Western Digital Boosts SMB Portfolio - Analyst Blog

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Hard disk drive (HDD) manufacturer Western Digital Corp. ( WDC ) or WD introduced a new range of network backup appliances, targeting its small and medium business (SMB) customer base. The all new WD Arkeia backup appliances are available in four models namely RA4300, RA4300T, RA5300, and RA6300. WD acquired Arkeia Software Inc. in Jan 2013 for an undisclosed sum in order to boost its SMB product portfolio.

The appliances offer greater internal disk space, faster processing speed, improved memory, and integrated solid state drives (SSDs), which are aimed at reducing backup time and accelerating the data recovery process. Apart from this, customers will have access to WD Arkeia v10.1 software as a bundled offer, which will allow users to support hybrid cloud backups.

The WD Arkeia appliances will be available immediately at a starting price of $9,900. The appliances will come with hardware warranty, technical support accessibility and free software update for one year.

Western Digital's growing exposure into the SMB space is encouraging. The company has expanded its SMB product suite over time to meet the growing demand. Increasing IT spending by the SMBs is a good sign and the company is well-positioned to capitalize on the opportunity.

Apart from SMBs, WD is well poised to take a giant's share of the high margin enterprise drives market. It intends to shift focus toward high margin enterprise drives to offset slower PC demand. Last month, the company announced the shipment of WD Blue, a 2.5 inch 7 mm HDD with 1 TB (Tera byte) capacity. WD Blue is for slimmer and lighter notebooks and can also be used in standard notebooks with 9.5 mm drive slots. Prior to this, WD also introduced WD Se (an enterprise class drive for data centers) and Travelstar 5K1500 (for notebooks, external drives, gaming consoles and all-in-one PCs).

Western Digital has limited exposure to high-end corporate desktop and enterprise server markets compared to its rival Seagate Technology plc ( STX ). But we believe that with the introduction of WD Black (SSHD) in association with SanDisk Corp. and the newly-introduced drives, Western Digital will be able to grow its market share in the enterprise space.

Currently, Western Digital has a Zacks Rank #3 (Hold). Investors should also consider technology stocks such as NetApp Inc. ( NTAP ) and EMC Corp. ( EMC ), which carry a Zacks Rank #2 (Buy) and are worth buying.



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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: EMC , NTAP , SMB , STX , WDC

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