Western Digital Corporation
) launched My Cloud, a personal cloud storage drive, earlier this
quarter to expand its Network Attached Storage (NAS) offerings
beyond enterprises to individual customers. My Cloud, a backup and
unified storage solution for a single user or for a family to store
data "in house", is accessible across all devices including
laptops, personal computers, tablets and smartphones across
platforms such as Android, iOS and Windows. Additionally, the
company expanded My Cloud brand to include a high performance
four-bay cloud storage system, targeting professionals and small
work-groups that require massive amounts of digital data.
Over the last few years the number of PC and laptop units
shipped have steadily declined, largely due to an increased
dependence on cloud storage as well as competition from tablets.
The personal cloud platform provides a perfect opportunity for
storage companies to increase spending from the consumer side.
Additionally, the cloud storage segment of storage companies is no
longer restricted to enterprise storage solutions. We have an
$80 price estimate for the Western Digital
which is slightly below the market price. The personal cloud should
help the company increase sales in the consumer section by helping
users transition from regular hard drives to the personal cloud,
but may not provide a significant upside to our estimate.
See our full analysis on WDC here
Personal Cloud is a relatively new concept in the world of
storage as it offers consumers a choice to access data saved at a
common place, from all personal devices such as laptops, tablets
and smartphones. This is different from regular cloud storage since
the stored data drive is present "in-house" or physically present
with the user.
Compared to publicly available cloud storage options such as
Dropbox and Skydrive, the personal cloud offers a significantly
greater storage space to users. Unlike Dropbox and Skydrive which
have paid subscriptions beyond a few gigabytes (
) of storage and limitations on the size of data files to be
stored, there are no storage charges or limitations on data usage
for the personal cloud. In a lot of cases, users end up making
multiple accounts on Dropbox to get as much free space as possible,
but all their data cannot be synced or accessed all at once.
Additionally, the restriction on the size of files (300 MB in case
of Dropbox) in free accounts makes it nearly impossible to store a
lot of media files such as movies or videos. Furthermore, when the
personal cloud storage is accessed on the same network where it is
physically present, it uses intranet, which is generally much
faster than accessing data via the internet. The personal cloud is
a one-time investment that provides a unified backup for all the
data that a single user or a family might require. It is available
in capacities of 2-4 terabytes (1 terabyte = 1000 gigabytes).
There has also been skepticism by the general public about
stored data on public clouds. This came into greater perspective
with the revelations made by former NSA contractor Edward Snowden
about the NSA monitoring public data. The personal cloud is likely
to make users feel more secure about their data, and storage
companies intend to capitalize on that sentiment.
Western Digital's My Cloud
With an aim to provide ease of use to end users and cut down
storage costs, Western Digital launched its My Cloud drives earlier
this quarter. Buying a 2-4 terabyte (TB) drive accessible from
multiple devices for $150-$210 is significantly cheaper than paying
$40 per month to Dropbox for 500 GB of storage. However WDC's My
Cloud has been preceded by Seagate's (
) Central and Toshiba's Canvio Personal Cloud drive, with Lenovo's
Beacon Cloud Storage now following suit. Given the competition in
this segment already, prices of the personal cloud should stay
The personal cloud is a logical alternative to fast declining
external hard drives. The gains in revenues from personal cloud are
likely to be at the expense of regular external and internal hard
drives as well as solid state drives for PC and laptops. However,
My Cloud could give a stiff competition to the Seagate's wireless
drives, which are in concept similar to the personal cloud.
Wireless drives provide a unified storage and backup option for
users just like the personal cloud but are only accessible over the
same network and cannot be accessed devices via the internet.
Seagate has invested in wireless drives as well as Seagate
Central, the personal cloud. The higher flexibility offered by the
personal cloud should cut down demand of Seagate's 1TB wireless
drives. Read more on how SanDisk's portable wireless storage with
low storage capabilities is a better option for smartphones and
tablets. Like SanDisk's (
) wireless storage solutions, the personal cloud could also reduce
the number of users paying a premium of about $100 for a memory
expansion of 32/64 GB on tablets or smartphones.
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