History (1994): DEC OEM Storage Becoming Avastor

Digital Equipment Corp. (Shrewsbury, MA) has decided to give the name Avastor to its OEM storage business that develops and sells 3.5-inch HDDs, SSDs and DLT tape cartridge drives.

It won’t be a subsidiary of DEC but a division of its current Storage Business Unit.

Three reasons to this operation, according to Jack Sharp, VP of the new entity: “1/ compete in parity with other storage vendors, 2/ reflect expansions in customer base, 3/ clear distinction from Digital’s systems business.“

The newly-created Avastor already for sale?
But this division could give DEC a better appearance so it could sell it better. We’ve noticed that DEC’s name doesn’t show in Avastor, only in small printing at the bottom with the words ‘A Digital Equipment Business’.

Since DEC’s CEO Bob Palmer recently said he was studying the possibility of business unit sales before the end of the fiscal year, the press and some US financial analysts have even given the name of potential buyers (Seagate, Quantum, AT&T, HP) and sales prices ($400 to $600 million), for an activity valued at about one $billion.

Of course Sharp, which we met on June 29, doesn’t confirm it but doesn’t find these figures odd. It even remarked that in 1989, Imprimis, which reported $4 billion sales annually, was acquired by Seagate for about $460 million.

The most interesting part of Digital’s storage business is probably its head manufacturing plant, Rocky Mountain Magnetics (Louisville, CO), a joint venture with StorageTek which controls the Diamond head thin-film technology and manufacturing and mainly MR heads after a cross license agreement with IBM. This could attract many HDD manufacturers, especially those with the most cash, like Quantum and Seagate. For this last one, it would be a way to recuperate a technology that is held back by a suit currently underway by Big Blue.

Therefore, except IBM, Fujitsu and now DEC are currently the only ones to have MR head HDDs.

Rocky Mountain is in pre-production of MR heads with a density greater than 1Gb per square inch, it was announced. Avastor will then be in Digital’s Storage Business unit in parity with the Heads, StorageWork Solutions (for the subsystems and the RAIDs), and the new Video and Interactive information services businesses for the video-on-demand.

IDC estimates DEC’s share in the WW HDD market at 1.7%, compared to 0.4% in 1992 and 0.8% in 1993.

It’s in the high capacity 3.5-inch drive segment (5.25-inch drive manufacturing has been stopped) that the company has the better image, with notably 7.8% of non-captive sales of 1 to 2GB devices and 9.1% for the 2 to 3GB ones.

“Over the past year, Digital’s storage components business increased revenues by 300% and more than doubled our disk drive market share, while expanding our global distributor and reseller partnership from 5 to 41,” said Sharp.

It adds that the total new business revenues for first 5 years exceeded $2 billion, and that a 350% growth in new customer revenues was reported in FY94 over FY93 (fiscal year closes at the end of June).

High increase in production
An Avastor US customer resource center was also announced, to provide product information, technical data, installation assistance and troubleshooting for the customers. It plans to establish a similar service in Europe and Asia later this year.

Digital’s newest support facility, located in Nijmegen, The Netherlands, enhances support to European customers.

A huge effort is made to increase the disk drive production rate. Sharp speaks about a 7-fold increase in manufacturing output from FY93 to FY94. The new Penang, Malaysia, facility is expected to reach an annual output exceeding 1 million disk drives by June 1995, and an increase in staffing and output at the Colorado Springs plant will triple disk drive output and double production of DLT drives over next year.

DEC also intends to open a $6.2 million head gimbal and stack assembly plant of 100,000 square feet in Batam, Indonesia, with production for year-end.

DEC’s first HDD with MR heads
At the same time, the US company is announcing a new series of 3.5-inch Capella disk drives, 1-inch high with a Fast SCSl-2 interface and embedded servo. It notably includes its first MR head Winchester devices, the Capella 3221. It has a 2GB capacity on 4 platters spinning at 5,400rpm for a net user transfer rate of 7.5MB/s. Its average seek time is 8s in read mode and 9s in write mode.

“It is the leading transfer rate and the fastest seek time in the industry,” said Keith Staub, Avastor’s storage product manager.

DEC doesn’t use the PRML technology yet.

“For the time being, we’re only focusing on controlling MR heads. We will come to PRML in the next 2 years,” adds Staub.

DEC’s OEM storage history
· 1991: Launches OEM storage business; Diamondhead thin-film head technology; first 5,400rpm 3.5-inch disk drive; highest capacity 5.25~inch HDD
. 1992: Captures 13.3% unit share of 3.5-inch 1GB non-captive market (source: InfoCorp); 3.5-inch disk drive with industry’s highest capacity and highest-track density; 220MB 2.5-inch HDD launched (then stopped); Rocky Mountain Magnetics: heads partnership with StorageTek; SSDs of 107 and 267MB capacity; Archive, then Conner Peripherals, distribute DLT drives
. 1993: Expansions to Colorado facility manufacturing capabilities; 10GB DLT drive; family of 1-inch high disk drives; 428MB SSD with integrated data retension: 4GB 5.25-inch magnetic disk drive (stopped today); magnetic disk partnership with AT&T; closing its disk drive plant in Kaufbeuren, Germany; first 7,200 rpm, 3.5-inch HDDs: ASABET silicon chip set; 20GB DLT drive; 856MB SSD with integrated data retention.
1994: Increases staffing and output of Colorado facility will sell DLT drives; customer service facility in The Netherlands; DLT partnership With Avail Systems and Dell; Avastor identity; first MR disk drive; Penang, Malaysia facility opens.

This article is an abstract of news published on the former paper version of Computer Data Storage Newsletter on issue 78, published on July 1994.