The HDD market now has just four players.
The face of the storage market will never be the same after today. Western Digital, world unit shipment leader in HDDs, has just inked a deal to purchase Hitachi Global Storage Technologies for $4.3 billion. Both boards have approved the deal, and it only awaits regulatory approval before finalization. Hitachi will have a 10% stake in the combined company. HGST CEO Steve Milligan will be President, while WD president and CEO John Coyne will be the head.
So what does this mean for the market landscape? The new combined company will control a whopping 48% of the world HDD market. The new combined company will finally beat Seagate in revenue, something Western Digital still cannot do on its own. It is also expected to allow strengthen WD's presence in the enterprise SSD market.
Seagate currently has a lock on that segment. Western Digital focuses mainly on military and industry embedded SSDs. But Hitachi has a solid set of enterprise SSD offerings, and a new merged SSD/HDD product that just launched in November.
This may be a worrying move to many in the HDD market. There are now only four companies competing, and WD controls nearly half of it. This move seems destined to spark a merger between Seagate and one (or both) of the remaining hold-outs. The HDD market in a few year's time could be entirely dominated by two gargantuan combi-companies.
Buy Now: Sony PlaysStation VR In Stock Here
If the merger works as well as Western Digital hopes, they could end up looking uncomfortably similar to a monopoly. This whole deal still has yet to meet with regulatory approval. If the FTC doesn't have WD locked firmly in their sights, they soon will.