Key Takeaway

•  Western Digital Corporation is a public company founded by Jacob Braun in 1970 with headquarters in San Jose, California. The company develops, produces, and promotes data storage products and solutions in the US and other markets across the world.

• The total number of employees at Western Digital is 65,600, of which 54,200 function in the manufacturing and engineering sectors (Asia Pacific), 8,000 work in the engineering, manufacturing, R&D, shared services, sales, and marketing (the Americas), and 3,400 work in sales, marketing, R&D, and engineering (EMEA, Israel, and India).

• Western Digital owns 6,303 registered patents, the majority of which fall within the "information storage" space.

• The company also has 167 trademark registrations, with "scientific and electric apparatus and instruments" being the most prevalent class.

Introduction

Findings

Company Overview

•  Western Digital Corporation is a public company founded by Jacob Braun in 1970 with headquarters in San Jose, California. The company develops, produces, and promotes data storage products and solutions in the US and other markets across the world.
• The company is headquartered at 5601 Great Oaks Parkway, San Jose, CA 95119, United States.
• Western Digital operates in the technology sector of the computer hardware industry.
• The total number of employees at Western Digital is 65,600, of which 54,200 function in the manufacturing and engineering sectors (Asia Pacific), 8,000 work in the engineering, manufacturing, R&D, shared services, sales, and marketing (the Americas), and 3,400 work in sales, marketing, R&D, and engineering (EMEA, Israel, and India).

Products and Services

• Western Digital offers internal and external hard disk drives (HDDs), solid state drives (SSDs), and commercial internal drives for computing devices like desktop and notebook PCs, mobile devices, smart video systems, gaming consoles, and set-top boxes, as well as flash-based embedded storage products for mobile phones, tablets, notebook PCs, and other portable and wearable devices, as well as automotive, Internet of Things, industrial, and connected home applications.
•  USB flash drives, commercial removable storage, MP3 players, memory cards, accessories, portable drives, NAS for home and office, external drives, enterprise helium hard drives, enterprise SSDs made up of flash-based SSDs and software for use in enterprise servers, online transactions, data analysis, and other enterprise applications, data center solutions for data storage systems and tiered storage models, and data storage platforms are among the additional products and services offered by the company.

 

Source

 

• Western Digital owns 6,303 registered patents, the majority of which fall within the "information storage" space.
• The company also has 167 trademark registrations, with "scientific and electric apparatus and instruments" being the most prevalent class.
•  G-Technology, SanDisk, WD, NACON, WD-BLACK, SanDisk Professional, and Incase are some brands Western Digital leverages to offer its products and services to original equipment manufacturers (OEM), distributors, dealers, resellers, and retailers.

Annual Revenue

• In 2021, the company recorded net revenue of $8.22 billion.
• Western Digital's net revenue for 2020 was $8.97 billion.

Funding

• Western Digital has completed six rounds of funding. The company's first seed of fund was $80 million by Matrix Management Corporation on 15th May 1977.
• In May 1978, the company secured $150 million from Sequoia Capital in its second round of seed funding.
• The company secured $150 million from Microsoft Corporation in its post-IPO round of funding in August 1997.
• In May 2016, Western Digital secured $1 billion from Berkshire Hathaway Inc in its second post-IPO round of funding.
• Western Digital completed another round of post-IPO in July 2017, with the amount undisclosed.
• In September 2017, the company secured about $5 billion in its fourth post-IPO round of funding.

Corporate Values and Missions

• Western Digital corporate core values are "Think Big, Make It Happen, and Do It Together".
• In 2019, Western Digital uncovered a new vision and mission statement enterprise-wide. The company's corporate mission is "to be recognized as the world’s leading data infrastructure company, architecting how data enables the world to solve its biggest challenges".
• "Wherever you are, Western Digital is with you every step of the way. We are always at the cusp of innovation, pushing the boundaries of technology to make what you thought was once impossible, possible" is the corporate vision of Western Digital, according to the information on their official website.

Strategic Initiatives

Legacy ERP Transformation (Past)

• In 2016, Western Digital acquired two other organizations — HGST and SanDisk Corporation. This acquisition created a complex resource structure for Western Digital. The newly expanded company's new resource structure included global market operations, 10 manufacturing plants, and 3 custom-built Enterprise Resource Planning (ERP) systems. To consolidate its resources and operations, Western Digital laid out a 5-year plan to integrate the applications and processes across the 3 constituent companies.
• After months of evaluation, the company decided to adopt the Oracle Fusion suite to consolidate its applications and resources. Western Digital's effort hinged on the "cloud first" approach so as to minimize the impact of the transformation on core business functions such as manufacturing. The transformation process was rolled out in four phases. The first 3 phases consolidated finance, order management, and indirect procurement processes in the cloud.
• The fourth phase of the transformation began in 2019 and was divided into many sub-phases. This final phase was critical to core business operations and included the consolidation of global operations across its 10 manufacturing plants located in 5 countries. Western Digital consulted Infosys on this fourth phase to standardize the process and identify opportunities.
• Western Digital leveraged Infosys Cobalt, a suite of services that accelerate enterprise cloud transformation, to manage its ERP transformation and consolidate its global operations, which resulted in efficiency gains in terms of automation enablement and self-service capabilities. Some benefits of Western Digital's approach to phased ERP transformation include operational cost reduction and faster time to market, and higher procurement efficiency.

