Businessmodel of HGST

Customer Segments

HGST provides a broad range of hard drives, solid state drives, and other enterprise data storage solutions to commercial entities across multiple industries, including to distributors, original equipment manufacturers, and other enterprise businesses. The Company divides its customers primarily into the following industries:

• Cloud Service Providers, comprising various cloud storage solutions providers;
• Financial Services, comprising a range of financial services providers such as investment managers, brokers, and insurance companies, as well as banking institutions;
• Healthcare and Life Sciences, comprising healthcare providers such as hospitals and clinics, as well as life sciences and pharmaceutical companies;
• Oil and Gas, comprising oil and gas companies across the entirety of the energy chain, including independent and multinational oil and gas producers and transmission companies;
• Telecommunications, comprising telecommunications providers, including internet service providers, cable network providers, and mobile telecoms companies;
• Media and Entertainment, comprising broadcasting, publishing, and marketing and advertising companies; and
• Other Enterprise Data Centres, including data centre operations across a number of other sectors. HGST serves a global customer base. While its principal market is its native US, HGST also serves customers around the world, including across Asia Pacific, Europe, and the Middle East.

Value Propositions

HGST provides value to its customers in the following ways:

• Its industry standing and reputation, with the Company established as a reliable provider of enterprise data storage solutions, with a positive track record and a large commercial client base;
• Its diverse range data storage solutions, with the Company offering a wide range of storage solutions – including solid state solutions and hard drives – that suit the needs companies across multiple industries, including the healthcare and financial services sectors;
• Its proprietary technologies, with the Company developing and utilising a range of proprietary technologies for use in its solutions, enabling it to provide unique and innovative service offerings;
• Its international sales and service reach, with the Company serving a large domestic customer base in the US, as well as a number of overseas clients, including in Asia Pacific and Europe; and
• Its technical expertise and experience, with the Company employing specialist technical personnel across the enterprise, as well as a team of experienced industry executives. ### Channels

HGST operates a website at www.hgst.com, through which the Company provides information on its various products, services, and target industries. Despite its online presence, the Company does not operate an online sales channel. HGST operates its own n-house sales force that deals directly with clients, providing information and support. These personnel operate out of the Company’s network of offices.

HGST also makes sales through a network of third party channel partners. This includes a range of authorised distributors across numerous international markets across the Americas, Europe, Asia Pacific, and the Middle East, including in Brazil, Mexico, China, Malaysia, Czech Republic, and Norway.

These distributors are authorised to market and sell HGST products and solutions on the Company’s behalf. HGST also makes sales through a network of physical and digital retail partners in Canada and the US.

Customer Relationships

HGST does not provide products or services directly to customers on a self-service basis. Customers can purchase HGST products on a largely self-service basis through third party retailers both online and in physical stores. Customers can also use products purchased through these retailers independently after purchase.

HGST provides tailored guidance and solutions to commercial clients where possible, customising certain data storage solutions to suit the size and requirements of individual clients. Services are provided under sales and service contracts, with the Company seeking to establish long-term customer relationships and secure recurring business.

HGST provides ongoing support to its customers, offering tailored assistance in relation to its various products and solutions and across its multiple operating markets over the phone or via email. The Company also provides a catalogue of technical support resources, including warranty policy information, technical documentation, and compatibility guides.

HGST keeps its customers updated with company developments, and interacts with customers directly, through its blog and social media accounts, including with LinkedIn, Twitter, Facebook, and YouTube.

Key Activities

HGST is a provider of data storage products, solutions, and services. This includes the manufacture of storage devices such as hard drives, external drives, internal drives, solid state drives, and hard disks.

The Company serves a diverse range of commercial clients spanning multiple industries, including the healthcare, financial services, oil and gas, media and entertainment, and telecommunications sectors. In addition to its own direct sales channels, the Company makes sales through various third party channel partners, including an international network of authorised distributors and digital and physical retail outlets. HGST serves clients across the Americas, Europe, Asia Pacific, and the Middle East.

Key Partners

HGST works in close collaboration with a range of partner companies and organisations in order to develop and deliver reliable and effective solutions. These partners can be organised broadly into the following categories:

• Supplier and Vendor Partners, comprising suppliers of materials, equipment, and components utilised in the development and manufacture of the Company’s physical products, as well as suppliers of services and technologies that are utilised more broadly cross the Company’s operations;
• Channel and Distribution Partners, comprising the Company’s network of third party sales and distribution partners, including authorised distributors, value added resellers, and physical and digital retailers;
• Marketing and Affiliate Partners, comprising various online and offline businesses that assist in enhancing the Company’s own marketing reach, often in return for commissions; and
• Strategic and Alliance Partners, comprising companies from a range of industries, with which the Company collaborates on a various joint projects, including in marketing, branding, and development. HGST has launched a number of partnerships in recent years. This includes partnerships with Cisco and ICC.

Key Resources

HGST’s key resources are its proprietary technologies and intellectual properties, its materials and supply chain, its IT and communications infrastructure, its sales and distribution networks, its manufacturing facilities, its partnerships, and its personnel.

HGST utilises a range of intellectual property protections to secure its proprietary technologies. Searches of records published by the US Patent and Trademark Office identified several patent applications filed in HGST’s name, including applications entitled ‘Solid state devices having fine pitch structures’, ‘Multiple bit per cell dual-alloy GST memory elements’ and ‘Self-aligned memory cell contact’.

HGST additionally owns a number of physical properties across its operating markets, comprising its office network, manufacturing facilities, and storage and distribution infrastructure.

Cost Structure

HGST incurs costs in relation to the development of its technologies, the procurement of materials and services, the operation of its manufacturing facilities, the maintenance of its IT and communications infrastructure, the operation of its sales and marketing network, the implementation of advertising campaigns, the management of its partnerships, and the retention of its personnel.

Revenue Streams

HGST generates revenue through the sale of physical data storage products and the provision of more complex enterprise data storage solutions to customers across multiple industries. The Company derives revenue in the form of physical sales, as well as under sales and service contracts.

HGST is a unit data solutions group Western Digital, which generated net revenue for the year of $15.13 billion in 2015.