Summary:

Further evidence that hard disk drive storage lives on — Seagate is buying Xyratex, a maker of HDD testing gear, to solidify its supply chain.

Amid all the hoopla about flash storage, it pays to step back and remember that hard disks are still storing a heckuva lot of our stuff, and will continue to do so for the foreseeable future. Remember flash fanboys, even slow tape storage lives on. And on.

And that’s why Seagate Technology just dropped $374 million or $13.25 per share in cash to buy Xyratex, a maker of hard disk drive (HDD) testing gear. In a statement Seagate said the deal will strengthen its “vertically integrated supply and manufacturing chain for disk drives and provide uninterrupted access to important capital equipment.”

The deal also nets Seagate Xyratex high-performance computing (HPC) array business, which might pose a problem down the road as those arrays will compete with array’s from Seagate’s own customers — including NetApp, according to The Register.

Seagate and rival Western Digital are leaders in hard drive sales and are both working to boost speeds and feeds of that technology while also building up their own flash storage portfolios.

Seagate said it will run the Xyratex business as a standalone unit.

In a research note, Wells Fargo analyst Maynard Um said the aforementioned vertical integration of Seagate’s HDD supply chain is increasingly important as “HDD capacities approach the multi-terabyte mark and testing times increase.”

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