Seagate’s future now that colorful Bill Watkins is out of CEO job

First, a disclaimer. Seagate is the sponsor of my video show at FastCompanyTV. It has been my biggest partner in the journey I’ve been on for the past three years and it’s been very tough watching my friends there deal with some very tough business issues which ended this week in the ousting of Bill Watkins, CEO. Here’s the details on that from CNN Money.

Bill is always good for a fun quote and is one of the nicest guys I’ve met and dealt with in the tech business. He started as a surf bum and moved through the ranks at Seagate. It’s an American success story that looked like it would have a great ending. But not this time.

One thing I always loved was that Bill said outrageous things. This always made it difficult to find a seat next to him at dinners because press people would jockey to see if he’d say something quotable.

But the really outrageous thing he said that probably cost him, and lots of others at Seagate, their jobs is the lack of fire about SSD. Bill never had a very satisfactory answer about SSD and the market doesn’t like it when a storage company doesn’t have a good answer. That might have made Bill’s life tough anyway this year but the economic downturn turned up the heat too much on Seagate. Add into that Bill’s lack of fire about the coming economic downturn (in an interview last year he told me he wasn’t seeing any downturn) didn’t demonstrate authoritative leadership.

I really will miss Bill. He was my biggest supporter. He loved social media and gave me my break and not asked much in return. He, and his team, are a dream client. They don’t come along very often. It’s a bummer to me personally to watch Bill and the executives at Seagate (and other companies, cause most are going through the same tough times) have to negotiate very turbulent waters.

Here’s what Seagate needs to do to get out of its funk and be in a good position for when the economy repairs itself:

1. Have a good story about SSD. I know they are working on one, but they need to get there and fast. Lots of netbooks (the hottest things at CES) don’t have hard drives and are using SSD’s instead. Lots of enterprises are putting more and more of their data on SSD-based storage. Seagate needs to have a good answer to these trends and fast. Seagate already has world-class manufacturing experience, which we witnessed close up when we visited its hard drive factory in China. Now it needs to demonstrate it can build other things than just hard drives.

2. Seagate needs to be a bigger player in cloud-based services. Everytime I hear about Amazon S3 or Rackspace’s Cloud or Google’s App Engine I wonder why didn’t Seagate get into that business, especially since Seagate’s business is about storage of the world’s digital data (it’s hard to rip out beliefs that Seagate is a hard drive company). Why not do a partnership with one of these companies to get its brand out there? Most people don’t know that these companies use mostly Seagate drives (Rackspace told me they only use Seagates and when I was in a Google data center I only saw Seagate drives). Is there any way they can change that so that they can build a consistent brand across both enterprises and consumer devices? Every Seagate drive should come with a cloud partner built in. Imagine if your Seagate drive built an Amazon S3 service automatically and shared its stuff there?

3. Seagate should either bet the company on consumer stuff, or stay out. I like what it is doing with its HD media sharing device but not putting an HDMI connector on it ensured that Engadget and Gizmodo will not approve. I walked around with Best Buy’s strategy guys at the Consumer Electronics show and they want gadgets like that, but they are a lot like Engadget’s reviewers. No HDMI? It’s going to be tough to get past them. Seagate needs to do what Palm Pre did. Go all the way or don’t show up for the game. Also, Seagate should associate itself with all the cool companies that are making devices that use storage, like the new Pogoplug or the Drobo unit that takes multiple hard drives. My photography friends love those and if they came filled with Seagate drives it’d be a good thing all around.

4. They need to see the new trends faster. All my friends are building data center racks in their homes to store their bittorrented videos. Some already have 20 terabytes of drives. But Seagate’s latest USB drives, while very cool looking, quiet, and colorful, aren’t designed to be put into a nicely designed rack next to an HD screen. Hint: we don’t want to see tons of wires. We want to store them out of the way of our young kid’s prying fingers. But when I told them about the idea of a rackable set of USB drives they didn’t quite get why that’d be important. Go hang out with anyone who has a Canon 5D MKII and see how many hard drives they buy.

5. Continue to use social media to build relationships and demonstrate industry leadership. Here I think they are actually going in the right direction. They opened a friendfeed room for people to discuss Seagate’s stuff with them and for them to post what is most interesting for their customers. They sponsor my show, which gets them good coverage on Facebook, Twitter, Friendfeed, blogs, and all that. But they need to go further. They still haven’t quite figured out that they can use these services to actually design products and understand the market faster than their competitors. This will be very important to them as they move into the consumer space and work to diversify their product offerings.