Next-generation Storage Technology Standardization (Future)

• In March 2022, Samsung announced its collaboration with Western Digital, and the signing of a Memorandum of Understanding between the two companies to collaboratively standardize and lead the adoption of "next-generation data placement, processing and fabrics (D2PF) storage technologies." The initial focus of the collaboration is to improve the Zoned Storage solutions ecosystem.
• The collaboration between Samsung and Western Digital will ensure that consumers can enjoy the flexibility that comes with the support of multiple vendors and software companies on emerging storage technologies.
• According to Rob Soderbery, Executive Vice President (EVP) and General Manager (GM) of the Flash Business Unit at Western Digital, the company has had a history of "laying the foundation for the Zoned Storage ecosystem by contributing to the Linux kernel and open-source software community. We are excited to bring these contributions to this joint initiative with Samsung in facilitating wider adoption of Zoned Storage for users and application developers."
• Following their collaboration, Samsung and Western Digital set up a Zoned Storage Technical Working Group (TWG). The TWG was approved by the Storage Networking Industry Association (SNIA) in December 2021. The TWG has begun defining use cases for Zoned Storage devices, programming models, and host/device architectures.

Quotes

Quote #1

• In the 2022 edition of Western Digital's What's Next Event, the CEO of Western Digital, David Goeckeler, said, "Everything we do starts with the belief in human potential as it intersects digital innovation and in turn, creates possibility. Inspired by the many ways in which our customers use data and empowered by our strong go-to-market engine, we uniquely address the broad storage needs of our diverse customers, at any scale — from the smallest intelligent devices to the largest public clouds."

Quote #2

• In May 2022, Elliot Management, an activist investor with $1 billion worth of investment (6% stake) in Western Digital, called for the full separation of Western Digital's flash and hard disk businesses. The CEO of Western Digital responded to the concern with a statement saying, "The board is aligned in the belief that maximizing value creation warrants a comprehensive assessment of strategic alternatives focused on structural options for the company's Flash and HDD businesses. Through this process, we are actively engaging in a broad range of strategic and financial alternatives that will help further optimize the value of Western Digital, including Elliott's offer to invest incremental equity in our flash business.

Digital Strategy Highlights

•  Solid connections with key figures in the data ecosystems that provide us the widest possible market access is one of the company's digital strategies.
• To address the market's increasing needs for scale, performance, and cost-effectiveness, Western Digital continues to research and develop cutting-edge technologies across platforms for both HDD and flash. As a result, the company can quickly provide new products and solutions.

Existing Marketing Tech Stack

• According to Slintel, Western Digital uses 434 technologies across 21 categories. These include Microsoft Azure, C, JavaScript, VB.NET, HTML5, Google Analytics, and jQuery.

Corporate Challenges

•  COVID-19 pandemic is one of the challenges Western Digital is tackling. According to the company, COVID-19 negatively impacted and will continue to impact their personnel and business operations, as well as those of their strategic partners, clients, suppliers, and logistical providers. Among these effects include under-absorbed overhead, rising transportation, and other costs, declining demand for products, and manufacturing difficulties.
• The company also cited the departure of key management, staff, and skilled workers as one of its challenges. This is because the probable failure of the company to identify and integrate new hires or the decision to restructure their operations has had a substantial negative influence on the company's business prospects.

Major Competitors

1. Seagate Technologies 

• Seagate Technology started as Shugart Technology in 1978 and was renamed Seagate in 1979. The company develops, produces, and distributes storage products in the United States and across the globe.
•  Seagate's products include enterprise nearline hard disk drives (HDDs), nearline solid state drives (SSDs), systems, video and image HDDs, network-attached storage drives, and legacy applications including Mission Critical HDDs and SSDs; external storage solutions the Seagate Ultra Touch, One Touch, and Expansion product lines. The company also offers Lyve edge-to-cloud mass capacity platform.

2. Micron Technology 

• Micron Technology Inc started as a semiconductor design company in 1978. The company has expanded into memory and storage products' design, production, and distribution. Micron operates through four business units: compute and networking business, mobile business, storage business Unit, and embedded business.
•  Products offered by Micron include DRAM devices, NAND, NOR, memory cards, Micron SSDs, Authenta, and HSE (Heterogeneous-Memory Storage Engine).

3. Hitachi Vantara 

• Previously known as Hitachi Data Systems, Hitachi Vantara is a producer of data storage systems (HDS). Hitachi Vantara, a wholly owned subsidiary of Hitachi Ltd was founded in 1989 with its headquarters in Santa Clara, California.
•  Products offered by Hitachi Vantara include primary block storage, file storage, object storage, mainframe storage, Software Defined Storage (SDS), converged and hyper-converged infrastructure, storage as a service, data protection as a service, and infrastructure services.

Relevant Facts

• According to Yahoo Finance, as of July 31, 2022, Western Digital Corporation's ISS Governance Quality Score is seven. The pillar scores are as follows: compensation: nine; shareholder rights: five; board: five; and audit: four.

Research Strategy