Western Digital Corp. Chief Executive Steve Milligan was hand-picked to execute the company’s strategic plan laid out more than a year ago.
At the time, the Irvine-based storage products maker identified growth opportunities in the cloud and developing thin and light devices for the connected life of consumers at home and in the office. The company also pinned hopes for growth to its burgeoning line of enterprise solid-state storage products.
Fast forward a year and Milligan has Western Digital hitting those marks, thanks in large part to the integration of Hitachi Global Technologies Ltd., which was acquired in 2012 for $4.8 billion.
The San Jose-based unit has already attracted an impressive list of customers that include Netflix, Hewlett-Packard, and the world’s second largest networking equipment maker, Shenzhen-based Huawei Technologies Co., to test a new storage drive that could reshape the industry.
The key ingredient: helium, an abundant, yet incredibly difficult element to trap. The new six-terabyte helium hard drive increases storage capacity by 50% over the standard four-terabyte drive, an attractive benefit for targeted cloud services providers.
Western Digital has been busy elsewhere under Milligan. It recently released a slate of thin, light and portable devices, including a solid-state hybrid drive, and its branded My Cloud family of storage devices geared toward consumers that allows access to digital content from anywhere in the world.
The company has rolled out a significant TV advertising campaign to tout its mobile benefits, a first.
Western Digital’s disk drives go into computers, external storage devices, corporate networks and consumer electronics, such as DVR players.
Upgrades
Hard drives use spinning disks to store data, unlike the company’s growing line of solid-state drives, which use chips. Hard drives remain the primary storage device for personal computers, as flash-storage adoption has not accelerated as some predicted. That prompted a slew of recent analyst upgrades, including one from JPMorgan Chase & Co., which upped the stock to overweight, raising its target to $100 from $56.
Morgan Stanley analyst Katy Huberty also upgraded Western Digital to overweight, citing increased adoption of cloud computing.
The upgrades helped the company continue its bull run.
Western Digital shares are up nearly 100% in the past year, outperforming its Cupertino-based rival Seagate Technology LLC by more than 25% and the tech-heavy Nasdaq Global Select Market they both trade on by about 66%.
The strong and steady gains helped Western Digital overtake Broadcom Corp. as the most valued technology company in Orange County last year, a title the Irvine-based chipmaker held for more than a decade.
Western Digital had a market value of about $19.4 billion as of late last week, while Broadcom was valued at about $16.3 billion.
The flip marked the first time since the dot.com bubble burst in 2001 that Broadcom wasn’t in the top spot of the local tech sector.
A trio of acquisitions of solid-state drive makers in the past eight months has strengthened its position in attracting key corporate customers and solidified its entree in the growing server and storage market that came with the takeover of Hitachi Global.
The buy also added some 45,000 employees across the globe, a large employment base Milligan led before the acquisition.
Western Digital paid $340 million for Santa Ana-based sTec Inc. in a deal that closed in September and $685 million for Milpitas-based Virident Systems Inc. in October. In July it finalized a deal for Lincoln, Mass.-based VeloBit Inc. on undisclosed terms.
Western Digital closed 2013 as the world’s largest drive maker in revenue and unit sales as it looks to expand its Irvine headquarters.
HQ Expansion
The company is adding 60,000 square feet to handle future growth after posting its best sales year.
It recorded revenue of $15.4 billion in its fiscal year ended in June, up 23% from the same period a year ago.
Adjusted profits topped $2.1 billion, flat from the same period last year.
The company, which moved from Lake Forest to Irvine in 2010, employs nearly 1,600 people in the county.
