Seagate (STX) Strengthens Exos X Portfolio With New 18 TB HDD
Seagate Technology STX recently extended its Exos X Series of enterprise drives with 18TB storage capacity helium-based HDD (Hard Disk Drive). The company also introduced a new controller for AP 4U100 systems and Exos AP (Application platform) 2U12.
Apart from supporting Network Attached Storage (NAS) architecture, Exos X18 HDD will support datacenter and hyperscale systems to help customers manage complex data workloads seamlessly.
The new product launches will enhance Seagate’s existing product portfolio and help it fortify foothold in the storage market against Western Digital WDC.
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Robust Features to Boost Adoption
Exos X18 is the fifth generation of the helium-based enterprise drives that boast of 7200 RPM (revolutions per minute) spindle speed as well as maximum sustained transfer rate of 270 MB/s for 18TB storage drive.
Exos X18 has an advanced random read/write 4K QD16 WCD (or Write Cache Disabled) (IOPS or Input/Output Operations per Second) of 170/550 performance. In fact, it has a MTBF (mean time between failures) of 2.5M hours with a multi-segmented cache of 256 MB.
Moreover, with Exos X16 customers can utilize the company’s data protection services like Seagate Secure technology. The new Exos HDD is priced at $561.75 and comes with a five-year warranty. Moreover, with the launch of new AP 2U12, the Exos portfolio will benefit from easier deployment and higher data transfer speed.
Seagate believes that the expanded capacity will improve demand for the HDDs among large enterprises, small and medium size businesses (SMBs) and creative professionals, which is expected to bolster adoption, in the days ahead.
Rapidly Growing Data Center and Cloud Market Holds Promise
Seagate is investing heavily to deliver high-capacity storage devices that will support expansion of cloud infrastructure and meet the growing need of data centers.
The data center business is booming owing to growth in adoption of cloud-based solutions and 5G network deployment. Also, the exponential growth in digital data boosted the demand for data centers.
Coronavirus crisis triggered work from home, stay at home and online learning trend has led to a massive increase in data creation as well as need for advanced storage solutions.
Per Gartner data, global spending on public cloud services is envisioned to hit $364.1 billion in 2022, up 50% over 2019 while the global data center market is projected to witness a CAGR of 16% between 2020 and 2024, per a Technavio Report.
Market research firm IDC forecasts the global datasphere will witness a CAGR of 26% between 2020 and 2024. Further, the research firm projects global datasphere to reach 175 ZB (zettabytes) by 2025.
Per Market Research Engine report, global HDD market is projected to reach $37 billion in 2025 at a CAGR of 6.7% between 2020 and 2025.
Apart from HDD, exponential growth in digital data and increasing penetration of high-end cloud platforms will also boost SSD (solid state drive) demand. Notably, SSDs are increasingly being leveraged by data centers, owing to the reduction in latency, which facilitates faster response to real-time applications.
Per a Global Market Insights report, the SSD market is anticipated to witness a CAGR of 15% during 2020-2026.
Considering encouraging growth prospects, the company’s expansion into the HDD and SSD storage market with new product launches bodes well for its top line in the upcoming quarters.
Persistent Challenges
Supply-chain disruptions and lockdowns stemming from the coronavirus outbreak are likely to affect the end-market demand for Seagate, at least in the near term. Moreover, management expects higher COVID-19-related costs to be a headwind.
Further, increasing expenses on product enhancements are likely to put pressure on the bottom line.
Zacks Rank and Key Picks
At present, Seagate carries a Zacks Rank #3 (Hold).
Some other better-ranked stocks worth considering in the broader sector is Zoom Video Communications ZM and Blackbaud BLKB, both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long-term earnings growth rate for Zoom Video and Blackbaud is currently pegged at 25% and 7.6%, respectively.
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