Seagate Launches Hybrid Backup Solutions for Small Firms - Analyst Blog

Hard disk manufacturer Seagate Technology Public Limited CompanySTX has broken ground in data protection for small businesses, by launching new Hybrid Cloud Data Protection solutions.

A hybrid cloud comprises two or more clouds (private, community, or public) that can be used both locally and off-site and offers the benefit of multiple operation models to its users.

The latest hybrid cloud solutions consist of Seagate Backup and Recovery Software, Seagate Cloud Backup and Recovery Services, Seagate Backup and Recovery Private Cloud, and Seagate Data Management Services. These products promise total security with regard to information storage, ruling out the possibilities of data loss or breach.


The hybrid cloud solutions provide centrally-managed local and cloud data backup to small business clients. It is a cost-effective, easy-to-install solution designed to protect a company's data.

Seagate's Backup and Recovery Software and Cloud Backup and Recovery Services protect businesses against data loss and minimize downtime by automatically copying all stored data to the cloud. These products provide about 400% performance enhancement when it comes to the speed of backup and restoration as compared to the previous generation products.

With on-site data recovery and automatic cloud integration, the cloud solutions offer enterprise-grade protection to clients' business-critical data at reasonable charges. With its latest product launch, Seagate continues to demonstrate its commitment to the channel partners and client base by offering improved data protection and recovery solutions.

Seagate's hybrid cloud solutions will help customers to assess the level of vulnerability, detect threats and mitigate intellectual property theft. Through this launch, Seagate intends to attract a significant number of new customers.

Growth Prospects

The cloud computing market, according to Gartner, will grow at a CAGR of 62% to $160 billion from 2012 to 2015. We believe that the rapid adoption of Seagate's Hybrid Cloud Solution will help it to pursue opportunities in the ever-growing cloud computing segment.

With cloud-based solutions expanding rapidly, the demand for data storage capacity for backup and recovery of data is also increasing. The need for a secure environment has also escalated with the move to cloud computing, mobile adoption by companies and the increasing incidence of targeted attacks.

Last Word

We believe that Seagate's new hybrid products will benefit from pent up demand in the storage market.

Of late, Seagate has been expanding its presence in the SSD storage market due to sluggish demand in the PC market (which primarily relies on HDD). It is the second largest manufacturer of HDDs in the U.S. with a 40% share. Therefore, the cannibalization of PCs by mobile devices will continue to affect Seagate's results.

According to the preliminary data released by Gartner, PC shipments in the second quarter fell 9.5% year over year to 68.4 million units, marking the worst slump since third-quarter 2013. The research firm highlighted three main reasons - a strong dollar, phase out of Windows XP refresh or upgrade cycle, and launch of Windows 10 - behind the decline. The declining second quarter of 2015 PC numbers indicate protracted weakness in PC HDDs as well, which negatively impact Seagate's financial position.

To deal with the situation, the company is focusing on the enterprise side, where it could acquire higher-margin businesses. Synergies from these acquisitions and product innovations are its paths to success in this segment. We believe that this will boost margins and reduce Seagate's dependence on the PC market.

However, sluggish macroeconomic conditions, a flattish price environment and competition from Western Digital Corp. WDC remain the near-term headwinds.

Currently, Seagate carries a Zacks Rank #5 (Strong Sell). Broadcom Corp. BRCM and Cirrus Logic Inc. CRUS are the better-ranked technology stocks sporting a Zacks Rank #1 (Strong Buy).

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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 Nasdaq, Inc.

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

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