Seagate dives into solid state drive market

SAN FRANCISCO, USA: Seagate Technology, the world's No. 1 producer of disc drives, unveiled its first solid state drive on Monday, getting into a nascent but potentially lucrative market a step behind rivals such as Stec Inc.

Seagate's offering - called the Pulsar - is for use in data centers, where thousands of servers act in concert to power systems for companies and agencies from Google Inc and Amazon.Com Inc to the Pentagon.

Seagate, whose new solid state drive (SSD) has up to 200 gigabytes of capacity, is entering a market where others already have a toehold.

"Seagate is late to the game, but it's not like the game is over," said Joseph Unsworth, an analyst with Gartner who was pre-briefed on the product release.

Many industry experts view solid-state drives as the future of the industry. They are faster and, unlike traditional hard drives, have no moving parts and are thus more rugged. Analysts say their prices should come down as the technology improves.

A Seagate vice president, Dave Reinsel, said the company's established relationships with global storage enterprises and computer makers will give it a leg up in the market.

He said Seagate is "in a unique position to fortify its leading enterprise storage position with its entry into the enterprise solid state storage market."

The company began shipping Pulsar SSDs to a handful of computer makers in September. SSDs, which store data on NAND flash memory chips, are considered cooler, more energy efficient and more reliable than hard drives, but are also a lot more expensive.

For now, SSDs are used where access time is critical enough to justify the high cost, such as in financial transactions, and are expected to be adopted rapidly by corporations in coming years.

Gartner says this year 280,000 units will be sold for $450 million. It projects 2010 sales of 800,000 units for nearly $1 billion, and 2013 sales of 5.3 million units for $1.9 billion.

That's still a sliver of the traditional drives market, which research firm IDC estimated at $33 billion last year.

How they stack up

Seagate will be going up against offerings from the likes of Stec and privately held Fusion-io.

Fusion-io recently made major sales to two U.S. government agencies and is used in blade servers made by Hewlett-Packard Co and Dell Inc. Its products have been successfully tested for use in IBM Corp servers.

Fusion-io SSDs, with capacities up to 640 gigabytes now and 2.5 terabytes early next year, are built on cards that slide into empty slots on servers. No one gives prices officially, but typically such cards cost in the low thousands of dollars.

Stec's offerings - like those of Seagate - are built in boxes that look like traditional disc drives, offering a 400-gigabyte and an 800-gigabyte version. They have such major customers as EMC Corp.

Others already in or entering the market include Samsung Group, Toshiba and Intel Corp. Seagate's arch-foe, Western Digital, makes SSDs, but not for enterprises.