6. But worst of all, they MUST regain the “biggest, cheapest, fastest and quietest” leadership in hard drives. Lots of my friends are buying Canon 5D MKIIs that chew through storage at a huge rate. But will these people buy Seagate drives or will they buy something else? Whoever has the biggest cheapest fastest and quietest drives will win their dollars. Seagate fell behind last year and, while they are leading again now, must make dramatic pushes forward.

7. Finally, Seagate needs to ask more of me for its investment in social media and my show. That exercise I’ll leave for the readers. What should Seagate do with bloggers, video bloggers, and people who hang out on social networks? If you were at Seagate what would you ask me to do in return for your marketing dollars?

Anything else that Seagate should do?

40 thoughts on “Seagate’s future now that colorful Bill Watkins is out of CEO job

  1. I would get them to talk about what happened with the recent firmware failures, how they fixed it and how they will keep it from happening again.

  2. I would get them to talk about what happened with the recent firmware failures, how they fixed it and how they will keep it from happening again.

  3. The major issues are internal to the company. The teams have been unable to execute as fast as WD. Management set the tone that no failure was tolerated and you will be order ranked on your team with the result that everyone played “prevent defense” and everyone played with incentives to beat your external competition along with incentives to beat your internal competition (it’s like playing doubles tennis where you have an extra incentive to beat your own tennis partner). Decisions were slow to be made and tilted to the risk adverse approaches. This culture leads to poor feedback loops (who wants a 2X4 in the side of the head for bringing up issues and challenging the assumptions?) and the weeding out people who challenged the system.
    All the scenarios you mentioned were looked 5 years ago but no one is willing to risk their careers on trying them out early. Especially with SSD as there was huge internal resistance to anything that didn’t spin. Still is resistance from the looks of it. Or they are just executing real slow again. It’s all in the culture- if Luczo focuses on that he might have a chance.

  4. The major issues are internal to the company. The teams have been unable to execute as fast as WD. Management set the tone that no failure was tolerated and you will be order ranked on your team with the result that everyone played “prevent defense” and everyone played with incentives to beat your external competition along with incentives to beat your internal competition (it’s like playing doubles tennis where you have an extra incentive to beat your own tennis partner). Decisions were slow to be made and tilted to the risk adverse approaches. This culture leads to poor feedback loops (who wants a 2X4 in the side of the head for bringing up issues and challenging the assumptions?) and the weeding out people who challenged the system.
    All the scenarios you mentioned were looked 5 years ago but no one is willing to risk their careers on trying them out early. Especially with SSD as there was huge internal resistance to anything that didn’t spin. Still is resistance from the looks of it. Or they are just executing real slow again. It’s all in the culture- if Luczo focuses on that he might have a chance.

  5. re #6, The hard drive industry has been a leapfrog game for 30 years. Churn is high, profit margins are low, and leadership never lasts long. Which is why The Innovator’s Dilemma called hard drives the “fruit flies” of tech companies.

    re:#7, They should ask you to shoot and post all video in 1080p h.264 (maybe in addition to lower res for the masses). That’s the new gold standard and making it ubiquitous will be a big job for the next few years. You’d be doing your readers a favor by testing the ecosystem for that as it develops. The camcorders and computers coming out this year can handle it easily, but posting and sharing it are not easy. Pretty soon you’ll be building your own storage rack. What will people watch it on? Alternately, do the same for 720p h.264 and upgrade to 1080p in a few years.

  6. re #6, The hard drive industry has been a leapfrog game for 30 years. Churn is high, profit margins are low, and leadership never lasts long. Which is why The Innovator’s Dilemma called hard drives the “fruit flies” of tech companies.

    re:#7, They should ask you to shoot and post all video in 1080p h.264 (maybe in addition to lower res for the masses). That’s the new gold standard and making it ubiquitous will be a big job for the next few years. You’d be doing your readers a favor by testing the ecosystem for that as it develops. The camcorders and computers coming out this year can handle it easily, but posting and sharing it are not easy. Pretty soon you’ll be building your own storage rack. What will people watch it on? Alternately, do the same for 720p h.264 and upgrade to 1080p in a few years.

