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Follow the leader

Western Digital Corporation wants the world to know it’s not just a components manufacturer but a broad-based data technology company and industry leader. In this two-part interview with Nigel Edwards, Vice President EMEAI Sales, we find out how the company is rationalising its product offering and consolidating its distribution network to raise awareness of the Western Digital name

“Last year, 2.5 Exabytes of data were generated every day – over 800 Exabytes a year – and, through its products, Western Digital touches over 40% of all the Exabytes that are stored in the world.” So claims Nigel Edwards, Vice President EMEAI (Europe, Middle East, Africa and India) Sales, Western Digital Corporation (WDC).

This could come as a surprise to consumers who might unwittingly be using its products and to business customers who might think of Western Digital mainly as a components company supplying storage for OEM PCs and external devices.

In the last six years, WDC has significantly diversified its business, transitioning itself into a broad-reach data technology company through an ambitious buying spree that has seen it acquire well known storage companies like Sandisk, Hitachi Global Storage Technologies (HGST), Tegile, Virident Systems and Upthere, amongst others.

“We are now involved in everything from NAND components to full object storage multi-Petabyte server systems. That’s often unknown,” said Edwards.

As part of a programme to position WDC as an industry leader and to give the Western Digital brand greater prominence, the company is now unifying its disparate commercial and enterprise storage products under a single brand and rationalising its consumer offering.

“When we were individual companies, each one was successful and influential in its own right. But now, as a combined corporation, we have such a broad reach that we want to be seen as the industry leader we actually are, as a trusted business partner that our customers, partners and consumers can look to for leadership.”

What makes this initiative possible is the decision by the Ministry of Commerce of the People’s Republic of China (MOFCOM) finally to allow WDC to fully integrate HGST into its operations. For three years after the acquisition in March 2012, WDC had to keep the two organisations completely separate. These rules were relaxed in 2015, with the proviso that the two companies’ sales and pricing remained distinct. In November 2017, that restriction too was lifted.

Consumer and Enterprise
Today, WDC’s offering is split between Consumer Product brands, which you would expect to see on Amazon or in retail shops like PC World (e.g. Sandisk cards, the G Technology prosumer external HDD range, WD external HDD drives and Upthere cloud storage); and Commercial and Enterprise Product Brands, which will now all be sold under the Western Digital brand.

“Since last November we have been gradually transitioning all of the legacy HGST products – predominantly the enterprise products in HDD and Flash – over into the Western Digital brand. By the end of this calendar year (2018), HGST will have gone as a brand and all the products previously sold and advertised as HGST will be under the Western Digital Corporation banner,” explained Edwards.

Such is the breadth of WDC’s portfolio that there are bound to be a few anomalies, brand names that are too strong and well known to be sacrificed on the altar of corporate house-keeping.

Thus, in the enterprise space WDC has kept the UltraStar brand established by HGST and before them IBM, renaming it WD UltraStar. It has also retained the IntelliFlash brand acquired through its purchase of Tegile, modifying it to IntelliFlash, a Western Digital brand. In its retail offering, it will continue to promote Sandisk-branded products, while moving all commercial and enterprise Sandisk products under the Western Digital brand.

Streamlined distribution
Complementing the rationalisation of its product portfolio, Western Digital has streamlined its distribution network, reducing the number of distribution partners across the UK, EMEA and India from 160 to 70. In the UK, these include Ingram Micro, Tech Data, Exertis Hammer and Arrow.

This, says Edwards, was the sensible, logical thing to do. “With the coming together of all these companies, we could have ended up with 6 or 7 partners in one country, which everybody accepted wasn’t healthy. Everyone would have ended up fighting over things more directly; margins would have been squeezed. We did have to do some rationalisation.”

At the same time, WDC doesn’t want to lose partners, so those distributors that it no longer works with directly can still operate as fulfilment partners, transacting with the Western Digital sales teams in the usual manner and buying Western Digital products through one of the authorised distributors at normal distribution pricing.

“We just pay the distributor a fulfilment fee to flow that through to them. It means we don’t have to deal with 160 disties on a weekly or daily basis for shipping, payment terms and all that kind of stuff,” explained Edwards.

Rationalisation of the distribution network will also make it easier for WDC to educate channel partners about the breadth of its range and the growth opportunities that exist for resellers.

“In the past, a lot of our business flowed through the traditional strategic OEMs of HP, Dell, EMC, Lenovo. But now we touch so many areas of business and so many industries – the NAND Flash side is expanding into the internet of things; Flash is moving into everything; we are working heavily with the automotive industry with autonomous driving; Flash is going into microwaves and kettles – you wouldn’t believe the different areas we are engaged in compared to five or six years ago. That is giving us a huge amount of knowledge, a huge amount of insight into what is going on across the industry. We are trying to work with our network of distributors and channel partners to help them move into some of those areas as well.”

In part two of our interview with Nigel Edwards, to be published next month, we look at these opportunities in more detail.

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2018