Seagate Technology

Every time you surf the Internet, hit 'send,' trade a stock online, click on an ad, watch a Hollywood blockbuster or use an ATM, you access, share and store tremendous amounts of digital information. And for 20 years, we've been developing the technology and manufacturing the products that help make all of that happen. Data storage--Seagate's core business--makes billions of Internet pages, millions of transactions and entire new industries possible. Worldwide demand for storage doubles every 9 months, creating a storage market opportunity that is estimated to reach approximately $100 billion by 2002. Given this growth, most major computer companies are looking to storage as their next area of opportunity. And when they look to storage, they look to Seagate--the world's largest and most technologically rich independent storage company. Key Dates: Cofounder Alan Shugart resigns under pressure from the company's board of directors. Seagate goes private in a $20 billion stock swap and management buyout. Seagate Technology, Inc. has been the world's leading independent manufacturer of rigid magnetic disks and disk drives for computers since the 1980s. The company pioneered the downsizing of mainframe hard disk drives, making them affordable for personal computers. In the 1990s the company expanded into software and presently is the leading provider of technology and products that enable computers to store, access, and manage information, including disk drives, magnetic disks and heads, tape drives, and software. In 2000 Seagate was transitioning from public to private ownership, due to a complex $2 billion buyout. Seagate was established in 1979 in Scotts Valley, California, by a group of businesspeople, including Alan Shugart, who had been an engineer with Memorex for four years after spending 18 years at IBM. Seagate was his second startup after having founded Shugart Associates, the company that made floppy disk drives a standard feature on personal computers. When Shugart Associates was sold to Xerox a year later, Shugart was forced out. Of Seagate's group of four cofounders, another significant member was Tom Mitchell. He had come from Commodore, where he had served as general manager of Commodore business machines, and had previously worked at Bendix, Fairchild Camera, and Honeywell. Shugart became president and CEO of the new company, while Mitchell started out as senior vice-president of operations. Another cofounder was Finis Conner, who left Seagate in 1984 to form Conner Peripherals. It was Conner who approached Shugart with the idea of installing hard disks in personal computers. After competing with Seagate in hard disks for more than a decade, Conner Peripherals was acquired by Seagate in 1996. Hard disks are made of one or more magnetic-coated aluminum platters. Data is stored on, retrieved from, and erased off the rapidly rotating disk by a mechanical arm, which moves across the disk. The whole mechanism is called the disk drive, or hard drive, and the technology for the sealed unit, which is also known generically as a Winchester disk, is Seagate's basic product. Hard disk technology allows the storage of more data than a floppy disk, and does it at a faster rate. Unlike larger mainframe computers, personal computers were originally built with only a floppy disk drive and without hard drives. Therefore, the market was open for an independent company like Seagate to manufacture hard drives and sell them directly to computer manufacturers. They in turn would incorporate the drives into their personal computers as add-on features. Seagate's first client was IBM in 1980, just as the latter was about to introduce its personal computers, which would set the standard for the industry. Seagate's first product, a 5.25-inch hard drive, was very successful. By 1982, with sales of $40 million, Seagate had captured half of the market for small disk drives. The company went public in September 1981, with an initial stock