Seagate 2012 Annual Report Download - page 7

Table of Contents
PART I
ITEM 1. BUSINESS
We are a leading provider of electronic data storage products. Our principal products are hard disk drives, commonly referred to as disk
drives, hard drives or HDDs. Hard disk drives are devices that store digitally encoded data on rapidly rotating disks with magnetic surfaces. Disk
drives continue to be the primary medium of mass data storage due to their performance attributes, high quality and cost effectiveness.
We produce a broad range of electronic data storage products including HDDs, solid state hybrid drives (SSHD) and solid state drives
(SSD), which address enterprise applications, where our products are designed for enterprise servers, mainframes and workstations; client
compute applications, where our products are designed for desktop and notebook computers; and client non-compute applications, where our
products are designed for a wide variety of end user devices such as digital video recorders (DVRs), gaming consoles, personal data backup
systems, portable external storage systems and digital media systems. In addition to manufacturing and selling data storage products, we provide
data storage services for small to medium-sized businesses, including online backup, data protection and recovery solutions.
Industry Overview
Electronic Data Storage Industry
The electronic data storage industry is comprised of companies that manufacture components or subcomponents designed for electronic
data storage devices and companies that provide storage solutions through a variety of technologies such as disk drives, semiconductor-based
storage technologies such as SSD storage applications and software and services for cloud growth, big data and on-premise and mobility
platforms.
Markets
The principal markets served by the electronic data storage industry are:
Enterprise Storage. We define enterprise storage as those solutions which are designed for mission critical and nearline applications.
Mission critical applications are defined as those that are vital to the operation of enterprises, requiring high performance and high
reliability solutions. We expect the market for mission critical enterprise storage solutions to continue to be driven by enterprises moving
network traffic to dedicated storage area networks in an effort to reduce network complexity and increase energy savings. We believe that this
transition will lead to an increased demand for more energy efficient, smaller form factor solutions. These solutions are comprised principally of
high performance enterprise class disk drives with sophisticated firmware and communications technologies.
Nearline applications are defined as those which require high capacity and energy efficient solutions featuring low costs per gigabyte. We
expect such applications, which include storage for cloud computing, content delivery and backup services, will continue to grow and drive
demand for solutions designed with these attributes. With the increased consumption of media rich content streamed from the cloud, we expect
increased petabyte demand for high capacity nearline devices.
Client Compute. We define client compute applications as solutions designed for desktop and mobile compute applications. We believe
that the demand resulting from growing economies of certain countries and the continued proliferation of digital content will continue to drive
demand for the client compute market. As the storage of digital content in the cloud becomes more prominent, some client compute applications
require less built-in storage, and therefore alternative storage solutions are becoming more prevalent within the client compute market.
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