Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Fusion-IO, Inc. (FIO), Micron Technology, Inc. (MU), Seagate Technology PLC (STX): The Solid-State Hardware Revolution

Page 1 of 2

Hard drives? Who uses them anymore? Actually, we all still do. But the technology is changing. The progression in storage technology has probably been most recognized with Apple’s products. It could be seen about a decade ago as iPods and MacBooks began to move from regular platter-based hard drives to solid-state storage. That made those products so thin and light, replacing the clunky look for more mobile and sleek devices.

Now things are moving quite rapidly to the cloud — which is where most of our data is now being stored — on servers owned by the technology companies that we use. As the demand for these servers grows, so will storage requirements.

Solid-state storage is a more inert way of storing data. That’s a fancy way of saying that it has less moving parts, which means there is less chance of hardware failure. Over the long run, that will have a big impact on information technology infrastructure. So, let’s look at some of the companies that are trying to conquer the solid-state storage market.

Fusion-IO, Inc. (NYSE:FIO)

Fusion-IO, Inc.Salt Lake City-based Fusion-IO, Inc. (NYSE:FIO) focuses on providing storage solutions to the enterprise market. That means powering huge data sets and allowing them to be accessible faster with solid-state memory. That’s valuable, since Microsoft Research has found that being able to handle storage needs for big data is one of the top IT trends for 2013.

What doesn’t appear to be valuable, however, is Fusion-IO, Inc. (NYSE:FIO)’s balance sheet. The company appears to be growing faster than the market is dictating. A number of acquisitions transformed Fusion-IO, Inc. (NYSE:FIO)’s most recent quarter into a $20 million loss. While the company has a lot of upside, it seems to be enamored with its own hype. Watch out in the next six months if they can rein in the M&A activity and focus on the business at hand. There is tremendous upside, but there are temporary concerns about their growth strategy.

Micron Technology, Inc. (NASDAQ:MU)

Most people are familiar with Micron Technology, Inc. (NASDAQ:MU) as a semiconductor company. But, it holds a lot of patents outside of processor chips, and one of those fields is solid-state. The company has worked on a lot of innovations in this field, perhaps most notably on its ability to increase storage size while maintaining access speeds.

However, the company seems unable to improve revenue while maintaining operating expenses. Despite being an innovator in technology, it appears that Micron Technology, Inc. (NASDAQ:MU) is spending more than it really should. Micron reported losses in every quarter of the past year. In technical terms, it appears that their business is sound. But shifts in the hardware market appear to be causing Micron Technology, Inc. (NASDAQ:MU) a lot of trouble. Micron does not look like a good investment at all any time soon.

Seagate Technology PLC (NASDAQ:STX)

When it comes to storage, most investors are familiar with Seagate Technology PLC (NASDAQ:STX). Of the companies outlined here, Seagate Technology PLC (NASDAQ:STX) has the most experience by being one of the largest players in the market. But, the company has witnessed declining revenue for the past three quarters. Net income has also gone down, and the company could be confronted with a serious problem going forward.

Being an older company has its downsides. Seagate has a lot of legacy costs, and although it sees the future in solid-state, it is still selling a lot of traditional hard drives. Some of this is because of the demand in the market. But once the cost of solid-state technology drops, Seagate Technology PLC (NASDAQ:STX) is going to be well positioned to take advantage of its clout and sell to businesses looking for quicker storage solutions. Seagate is a winner that is currently undervalued in a market full of hype.

Page 1 of 2
Loading Comments...