  7. The 1.5TB launch was a hoot, test case in how not to handle a small Firestone like crisis.

    First deny, second deny, when confronted with evidence, deny still, then when storm too heavy, say “…looking into this and will get back”. Then acknowledge with “small number”, “firmware update in works”, stop whining you ungrateful little snits, just sit tight and wait. And use the standard boilerplate, “we do not support Linux” answer when big channel Red Hat render farm guys call up.

    Channel blows, Linux woes, consumer throes.

  8. The 1.5TB launch was a hoot, test case in how not to handle a small Firestone like crisis.

    First deny, second deny, when confronted with evidence, deny still, then when storm too heavy, say “…looking into this and will get back”. Then acknowledge with “small number”, “firmware update in works”, stop whining you ungrateful little snits, just sit tight and wait. And use the standard boilerplate, “we do not support Linux” answer when big channel Red Hat render farm guys call up.

    Channel blows, Linux woes, consumer throes.

  9. Great post, Robert! For home users, a $600 digital camcorder might be a more likely content creation device than a $2500 DSLR. For instance the Canon Vixia HF20 rather than 5D MKII.

    When you’re recording 1080p to an SSD in the camcorder, the only place you can dump that out is onto a big hard drive attached to your computer (or media server). There is no box of tapes in the closet. You need a terabyte for every 100 hours of video, with multiple backups.

    If your relatives all had a media server (Mac Mini?) under the TV, you could not only share HD videos easily, but also act as backup for one another. The cloud isn’t ready for 100 terabytes of 1080p per user just yet.

  10. Great post, Robert! For home users, a $600 digital camcorder might be a more likely content creation device than a $2500 DSLR. For instance the Canon Vixia HF20 rather than 5D MKII.

    When you’re recording 1080p to an SSD in the camcorder, the only place you can dump that out is onto a big hard drive attached to your computer (or media server). There is no box of tapes in the closet. You need a terabyte for every 100 hours of video, with multiple backups.

    If your relatives all had a media server (Mac Mini?) under the TV, you could not only share HD videos easily, but also act as backup for one another. The cloud isn’t ready for 100 terabytes of 1080p per user just yet.

  11. Seems like the merger between Maxtor and Seagate caused Seagate to loose focus. As a reseller of Seagate drives, I can tell you that their 1.5TB launch in October was a disaster. Multiple batches of bad firmware caused the drives to freezee making it impossible to access the data. Tom’s Hardware confirmed the details, even when Seagate’s tech support refused to acknowledge initially (ultimately they also confirmed the issue). And instead of recalling the drives from the channel, they let them out here leaving it in the hands of their partners and customers to sort out (ouch).

    This is disastrous for a company like Seagate (IMHO) who have always had a stellar reputation in the business market. Now there are rumors that the 1TB drives are also experiencing problems (although again nothing “officially” confirmed.

    Maybe Bill just left the scene of the crime – in time…

  12. Seems like the merger between Maxtor and Seagate caused Seagate to loose focus. As a reseller of Seagate drives, I can tell you that their 1.5TB launch in October was a disaster. Multiple batches of bad firmware caused the drives to freezee making it impossible to access the data. Tom’s Hardware confirmed the details, even when Seagate’s tech support refused to acknowledge initially (ultimately they also confirmed the issue). And instead of recalling the drives from the channel, they let them out here leaving it in the hands of their partners and customers to sort out (ouch).

    This is disastrous for a company like Seagate (IMHO) who have always had a stellar reputation in the business market. Now there are rumors that the 1TB drives are also experiencing problems (although again nothing “officially” confirmed.

    Maybe Bill just left the scene of the crime – in time…

  13. Watkins, been more Western Digital’s CEO than Seagate’s, every move he made jumped WD up. But given the Scoble Curse, all but guaranteed. Of course his arrogance, and haughty spirit and economic blindness, sure helped too.

    SSD story they kept sending mixed messages on, yes future, but no hard drives aren’t dying, yes, no, yes no. String of high failure rates soured Enterprise, the aura of invincibility lost. And the Linux flap, lost them ground there. Consumer they were too little, too late, and the WD Passports were hecko cheap and sexy. People do differentiate, and Seagate was always more expensive, ugly and in short supply. And the Theater product is a future trainwreck, when WD cheaper and shipping with HDMI, 1080p/24. Worse for more, later — Seagate’s slogan. And all the Social Media did them squat, and I would argue, backfired wholesale, blabbermouth bloggers make a good deal more enemies than they realize, CIOs in particular. Wasn’t all that social media exactly supposed to enable seeing trends faster? Another backfire.

