History of Seagate Technology: 40 Years of Storage

Founded on November 1, 1979 under the name Shugart Technology, Seagate Technology has played a fundamental role in the evolution of data storage, from creating the first 5.25-inch hard drive to becoming one of the world’s leading manufacturers of hard drives and storage solutions. With operational headquarters in Fremont, California, and legal domicile in Dublin, Ireland, Seagate continues to set the pace for the data storage industry.

The Early Days: Shugart Technology and the ST-506

Seagate began its journey as Shugart Technology, founded by a group of industry pioneers, including Alan Shugart, Tom Mitchell, Doug Mahon, Finis Conner, and Syed Iftikar. In 1980, the company launched the ST-506, the first hard drive to use the 5.25-inch format, which represented a revolution in the industry. This hard drive had a capacity of 5 megabytes (MB) and used MFM (Modulated Frequency Modulation) encoding. Subsequently, Seagate introduced the ST-412, a 10 MB version, solidifying its position as a key supplier of hard drives for IBM, especially for the IBM XT, IBM’s first personal computer to incorporate a hard drive.

Thanks to its contract with IBM, Seagate experienced explosive growth in its early years, achieving revenues of $10 million in its first year of operations. By 1983, the company had shipped over 200,000 units and achieved revenues of $110 million.

The Growth of the 80s: Imprimis and Market Leadership

During the 1980s, Seagate consolidated its position as a leader in the hard drive market. In 1989, it acquired the disk storage division of Control Data Corporation (CDC), known as Imprimis Technology, allowing the company to gain access to advanced head technologies and enhance its reputation. This acquisition was key to Seagate achieving a 43% market share in the hard disk industry.

With a strong technological base and the support of IBM, Seagate continued to expand in the personal computer hard drive market, strengthening its position as the undisputed leader.

The 1990s: Innovation and Expansion under Al Shugart

In the 1990s, under the leadership of Al Shugart, Seagate continued to innovate and launch groundbreaking products. In 1991, the company introduced the Barracuda, the industry’s first hard drive with a spinning speed of 7,200 RPM, marking the beginning of a new era in hard drive performance.

In 1996, Seagate acquired Conner Peripherals, making it the largest independent hard drive manufacturer in the world. This merger allowed Seagate to strengthen its position in the hard drive market and optimize its production processes to improve efficiency and reduce costs.

During this decade, Seagate was also a pioneer in introducing new technologies, such as hard drives with 10,000 RPM in the Cheetah series. By the year 2000, the Cheetah series reached 15,000 RPM, representing a significant advancement in hard drive performance for servers and enterprise applications.

Privatization and Seagate’s Resurgence in the 2000s

In the year 2000, Seagate made a strategic decision to privatize the company through a deal with the investment group Silver Lake Partners. This transaction, valued at $20 billion, was the largest purchase of a technology company at the time. The main goal of this maneuver was to unlock Seagate’s value, which held a significant stake in Veritas Software.

Under the leadership of Steve Luczo, who became CEO in 1998, Seagate focused on improving operational efficiency, reducing costs, and optimizing its production lines. The company reduced its number of factories from 24 to 11 and its workforce from 111,000 employees to 50,000, which allowed for increased hard drive production and improved profitability.

In 2002, Seagate went public again and quickly regained its position as a market leader in hard drives.

Expansion and Key Acquisitions: Samsung, Maxtor, and LaCie

Throughout the first decade of the 21st century, Seagate continued to expand through strategic acquisitions. In 2006, it acquired Maxtor, one of the main competitors in the hard drive market, for $1.9 billion. This acquisition allowed Seagate to broaden its customer base and strengthen its position in the consumer market.

In 2011, Seagate acquired the hard drive business from Samsung, which enabled it to access advanced technologies and increase its production capacity in the Asian market. This move also strengthened Seagate’s presence in the mobile storage market.

The acquisition of LaCie in 2014 was another strategic move that expanded Seagate’s product portfolio, especially in the external storage market and high-performance devices for creative professionals.

Current Leadership and the Future of Storage

In the last decade, Seagate has continued to lead the market with innovations such as the development of hard drives with shingled magnetic recording (SMR) and heat-assisted magnetic recording (HAMR), which allow for increased storage density. In 2021, the company introduced the world’s first hard disk drive with NVMe interface, marking a milestone in integrating high-performance technology into traditional storage devices.

Under the leadership of Dave Mosley, CEO since 2017, Seagate has continued to diversify into new storage technologies and cloud solutions. With the introduction of Lyve Cloud, a cloud-based storage service, the company has expanded its offerings for businesses seeking scalable and secure mass data storage solutions.

Conclusion

Over more than four decades, Seagate has been a key player in the data storage industry, revolutionizing the market with technological innovations and smart acquisition strategies. From its humble beginnings with the launch of the ST-506 to its current leadership in advanced storage technologies, Seagate has demonstrated a unique ability to adapt to market changes and maintain its position as one of the leading manufacturers of hard drives and storage solutions in the world. With a continued focus on innovation, the company is well-positioned to continue leading in a future dominated by exponential data growth.