Western Digital Corp.’s breakthrough helium-based drives are getting strong demand from the world’s largest data center customers, ensuring the Irvine-based company a steady pipeline of business in coming years in the lucrative segment of high-capacity storage products.
Its San Jose subsidiary, HGST, acquired in a blockbuster $4.8 billion deal in 2012, is serving an impressive list of customers with its HelioSeal brand of hard drives, including the likes of streaming video giant Netflix Inc., No. 2 PC maker Hewlett-Packard Co., and Shenzhen-based Huawei Technologies Co., the world’s second largest networking equipment maker, plus some of the biggest social media and search companies.
HGST—which was coveted for its innovation, key corporate customers, and position in the growing server and storage market—recently hit a milestone, deploying more than 1 million helium-based drives since the November 2013 launch of the 6-terabyte Ultrastar He6 hard disk drive.
Strong early adoption has led the company to ramp up production and forecasts as it invests hundreds of millions of dollars into updating manufacturing processes at its plants in San Jose, Rochester, Minn., and Japan to capture and harness one of the most abundant yet elusive elements on earth.
“Every high-capacity drive we ship from 2017 and onward will all be helium-based,” said HGST Vice President of Product Marketing Brendan Collins. “This technology is good for the next 10 years at least with this platform.”
HGST has built a nice runway and early lead on Cupertino rival Seagate Technology Inc. in the high-margin business line amid an explosion in data creation and replication that’s doubling every two years.
The enterprise-grade helium drives aren’t expected in the near future to replace traditional business desktop and consumer drives, which accounted for the bulk of Western Digital’s $15.1 billion in revenue in the 12 months through June, the end of its fiscal year.
The world’s largest disk drive maker—which is ranked No. 3 on the public companies list (see page 10)—sold nearly 250 million hard drives in that period.
“Regardless, it’s good to see innovation in the HDD world,” said Jayson Noland, senior analyst in the San Francisco office of Milwaukee-based Robert W. Baird & Co.
More Capacity, Cooler
Netflix’ upgrade to the 6 TB drives increased storage capacity by 50%, while reducing power consumption by 23%, the company said.
The hermetically sealed, helium-filled drives run about 39 degrees cooler than the standard 4 TB air-filled drives Netflix was using—key benefits for large data centers that cost nearly as much to operate as to build, with cooling costs a major part of overhead.
It’s not uncommon for big social networks, online retailers, video streaming providers and search companies to house 100,000 servers and thousands of drives in data centers as large as 10 football fields put together.
Los Gatos-based Netflix streams movies, TV shows and documentaries to more than 48 million viewers in 41 countries monthly, consuming about a third of all consumer traffic online during prime-time hours.
HGST is targeting smaller cloud service providers in China and Europe, and additional Tier 2 and Tier 3 manufacturers with its new line of 8 TB drives released in September. The improved technology delivers about 33% more storage capacity than 6 TB drives and makes the 3.5-inch drives lighter, more energy efficient and reliable.
“We’re taking it to a whole new level,” Collins said. “This will be a new foundation.”
Potential
The technology, which took a decade to develop, holds the potential for new applications for “big data,” namely accessing reams of data that currently go unstored—and just as importantly—unused.
“If you look at all the data that is being created, only about 30% to 40% of that is actually stored,” Chief Executive Steve Milligan told the Business Journal in a recent interview. “It is too expensive to store, and people are unclear how to utilize that data to create value.”
Western Digital is also sampling a new offering for customers called “active archives,” or elastic storage, that allows users to store the lost data and access it quickly at an economical cost.
The data is stored on 96-drive racks using helium-based drives.
The technology is already drawing interest from prospects, although the company hasn’t provided guidance on financials or production timelines.
“We’re testing it with selected customers that are attracted to the notion of what the product can do,” Milligan said. “It’s basically a subsystem that will be provided to our customers that will be utilized for big-data analytics.”
