Newsmaker: Take your tech recession and stuff it

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If solid-state demand takes off, does that, at all, impact your hybrid-drive plans?
Watkins: Well, we think hybrids are nice solutions for notebooks. We think solid-state drives kind of play in the enterprise fairly well. The real opportunity in notebooks is power and boot-up time. The power in a notebook--the storage is less than 10 percent of the total power used. So you can't make a lot of power savings with the solid state or hybrid, and in fact we can make within a minute or two with a hybrid the same power usage. We can cache the operating system to a hybrid, to a solid-state chip on the drive, and we can get the boot-up time fairly close to what you could get with a solid state.

Are companies like SanDisk going to play more prominent roles in your segment of the business?
Watkins: I think they hope they will. But we just don't see them making major penetrations unless there's some really fundamental issues resolved, and that's just cost per gigabyte.

Speaking of cost per gigabyte, what should consumers expect to be able to get for their money when they walk into a retail store to buy storage later this year?
Watkins: You'll be able to go in there with 150 bucks and probably by the end of the year, you're going to be looking at stuff over 500 gigabytes. I mean price has dropped 5 percent to 10 percent every quarter, boom, boom, boom! It'll keep doing that.

You mentioned Vista. What impact has Vista had on your business since Microsoft introduced the product?
Watkins: I think it's driving higher capacity. The operating system itself is 20 to 25 gigs once you kind of get it all in there. But there are other trends driving higher capacity besides Vista. There's more content and distribution things, and a lot more video.

You wrote a column for us last year about how the flaw with current legislation is that it fails to specify how to encrypt data. Do you still expect a big security breach that would bankrupt a company or threaten the country's national security?
Watkins: Well, obviously, I've got my own spin here because I want to sell you encrypted drives, but you see this every day, where someone's losing files or losing a notebook with important material on it. When you throw away your PC, personal stuff is still there. It's very hard to get rid of it. One of the things that people don't think about is that someone could get that data back if they wanted to.

So, lastly, what do you think? Hillary or Barack?
Watkins: I don't know. I can't make up my mind. I really can't and I've supported both of them. The problem is they are not all that different. I think there's more diversity in the Republican race than there is in the Democratic race.

From a tech perspective, do any of the candidates seem particularly attractive or particularly unconcerned about the issues that most affect your industry?
Watkins: No. I think because of California being a fairly strong Democratic state, we tend to get a lot of mind share from even the more liberal side of the Democratic party on tech issues, probably less on the Republican side. But that may have to do with politics and things like that.

Our biggest issue, or one of the big issues, is the H-1B and this whole immigration thing, about getting green cards to people who will get Ph.D.s from our universities. My frustration with the Republican party is they've been so focused on the immigration issue as relates to the border, with Mexico, that we're hurting ourselves in training these Ph.D.s. I mean, 60 percent of our Ph.D.s last year were foreign-born; we train them and we send them all back home. The problem I have with that is that we're outsourcing our most important talent.

If all our research people are now being sent offshore, we're going to have to do that. So I think every (foreign-born) Ph.D. graduate should get a green card. Keep them here, keep those sorts of high-tech jobs here in the U.S.

The second step you need is to get government to start putting programs back together like we used to have between universities. Let's get kids back in science and engineering so we will keep these jobs. It's a long-term view of what we have to do.

More Newsmakers

[johngallagher]

Typical CEO

Ooops, my bad. Sorry you got layed off, my mistake and it didn't need to happen. And it has cost the company profits and stressed out the remaining workforce to make the numbers. But now we can say there is a recession and hire you back with less pay and benefits. Or better yet, out source your job!

[kgsbca]

Hardly a typical CEO

Watkins is one of my favorite CEOs (the list is very small, most are just politicians, and I do not like politicians), and Seagate is one of my favorite stocks (even though they are grossly undervalued by analysts and stockbrokers). You're expecting him to not make mistakes, that is impossible. At least he admitted it, unlike most CEOs and politicians, who will try to spin their way out of any blame.

And speaking of spinning, he is uncharacteristically (for a CEO/politician) forthright in his comments on encrypted drives - he admits he has a bias in favor of using those drives because he sells them.

Watkins is unique among executives - he understands his business, and is not just a manager. Don't paint him with the same brush as the bean counters that run most other companies, who increase profits the way you described.

[co_z]

Hard drive failure is not a big issue?

"if you look at the returns why PCs fail to come back, the hard drive is not the No. 1 or 2 issue"

This is utterly false, especially when dealing with laptops. In my experience hard drives are the #1 failure point in laptops - hard drive often have a shorter life span than batteries.

This sounds like a way for Mr. Watkins to pitch how reliable his products are.

I think a lot of people who have been burned with multiple laptop hard drive failures will switch to solid state once the capacity matches traditional drives.

[Mycroft_514]

Actually, in my experience, he's right.

I'm on my 5th laptop now (upgrading for performance each time.)

Failures (each once, and spread across machines):

1. Power supply
2. cover hinge
3. virus
4. Motherboard failure
5. DVD drive failure

And that is over a 20 year span from first laptop to now.

[jscott418]

Smaller form factor affects durability

I think the smaller hard drives and the environment that laptops
function in has more to do with failures. All of a sudden we have
become backup user's? I see external hard drives for sale all over
the place. What is needed is a second hard drive in a laptop to
serve as a backup drive. Too many of us fail to carry with us a
external drive along with our laptops.

[Phillep_H]

Failures

Laptop batteries are the worst, followed by the wiring to the display on the laptop. Floppy drives and CD drives in laptops are next, with desktop drives after.

Hard drives have been pretty reliable.

[mjvtz]

Lap&Desk Top drives fail excessively

and they have been since the manufacturers lowered their warrantee period from three years to one year ... failure rate on business machines are much lower because they dont want to lose bulk purchasers ... so the drives (and other components) that test out marginally go into "home" computers ... duhhhhh