Western Digital CEO David Goeckeler made the comments at the recent Goldman Sachs technology conference, adding that he has little confidence in the company achieving its sales revenue projection of around $3.6-3.8 billion in its final quarter of the year.
For its part, Seagate has also revised its revenue projections for the recent quarter, going down from $2.5 billion to $2.1 billion. CEO Dave Mosley, in his own appearance at the conference, said, “everyone’s just taking a little bit of a pause” from investing in storage of any type, referring to the trend as a “multi-quarter correction”.
Storage industry woes
Goeckeler noted that even investments in business cloud storage from reputable providers are down, so the current downturn in physical sales can’t be wholly attributed to the post-pandemic trend of businesses investing in cloud storage to facilitate work-from-home allowances.
Mosley instead claims that the downturn in sales comes from a lack of interest and support from both the corporate and consumer levels, which he said was unusual for this time of year. Goeckeler was more positive overall about WD's gross consumer revenue, claiming that its SanDisk brands are a “gem of consumer business.”
Goeckeler also claimed that the spectre of COVID-19 was keeping costs high across the board, reducing WD’s gross margins.
“And then hopefully, at some point, we’re going to be out of COVID. I mean, COVID has kind of just an all the additional costs we have, whether it’s logistics or keeping our employees safe or all the other kinds of things we have with COVID, those will essentially recede and we’ll be able to get back to the margins we expect out of the business. We’re in a bit of a low right now because of that.”
Between pandemic recovery and both companies suffering from reduced demand in Chinese markets, it’s no wonder that the storage media industry is having trouble all round.
The industry-wide “correction” is still in its early days, but, thinking forward, cloud storage does have clear, built-in advantages over physical offerings for cost and convenience.
As a result, we can only speculate whether physical media will continue to be quite so readily available and cost-effective in the foreseeable future as businesses and consumers become less interested in keeping their data close.
- Here's a list of the best rugged hard drives right now
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Luke Hughes holds the role of Staff Writer at TechRadar Pro, producing news, features and deals content across topics ranging from computing to cloud services, cybersecurity, data privacy and business software.