As we’ve already seen, Seagate Technology (STX) shipped 35.1 exabytes (or EB) for Nearline with an average capacity of 5.9 terabytes per drive in fiscal 2Q18. Total EB shipments rose 65%, and average capacity rose 30% in the quarter ended December 2017. Seagate’s 10-terabyte Nearline product continued to be the company’s leading enterprise revenue SKU (stock keeping unit) in 2Q18.
Seagate also achieved volume and revenue growth QoQ (quarter-over-quarter) in its 12-terabyte Nearline product vertical since Seagate continues to ramp up for material revenue contribution in fiscal 3Q18. The increase in demand for Nearline products is expected to create opportunities for Seagate’s mass storage portfolio. According to chief financial officer David Morton, “Use cases will cause capacity points to span from 2 to 4Tb for certain applications and up to 16Tb for other customer needs.”
In 1Q18, Seagate shipped 1 million 10-terabyte units, a rise of 300% YoY (year-over-year). Seagate is optimistic that it is well poised to cater to cloud customer requirements with its portfolio of products.
While Seagate is banking on Nearline storage to drive revenue, Western Digital (WDC) has been able to lead the capacity enterprise market, driven by its helium-based products. WDC’s HGST (Hitachi Global Storage Technologies) brand was the first to launch a helium hard drive resulting in a significantly lower cost of ownership. These hard drives reportedly reduce energy consumption by 23% and the weight-to-data ratio by 30%, which results in an improvement in product performance and an extension of the product’s lifetime.
Seagate also has several flash-based products that are ready to scale and gain traction across multiple markets. Seagate aims to diversify and expand its competitive HDD (hard disk drive) mass storage portfolio with SSD (solid state drive) and enterprise storage solutions. That’s likely to drive Seagate’s revenue growth and profit margins over the next few years.