Western Digital Corp. Chief Executive John Coyne spoke of a small acquisition at a recent day with analysts.
The Lake Forest disk drive maker bought the controller chip division of Switzerland’s STMicroelectronics NV, according to a report on EETimes.com, an electronics industry Web site.
Terms of the deal weren’t disclosed. Western Digital didn’t announce the deal.
Instead, Coyne spilled the news in his introductory remarks at a conference with analysts in July. The deal closed in June.
The move is one more tool under Western Digital’s belt that’s set to help it control costs by running almost the entire production of disk drives itself.
It also helps manage the prices of its raw materials by minimizing the chance that Western Digital could be squeezed by suppliers.
“When you own all of the technology pieces, you can better and more efficiently and more timely put together the optimization of the system,” Coyne told analysts. “All of our competitors have their own hard disk controller capability. We now have that and therefore all of the firmware that we write to operate that core can now be common across our multiple drive platforms. So it helps us on efficiency and it helps us on speed.”
The buy lets Western Digital better compete with top rival Seagate Technology LLC, which has the biggest market share for disk drives.
A year ago, Western Digital paid $1 billion for San Jose-based Komag Inc., which makes thin-film metal disks that store data.
The Komag buy built on Western Digital’s 2003 acquisition of then-bankrupt Read-Rite Corp., which makes heads that read the metal disks.
Monster Client
Aliso Viejo startup Transcepta LLC, a maker of software that helps turn paper invoices into digital files, nabbed New York-based Monster Worldwide Inc. as a customer.
Monster, best known for its recruiting and job search Web site monster.com, picked privately held Transcepta to help speed along its back-office accounting.
“What typically happens when a company receives an invoice is they pay someone to type the information into their accounts payable system and start the process for approvals and paying the bill,” said Shan Haq, vice president of marketing and product management. “It’s expensive to have people sitting around doing this and there are usually a number of errors that take place that require following up.”
Transcepta hooks up with the suppliers issuing the invoices and has them submit the documents through its software.
It then takes the invoice and turns it into a digital format that the company can feed into its accounts payable system.
“The suppliers don’t have to change their billing systems or do anything different outside their normal workflow,” Haq said. “The service we provide is getting the invoice from the suppliers’ format to the accounts payable department in whatever form they need. We act as a pipe to enable that connection.”
Transcepta charges an upfront fee to its customers to set up the system. It charges a monthly fee to process invoices and host the technology. It charges a small fee, less than $30 a month, to the suppliers.
The company got its start in 2005. Transcepta, which has about 25 workers here, doesn’t disclose sales.
It’s funded by Tech Coast Angels, a loose group of investors who give seed money to promising startups.
Transcepta’s raised about $7 million to date.
The company said it hasn’t decided yet if it will look to raise venture funding.
Gateway Ends Direct Orders
Irvine’s Gateway Inc., part of Taiwanese PC maker Acer Inc., did away with its direct-to-consumer sales efforts.
The company said recently that it’s set to focus on selling desktop computers, laptops and monitors through stores, online retailers and via resellers. It is no longer selling computers from its own Web site.
And now customers no longer can order directly from Gateway over the phone.
The direct sales model was pioneered by one of Gateway’s top competitors, Dell Inc., and copied by many other PC makers that sell to U.S. consumers.
The move is set to simplify Gateway’s business, save the company money and synch it with Acer’s sales strategy.
“We are shifting Gateway’s distribution method to better align with Acer’s successful global strategy, which was built upon an indirect model,” said Mark Hill, U.S. general manager for Acer.
Acer purchased Gateway for $710 million last year. It’s been working through folding Gateway’s operations into its own and reorganizing its Irvine offices.
