigned his positions with the company. That year the firm Seagate Research was also established in Pittsburgh, a $30 million investment focused on future technologies and prototypes. Technology developed by the center would include devices like the hard drive disk for Microsoft's first Xbox. In 1999, Seagate shipped its 250 millionth hard drive.
Becoming a private company in 2000
In 2000, Seagate became a private company again, with a management buy-out and stock transfer to Veritas Software Corp. The total deal, worth about $20 billion, included the sale of its disk-drive operations for $2 billion to an investor group led by Silver Lake Partners. The goal of the deal was to unlock the value of the 33% ownership stake Seagate had in Veritas, which had put the value of Seagate's stock at around $33 billion even though its market cap was only $15 billion. The company was incorporated in Grand Cayman and stayed private until it re-entered the public market in 2002.
Re-emerging as a public company (2002–2010)
In 2003, Seagate re-entered the HDD market for notebook computers and provided the 1-inch disk hard drives for the new first iPods. This led to a trend of digital devices being created with progressively more and more memory, especially in cameras and music devices. The following year The New York Times called Seagate "the nation's top maker of hard drives used to store data in computers", as its revenue forecast outpaced Wall Street estimates towards the end of the year.
At the beginning of 2006, Forbes magazine named Seagate its Company of the Year as the best managed company in the United States. Forbes wrote that, "Seagate is riding the world's gadget boom. Its 1-inch drives are the archives for cameras and MP3 players." It also credited Seagate as being the company that "sparked the personal computer revolution 25 years ago with the first 5.25-inch hard drive for the PC".
In April 2008, Seagate was the first to ship 1 billion HDDs. According to CNet, it took 17 years to ship the first 100 million and 15 years to ship the next 900 million. In 2009, Bill Watkins was released from employment as CEO and later that year Seagate announced their first solid-state drive, the Seagate Pulsar.
2010 to present
In December 2011, Seagate acquired Samsung's HDD business. Also 2011, Seagate released Seagate GoFlex Satellite, with Wi-Fi connectivity.
2013: In March Seagate announced that it was the first disk manufacturer to have cumulatively shipped two billion HDDs; at a shipping rate of eight drives per second. Seagate was the first HDD company to begin shipment of shingled magnetic recording drives, announcing in September that they had already shipped over 1 million such drives.
By late 2014, Seagate had shipped 10 million Solid State Hybrid Drives (SSHD). Seagate created this hybrid drive product concept in 2007.
Seagate was traded for most of its existence as a public company under the symbol "SGAT" on the NASDAQ system, then moved to the NYSE under the symbol "SEG" in the 1990s. In 2000, Seagate incorporated in the Cayman Islands in order to reduce income taxes. In 2000, the company was taken private by an investment group composed of Seagate management, Silver Lake Partners, Texas Pacific Group and others in a three-way merger-spinoff with Veritas Software; Veritas merged with Seagate, which was bought by the investment group. Veritas was then immediately spun off to shareholders, gaining rights to Seagate Software Network and Storage Management Group (with products such as Backup Exec), as well as Seagate's shares in SanDisk and Dragon Systems. Seagate Software Information Management Group was renamed Crystal Decisions in May 2001. Seagate re-entered the public market in December 2002 on the NASDAQ as "STX."
Partnerships and acquisitions
Finis Conner left Seagate in early 1985 and founded Conner Peripherals, which originally specialized in small-form-factor drives for portable computers. Conner Peripherals also entered the tape drive business with its purchase of Archive Corporation. After ten years as an independent company, Conner Peripherals was acquired by Seagate in a 1996 merger.
In 2005, Seagate acquired Mirra, Inc., a producer of personal servers for data recovery. It also acquired ActionFront Data Recovery Labs, which provides data recovery services. In 2006, Seagate acquired Maxtor in an all-stock deal worth $1.9 billion, and continued to market the separate Maxtor brand. The following year, Seagate acquired EVault and MetaLINCS, later rebranded i365.
In 2014, Seagate acquired Xyratex, a storage systems company, for approximately $375 million. The same year, it acquired LSI's flash enterprise PCIe flash and SSD controller products, and its engineering capabilities, from Avago for $450 million.
The security of Segate products is low as they are known to have backdoors.
On January 21, 2014, numerous tech articles around the globe published findings from the cloud storage provider Backblaze that Seagate hard disks are least reliable among prominent hard disk manufacturers. However, the Backblaze tests have been criticized for having a flawed methodology that has inconsistent environment variables, such as ambient temperatures and vibration, and disk usage.
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