"We are focusing on CE products"

"We are focusing on CE products" Bijesh Kamath , May 15, 2004

Hitachi Global Storage Technologies was created last year after Hitachi bought over IBM's hard disk drive business in a $2 billion deal. With an employee strength of 22,000 and 1,500 R&D personnel, the company stands number two behind Seagate in revenue. Pete Andreyev, director on the board of Hitachi Global Storage Technologies and VP, Asia Pacific, explains his role in driving business in India, which has been identified as a strategic market.

How important is India for you?
We have identified two markets worldwide China and India. To be successful worldwide, we have to be successful in these two markets.

What are your plans for India?
We want to play across the board, in every market segment. The market here has been mainly for 5,400-rpm.
India is still not moving to 7,200-rpm as fast as some other markets worldwide 75 percent of the desktop market is 7,200-rpm. We held reseller council meets in Delhi and Bangalore in April, and intend to interact more with the channel. Cyberstar, who we signed up in November, is going to be our primary partner here. We introduced an exclusive warranty program for India in order to penetrate deeper into the market we will give customers an option of an extended warranty of three years.

You have set up a customer support organization in China. Do you have similar plans in India?
Our business in China has grown tremendously in the last two years in China. We won plenty of accounts with domestic OEMs and have got business from contract manufacturers who shifted from Taiwan to the Mainland. We hope to do the same here.

There were concerns among channels about the go-to-market and differences in cultures. How have you fared in solving such concerns?
One of the challenges I had in IBM was that when it decided to focus on software and services. They were not interested in commodity business. It became difficult to get funding for R&D and manufacturing expansion.
Hitachi has said that storage and HDDs are core competencies. At IBM, I had eight managers between myself and the CEO. In Hitachi, I have the same job but only two managers between me and the CEO. It helps in making quick decisions.

What's going to be HGST's focus in the coming years?
We are focused primarily on the SCSI market and the 2.5-inch HDD, and to a lesser degree the 3.5-inch. Hitachi also has a 1.8-inch product and the 1-inch-micro drive. With a combined development team, we have been able to bring out more products in the last 15 months than we probably did in 2-3 years. We have been doing new things related to notebooks. We are focusing on CE products. We have accelerated product development in the past 15 months.

Your opinion of the market in general.
Moving forward, more and more requirements will be for digital video cameras, PDAs, and MP3 players.

Why have SATA drives seen a slow uptake?
Today's SATA has a bridge controller, which is not an efficient solution. As the technology evolves to enable putting everything on a single native controller, the market will grow faster. The second is Intel's strategy of supporting Serial ATA in the chipset itself, which we should see in the second half of 2004 and 2005. Even then, once the controller and chipset is available, people have to develop the motherboard and so on. It will take off probably in the 2006 time-frame, but the transition will begin by end 2004 and will take off in 2005.

Do you see further consolidation of HDD vendors?
In the long term, you have to do well in the small form factor. Vendors who survive will also be those who are vertically integrated.