December 21, 2005 (Computerworld) --
In a surprise move today, Seagate Technology announced that it has struck a deal to purchase its chief competitor in the hard disk drive manufacturing market, Maxtor Corp. Bill Watkins, president and CEO of Seagate Technology, spoke with Computerworld after the $1.9 billion deal was announced about what technology Maxtor brings to the table and what the merger will mean for both companies (see "Seagate to buy Maxtor for $1.9B in stock"). Will this result in layoffs at Maxtor and Seagate? Yes. Layoffs at both companies or just at Maxtor? You could make the argument it might be more on their side. But it's too early for us to tell you who's going to go. What does Maxtor bring to the table considering this is a company that has been losing money? After doing due diligence, [we found] they're in better shape than most people realize. Historically, when deals have been done in this industry, people have gone out to acquire some sort of product road map, technology or specific business. This is not what this is about. We're very comfortable with our product road map and very comfortable with our manufacturing and platforms and strategy. This is really about bringing over the Maxtor revenue and leveraging it through our infrastructure. We get tremendous scale of value from that. On the gross margin side, as we layer this revenue over our fixed cost, we get an efficiency there. If you look at the [operating expenditures], we believe in the combined company we can eliminate about $300 million in expense, getting tremendous leverage out of our engineering resources. One way to think about this is, in a sense, we're buying revenue and leveraging it through our operating matrix. Where will this $300 million in savings come from? I believe I can run the combined company with about 25% more spending than I currently do at Seagate. When do you expect to see this deal close? I think it's going to be in the second half of calendar year 2006. I expect six to nine months. What other value is there in this deal? There are some assets we think are valuable over there. Their China facilities, their media facilities we feel are both state of the art and are capable of going forward with perpendicular [recording technology]. We believe they have a very good brand in that space. I think from an additional engineering resources perspective, they have some good people that we can bring on. You're already developing perpendicular technology. How does Maxtor bring that to the table for you? They don't. We take their facilities, put our infrastructure in
One positive development stemming from the collapse of Wall Street may be a boost in interest in computer science and IT careers among students who were previously interested in financial services jobs.
Enabling Data Centers that Are Both Automated and Dynamic
Enabling Data Centers that Are Both Automated and Dynamic View this webcast now! Go to the webcast
Virtual Reality
Download this Computerworld briefing, a $49.95 value free, compliments of Riverbed Technologies. (Source: Computerworld) Is your organization facing the struggles of ineffective capacity utilization, growing data volumes, labor intensive storage management, and a need for better disaster recovery?
The data center is real, but storage is turning virtual at many organizations that need to manage these exploding storage needs. Learn how your organization can benefit from storage virtualization in this new Computerworld Report, available free for a limited time, compliments of Riverbed.
Brocade and the File Area Network - A Taneja Group Solution Profile
Get this white paper now! (Source: Brocade) This Taneja Group report examines how Brocade FAN solutions are creating a stateless end-to-end file and block data infrastructure. Download this white paper
White Papers
Read up on the latest ideas and technologies from companies that sell hardware, software and services.
Business Continuity Zone
An organization's business continuity plan helps keep critical functions running during an emergency–the power fails, a virus is unleashed on your network, a natural disaster has occurred. Even the slightest downtime or loss of data can cripple your operation. CDW can help you prevent disaster by implementing a well-planned recovery strategy. Click here to visit the ZoneSee All Zones
Intercept Spam & Viruses With MessageLabs MessageLabs is offering a complimentary 30 day trial of its managed Anti-virus and Anti-spam security solutions. MessageLabs guarantees complete protection against all know and unknown email threats. By providing 24 hour support, your business can increase productivity and decrease risk. Register for a complimentary trial and receive a free datasheet. Download this white paper now!
Jack Demo
Have WAN acceleration solutions got your head spinning? Our Technology Demo sorts it out. See how our technology offers a comprehensive solution to the entire WAN performance issue including mobile workers' needs. Download this demo and discover how everyone, from branch office workers to executives and sales people on the go, get the same LAN-like access to their enterprise applications and data they enjoy when they're at headquarters. Go now!
See your link here
Subscribe to
Computerworld 
or
Other Storage Stories
Enabling Data Centers that Are Both Automated and Dynamic 
Download this Computerworld briefing, a $49.95 value free, compliments of Riverbed Technologies. 
Get this white paper now!
Read up on the latest ideas and technologies from companies that sell hardware, software and services. 
Business Continuity Zone
MessageLabs is offering a complimentary 30 day trial of its managed Anti-virus and Anti-spam security solutions. MessageLabs guarantees complete protection against all know and unknown email threats. By providing 24 hour support, your business can increase productivity and decrease risk. Register for a complimentary trial and receive a free datasheet.
