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?