Western Digital gains foothold in cloud with $19 billion SanDisk acquisition
Western Digital needs access to SanDisk's NAND technology to better compete in the market for solid-state drives used in cloud computing, data centres, smartphones and laptops.
Hard-disk drive maker Western Digital is buying SanDisk for about $19 billion. The deal is expected to increase Western Digital's ability to make flash memory storage chips used in smartphones and tablets.
Western Digital needs access to SanDisk's NAND technology to better compete in the market for solid-state drives used in cloud computing, data centres, smartphones and laptops. With this, Western Digital said it will double its addressable market and expand its participation in higher-growth segments.
"The combined company will be ideally positioned to capture the growth opportunities created by the rapidly evolving storage industry," said Steve Milligan, chief executive officer, Western Digital.
Both companies have strong R&D and engineering capabilities and over 15,000 combined patents issued or pending worldwide.
Toshiba has been a long-term strategic partner to SanDisk for 15 years. The joint venture (JV) with Toshiba will be ongoing. The JV provides stable NAND supply at scale through a time-tested business model and extends across NVM technologies such as 3D NAND.
SanDisk was co-founded in 1988 by Eli Harari, Sanjay Mehrotra, and Jack Yuan. On December 31, 2010, Harari retired as chairman and chief executive officer of the company, and was succeeded by Mehrotra as the company's president and CEO.
Steve Milligan will continue to serve as chief executive officer of the combined company, and the company will remain headquartered in Irvine, California. Upon closing, Sanjay Mehrotra is expected to join the Western Digital Board of Directors.
The announcement comes at a time when the tech industry is evolving rapidly as companies look for ways to embrace trends such as cloud and the Internet of Things.
"The NAND industry is at an infection point as it transitions from planar to 3D technology and access to that technology was a key piece of the deal," Jeff Janukowicz, research vice president at IDC, said to Computerworld. "Now, WD is positioned to address a much larger footprint in the storage industry."
Earlier this year, SanDisk's senior director-global customer support Urvashi Sheth, in an exclusive interview with Firstpost, shared about the company's customer support strategy for the Indian market, and how she sees providing customer support in the age of social and instant messaging as an opportunity and not challenge. With this acquisition, it would be interesting to see the changes done in Sandisk's India strategy.
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