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Western Digital To Buy SanDisk (reuters.com)
An anonymous reader writes: Reuters reports that Western Digital will buy SanDisk in a deal worth roughly $19 billion. In a press release, WD said, "The combination is the next step in the transformation of Western Digital into a storage solutions company with global scale, extensive product and technology assets, and deep expertise in non-volatile memory (NVM)." SanDisk has been in business since 1988, and primarily "manufactures flash memory chips and other digital storage for personal computers, data centers and consumer electronics, including smartphones and tablets." They have over 8,000 employees, compared to WD's ~76,000. This follows another major transaction in the storage market, when Dell bought EMC last week.
SDDs will not fall below $1/GB for a very long time.
Seems like so & so buys such & such for $(lazy eight AFAIC) - how long can big evaluations be consumed until the idea of competition is irrelevant. Not just competition on an economic sales end front, but competition for jobs, for innovation, for, well, anything/everything?
Hate to use a cliche but, late stage western capitalism seems to have but one inevitable conclusion :/
I don't like the recent tread of consolidation in the IT market... This needs to stop.
fail
What does WD do with 76,000 employees? R&D? Manufacturing? Sales? Distribution?
That just seems like a lot of employees.
load "linux",8,1
What we learned today: Western Digital still exists.
Yes I assure you, we are quite safe from your "competition" here.
So WD realized that hard drive business is kaput.
No wonder we're still waiting for a 8TB consumer drive from them. They are curbing research spending...
As long as they don't bother encrypting them.
But I recently rebuilt my FreeNAS file server with five 1TB WD Red NAS hard drives for $50 each. A nice upgrade over the Seagate and Hitachi drives that all reported heat-related errors after five years of 24/7 service.
The idea behind free market has always been that whenever there is a buck to be made somebody will endeavor to make it
However, the reality that we live in doesn't work like that --- your exmple of Verizon's acquisition of Alltel which puts further burdens on the consumer, and TFA's WD gobbling up SanDisk are but two of the many examples of how the big corps are fucking up the market place and nobody can do anything about it!
Muchas Gracias, Señor Edward Snowden !
I interpret their relative slowness to market as doing proper testing before releasing product.
I had an array of 4 western digital 4TB drives. Added 2 Seagate 6TB drives, as they were the only company that produced them at the time. One failed after six months - replaced that one, the second died after another 4 or 5 months. I quickly bought two 6TB WD drives and mirrored the data before both Seagate drives failed again. The old 4TB WD drives are still running fine, as are the new 6TB drives, two years later.
My Other Computer Is A Data General Nova III.
They just want to rebrand it so people stop calling it "Scandisk".
If your business $1B cash, that adds $1B to its value.
If your business owns $800 million worth of Sandisk, that adds $800 million to its value.
Therefore, spending $1 billion to buy a company worth less than $1B HURTS the company's value. See HP for some dramatic examples.
The value (stock price) increases only if you get a good deal on the purchase, if you buy a company for less than it is worth. So companies make aquisitions when they think they're getting a good deal. Who doesn't like getting a good deal?
I loved SanDisk's Sansa Fuze. I prefer to have a separate device for my music. Unfortunately, all the subsequent versions really sucked. I hope Western Digital creates a worthy successor.
I was talking about actual value of the purchase, not book value.
If adding 0.8B will make it worth $4B, it IS worth approximately $3.2B, in terms of whether or not it's a good deal. That's the value I was speaking of.
Since it's worth 3.2 to company A, if they buy it for 2.2, they got a good deal. When valuing companies with significant growth potential, you do in fact factor that potential into the value, so much so that it's often a much larger factor than book value.
This doesn't account for actual usage of drive space, people with 8 TB drives might need 8TB of space, but most people STILL don't need that much space.
And consider this, in the next 2-4 years, we'll see a huge drop in SSD pricing as new drives come online with new technology giving 16 TB storage with performances exceeding Spinning drives (not to mention new, higher bus speeds needed).
This is one of the clearest signals that the era of Spinning drives is nearing its end. They will be all but gone within 5-8 years. Add in cloud based storage (BackBlaze style) and you don't need 8TB unless you're a Photographer or hoarder.
Agent K: A *person* is smart. People are dumb, stupid, panicky animals, and you know it.
> The 200 Million extra spend could easily be eaten up by R&D costs and lost market share. This could be a strategic purchase, not a financial one.
The company I work for was just aquired under just such a scenario. The board had three options:
R&D the needed tech: $40 million
Lease license the needed tech: $30 million
Buy a company who had the tech: $20 million
That IS a financial decision, I'd say.
Ps - I don't know how many million the actual costs were for the company I work for. I do know that buying the subsidiary made better financial sense than doing the R&D or licensing the tech.
Sure, I've had the odd lemon WD drive, but every Seagate drive I've owned failed before or not log after it's warranty was up.
I confirmed this with an acquaintance who runs an enormous disk array for a university. They switched exclusively to WD Reds after atrocious failure rates with Seagate drives, and a pilot where they tested Samsung drives.
My Other Computer Is A Data General Nova III.
I am a WD beta tester. I can assure they do beta test their products with real people before release. Best part of being a tester...you get to keep all the gear.
8 GB is still a $40 overage fee if your ISP charges $5 per GB. If you can't get cable or DSL, you're stuck on satellite or fixed cellular.
SSDs use "wear leveling", which spreads out writes to all pages. This means even if a page can only be rewritten 5,000 times, you'll write to tens of of thousands of other pages before you write to this one again. Is the total amount that can be written and overwritten to an SSD really that much lower than what is written to a hard drive over its life?