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Silicon Valley Rumblings – Will HP Buy Seagate? May 30, 2008

Posted by John in Technology.
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HP has been on the move lately. Expanding on the services business by buying EDS. What should HP do next? Buy Seagate?

Seagate (NYSE: STX) would give HP access to a major cloud position with storage in the cloud. Seagate known for their OEM drive business and enterprise storage recently launched a consumer business over 1 year ago. Why this might be interesting for HP and Seagate – HP has been a big customer for years of Seagate but HP could gain a foothold in the ‘cloud computing’ sector with Seagate. Seagate’s consumer line would certainly get a ‘shot in the arm’ from HP’s massive consumer presence.

Although this isn’t a full fledged rumor, it certainly is a conversation around Silicon Valley according to sources. I will dig into this more but I would buy the consumer brand and cloud services from Seagate and leave the OEM business alone. Seagate’s market cap is currently $10 billion as of today.

Comments»

1. Gerry Corbett - May 30, 2008

I doubt HP would buy Seagate. HP has several relationships with Hitachi in enterprise storage, OEM PCs in Japan, hard drives, UNIX servers, etc.

2. John Furrier - May 30, 2008

Gerry,
HP needs to get a position with storage in the web services market especially since users (consumers) will be moving to cloud services. I agree the OEM business wouldn’t be interesting to HP since sourcing product from one source wouldn’t make sense, but there is some interesting consumer angles for HP and Seagate to partner on (from a user and business perspective).

I love HP products but they are commodity – if HP offered a service in the cloud I’m interested (I already own their products).

3. Gerry Corbett - May 30, 2008

John:

Interesting perspective. I do not totally disagree as I own a bunch of HP product as well. But I think it will take some time to absorb EDS, which has a very different culture than HP. What do you think?

4. David - May 31, 2008

I keep hearing this culture difference between EDS and HP. “The HP Way” doesn’t exist any more. I haven’t heard the phrase mentioned as a practice in at last 3 years. Culture is not going to be the reason that it takes so long to integrate. Sheer size is.

5. Robert Scoble - June 3, 2008

Seagate says: “no.” I’m sitting with a bunch of Seagate executives.

6. John Furrier - June 3, 2008

Robert I see you’re at ATT Park with Seagate cool. Say hi for me.

Whiich execs are there at the game. If Bill Watkins is there break out your qik camera and have him address this. It’s not a rumor yet but i’m hearing rumblings – i’m trying to get some confirmation on some sources.

Have Seagate do a Qik video while your at the ATTPark

thanks


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