Seagate 2013 Annual Report Download - page 8

Table of Contents
content, we expect the increased petabyte demand will require further build-out of datacenters by cloud service providers and other enterprises
which utilize 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.
Client Non-Compute. We define client non-compute applications as solutions designed for consumer electronic devices and disk drives
used for external storage and network-attached storage ("NAS"). Disk drives designed for consumer electronic devices are primarily used in
applications such as DVRs and surveillance systems that require a higher capacity, low cost-per-gigabyte storage solution. Disk drives for
external and NAS devices are designed for purposes such as personal data backup and portable external storage, and to augment storage capacity
in the consumer's current desktop, notebook, tablet or DVR disk drive capacities. Client non-compute applications also include devices designed
to display digital media in the home theater. We believe the proliferation and personal creation of media-rich digital content will continue to
create increasing consumer demand for higher capacity storage solutions.
Participants in the electronic data storage industry include:
Major subcomponent manufacturers. Companies that manufacture components or subcomponents used in electronic data storage devices
or solutions include companies that supply spindle motors, heads and media, application specific integrated circuits ("ASICs") and glass
substrates.
Hardware storage solutions manufacturers. Companies that transform components into storage products include disk drive
manufacturers and semiconductor storage manufacturers which include integrating flash memory into storage products such as SSDs.
System integrators. Companies that bundle and package storage solutions into client compute, client non-compute or enterprise
applications as well as enterprise storage solutions. Distributors that integrate storage hardware and software into end-user applications are also
included in this category.
Storage services. Companies that provide services and solutions related to the backup, archiving, recovery and discovery of electronic
data.
Demand for Electronic Data Storage
The continued advancement of cloud, mobile and open source computing are driving the growth of digital content. Factors contributing to
this growth are the increased:
• creation and sharing of all types of media-rich digital content, such as high-resolution photos, high definition video and movies,
and music by consumers and large amounts of electronic data by enterprises;
•
aggregation and distribution of digital content through services and other offerings such as Amazon, Facebook, GoPro, Instagram,
iTunes, LinkedIn, Netflix, Pandora and YouTube;
• consumption of digital content through smart phones, tablets, DVRs, and gaming consoles; and
• protection of digital content through storage on backup devices and externally provided storage services.
As a result of these factors, the nature and amount of content being created requires increasingly higher capacity storage in order to store,
manage, distribute, utilize and backup such content. This in turn has resulted in the rapid growth in demand for electronic data storage solutions
which we believe will continue to grow in developed countries as well as in emerging economies.
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