    But most of the failings came in execution, they had all the right ingredients, just didn’t make it to market, on time, at the right price with the same quality reputation of before. Epic fail.

  14. Watkins, been more Western Digital’s CEO than Seagate’s, every move he made jumped WD up. But given the Scoble Curse, all but guaranteed. Of course his arrogance, and haughty spirit and economic blindness, sure helped too.

    SSD story they kept sending mixed messages on, yes future, but no hard drives aren’t dying, yes, no, yes no. String of high failure rates soured Enterprise, the aura of invincibility lost. And the Linux flap, lost them ground there. Consumer they were too little, too late, and the WD Passports were hecko cheap and sexy. People do differentiate, and Seagate was always more expensive, ugly and in short supply. And the Theater product is a future trainwreck, when WD cheaper and shipping with HDMI, 1080p/24. Worse for more, later — Seagate’s slogan. And all the Social Media did them squat, and I would argue, backfired wholesale, blabbermouth bloggers make a good deal more enemies than they realize, CIOs in particular. Wasn’t all that social media exactly supposed to enable seeing trends faster? Another backfire.

    But most of the failings came in execution, they had all the right ingredients, just didn’t make it to market, on time, at the right price with the same quality reputation of before. Epic fail.

  15. I love Seagate.

    What do I know from HDDs? Not a whole lot. All I know is that Maxtors and WDs have failed on me, and I will never buy anything but a Seagate from now on.

    To me, the key is that they are affordable — I would go so far as to pay a 5% premium, which seems to be the trend for their drives on Newegg — and fast. To my eye, they seem to be keeping up in terms of size and speed, and while I’m interested in SSD integration (e.g. hybrid drives), and full SSD drives, the most important thing to me right now is that they stay just a couple steps ahead of the competition, which they look to be doing.

    If I could make one suggestion to them, it would be that they get the word out about all the good will they have behind them. I shy away from saying something like Canon’s or Apple’s showcasing of proffessionals who use their product, but there must be some way of telling people that the best in any business trust Seagate.
    Beyond that, I agree totally with the points you’ve brought up, Robert. Good show!

  16. I love Seagate.

    What do I know from HDDs? Not a whole lot. All I know is that Maxtors and WDs have failed on me, and I will never buy anything but a Seagate from now on.

    To me, the key is that they are affordable — I would go so far as to pay a 5% premium, which seems to be the trend for their drives on Newegg — and fast. To my eye, they seem to be keeping up in terms of size and speed, and while I’m interested in SSD integration (e.g. hybrid drives), and full SSD drives, the most important thing to me right now is that they stay just a couple steps ahead of the competition, which they look to be doing.

    If I could make one suggestion to them, it would be that they get the word out about all the good will they have behind them. I shy away from saying something like Canon’s or Apple’s showcasing of proffessionals who use their product, but there must be some way of telling people that the best in any business trust Seagate.
    Beyond that, I agree totally with the points you’ve brought up, Robert. Good show!

  17. I’ve always been pro Seagate (out of good experience in the past and as I prefer reliability over bleeding edge), but my faith in their product quality and customer service is somehow shattered: Drives from their 7200.11 product range seem to encounter excessive failure rates: http://tr.im/73pv and http://tr.im/73xs Next time I have to reboot I will certainly hold my breath…

    Irrespective of which customer or product segment you focus on, you should strive to maintain your customer base. And this requires providing both a sufficient level of product quality and appropriate customer service in case of problems. Both areas need to be addressed by Seagate.

  18. I’ve always been pro Seagate (out of good experience in the past and as I prefer reliability over bleeding edge), but my faith in their product quality and customer service is somehow shattered: Drives from their 7200.11 product range seem to encounter excessive failure rates: http://tr.im/73pv and http://tr.im/73xs Next time I have to reboot I will certainly hold my breath…

    Irrespective of which customer or product segment you focus on, you should strive to maintain your customer base. And this requires providing both a sufficient level of product quality and appropriate customer service in case of problems. Both areas need to be addressed by Seagate.

