September 25, 2019

Disks vendors made similar mistakes

The recent Western Digital exit of the enterprise storage segment with the sale of its Tegile business to DDN confirms again management mistakes and by the way, the opportunism of the buyer to build rapidly an attractive portfolio, good for them.

We saw this kind of mistake, I mean here the WD one, so many times even if we understand taking risk belongs to the game but... as often, the root cause is people coming from outside of the segment but high in the orgchart with the power to decide... When it's a small move for a big company, it is presented as a detail and could be digested without any big impact except non productive investment, if it's a small company and management made such mistake, it can put the company into a fragile position and guess what, these people will leave the company but its situation is still under potential troubles. So many examples of that in our industry... and we see these people continuing doing "such bad decisions".

WD has thought that it would have been possible to offer platforms and systems and it turns out that the reality is finally different. A few years after Seagate, WD experiences similar disappointments but it was anticipated, no doubt, the opposite would have been a surprise. On the other hand, we understand the strategic necessity for WD to extend their product line suffering from competition from the other side of the world. At the end it's a question of product, knowledge, role and business practices.

An other question is linked to the product itself, is it a good enough one? at least DDN made again a good deal following Intel Lustre business, Tintri and Nexenta. DDN is building a serious offering targeting the enterprise storage segment. As an investor in Tegile, same for Amplidata, WD acquired the company to "save" it, finally avoiding a bankruptcy and find a exit eventually. Wow what a path...

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