Seagate Technology Inc wants to reduce its dependence on what has become a very volatile disk drive market, and aims to diversify by acquisition to achieve its goal of becoming a $6,000m-a-year company by 1999, the firm told Reuter. The company is looking for small or big software companies in data, storage and network management, and has hired Stephen Luczo, a former Bear Stearns & Co senior managing director to be its new senior vice-president, corporate development. The company, which hinted at the new strategy last month (CI No 2,282), says it is in the preliminary stages of this strategy – in the fact-finding mode – and that no deals are imminent. As reported, the company has UKP723m in cash and marktable securities and is well placed to borrow if it needs more. In fiscal 1993 to July 2, Seagate reported sales of $3,043m and profits of $195.4m, but the target is $4,000m from storage products, another $1,000m from software and another $1,000m from components, where it is also looking to invest – indeed it already has a disk head plant in Northern Ireland, and sells heads to other manufacturers as well as using them in its own drives. Last month, it bought Caltex Software Inc, a start-up database software developer where it had held 40% since March. It has also hired a director of software marketing to develop the Caltex strategy and to identify other business opportunities for Seagate. In its present core business, the Scotts Valley, California company sees the strong demand for disk drives continuing, but margin pressure is intense. The company’s high-end storage systems are on allocation, but it reckons it has the lowest pricing in the industry this quarter.