  19. Seagate needs to OWN the whole storage ecosystem.

    Not just PogoPlug or Drobo (although they should be into those as well) but complete storage solutions across the board.

    My Maxtor One Touch III external USB drive failed. Completely. Seagate’s response was along the lines of don’t store your data in just one place.

    As the saying goes, it isn’t IF your HD is going to fail, it is WHEN.

    Seagate should have an offsite backup solution like EMC’s Mozy or Rackspace’s JungleDisk so I have protection.

    Their external drives are just large disks allowing transport. They are not a backup SOLUTION.

    Give me great quiet low power HD and/or SSD, along with methods to easily migrate data between systems (FreeAgent, PogoPlug, Drobo) and a on/off site backup solution (Mozy, JungleDisk)

    To quote the LAPD motto.. they need to “Protect and Serve” my data.

  20. Seagate needs to OWN the whole storage ecosystem.

    Not just PogoPlug or Drobo (although they should be into those as well) but complete storage solutions across the board.

    My Maxtor One Touch III external USB drive failed. Completely. Seagate’s response was along the lines of don’t store your data in just one place.

    As the saying goes, it isn’t IF your HD is going to fail, it is WHEN.

    Seagate should have an offsite backup solution like EMC’s Mozy or Rackspace’s JungleDisk so I have protection.

    Their external drives are just large disks allowing transport. They are not a backup SOLUTION.

    Give me great quiet low power HD and/or SSD, along with methods to easily migrate data between systems (FreeAgent, PogoPlug, Drobo) and a on/off site backup solution (Mozy, JungleDisk)

    To quote the LAPD motto.. they need to “Protect and Serve” my data.

  21. I never really thought much about drives until I watched some of your videos with the Seagate people, including Bill Watkins. Your conversations “humanized” the company and I have bought nothing but Seagate drives since, including 4 that are sitting in my Drobo (which I first saw a year and a half ago when you did a video with them). I’ve never had a problem with a Seagate drive.

    But I agree with Brett, nobody thinks about the brand of their hard drive. It’s like nobody cares what T.V. network they’re watching or which movie studio made a certain film, they just watch the show.

    Seagate needs to keep letting employees tell their story and allowing bloggers like you, Robert, into their cool factories so we can see how drives are made! They should definitely keep sponsoring Scobleizer! I’ve purchased eight Seagate drives because if it.

  22. I never really thought much about drives until I watched some of your videos with the Seagate people, including Bill Watkins. Your conversations “humanized” the company and I have bought nothing but Seagate drives since, including 4 that are sitting in my Drobo (which I first saw a year and a half ago when you did a video with them). I’ve never had a problem with a Seagate drive.

    But I agree with Brett, nobody thinks about the brand of their hard drive. It’s like nobody cares what T.V. network they’re watching or which movie studio made a certain film, they just watch the show.

    Seagate needs to keep letting employees tell their story and allowing bloggers like you, Robert, into their cool factories so we can see how drives are made! They should definitely keep sponsoring Scobleizer! I’ve purchased eight Seagate drives because if it.

  23. My friends don’t differentiate between Samsung, Seagate or WD drives. They go to NewEgg and see what’s on sale at the time. Drives are commodities. Maybe they spend a little more an external USB drive that looks cool but I’ve replaced the one I used to carry around with a 16 GB thumb drive. Seagate needs to figure out a way to differentiate their products. Just because some blogger uses their products isn’t a reason for me to buy them unless he can show me why I should.

    You should tell us how you use your Seagate products. Maybe you do and I missed it. :-)

  24. My friends don’t differentiate between Samsung, Seagate or WD drives. They go to NewEgg and see what’s on sale at the time. Drives are commodities. Maybe they spend a little more an external USB drive that looks cool but I’ve replaced the one I used to carry around with a 16 GB thumb drive. Seagate needs to figure out a way to differentiate their products. Just because some blogger uses their products isn’t a reason for me to buy them unless he can show me why I should.

    You should tell us how you use your Seagate products. Maybe you do and I missed it. :-)

  25. I’d agree that the real key to the hard drive future is mass storage of multi-media. In particular it’s in the home, next to the TV where you want to stream family photos and videos. Just making drives for the “PC” market is not enough.

  26. I’d agree that the real key to the hard drive future is mass storage of multi-media. In particular it’s in the home, next to the TV where you want to stream family photos and videos. Just making drives for the “PC” market is not enough.

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