LEVY: Storage is often dismissed as a commodity. Does this bother you? WATKINS: I don’t think it’s unfair to call it a commodity. I think it’s unfair not to respect a commodity. There’s a tremendous amount of technology in this commodity. More importantly, people don’t recognize that by making this commodity we’ve been able to earn a lot of profit. I’m proud to be a commodity.
On the other hand, you ’ re adding features to your products to distinguish them from competitors — like encryption and backup. Do consumers really use that stuff? Not as much as they should. Only 4 percent of computer users actually have a drive to back up their data, and three fourths of those only do because they’ve had some bad experience where they lost something. What we’ve got to do as a company is to get people to recognize that you can protect your stuff, and not wait until you’ve got it lost or stolen.
Seagate recently did a turnaround by announcing it will make flash-memory drives, a departure from your previous hard-disk-only stance. Why? With technology companies, if you’re trying to defend yesterday, you’re going to die. In a lot of ways it has nothing to do with flash; it’s more of an attitude. I wanted my company to quit worrying that we had to defend hard drives. We’re a storage-solution company, and we will find the right component to do that.
You made headlines recently by invoking the possibility that a Chinese company might buy Seagate, while saying this would be a bad thing for America. Why do that? It was my Americanism coming out. What’s right for America is not necessarily right for American stockholders anymore. We don’t want to be a country that loses the ability to do storage technology. We invented storage in this country. We had 50 drive companies at one time, and now we’re down to two. If an Asian company comes in here and offers a $5 [per share] premium, I’d have to really consider that for my shareholders. Not that I have an offer or that I would allow that to happen, but that’s just the mentality now in this country. Do you want all your storage designed by foreign countries—or all your technology done by foreign countries? We’ve got to get back to how we were in the ’60s, where we used the university and business and government to keep our technology leadership. We’ve just lost that.
Will low-cost storage, by capturing our personal information, destroy our privacy? What’s going to ruin our privacy is our ability to give it up. We are willing to let the government do this to us. I’m stunned at what people are willing to let happen.
How capacious will hard drives get in the next couple of years? There’s will be big markets for the highest-capacity drives you can make. You’re going to have hi-def video, a lot of your own pictures … TV shows, football games. People are uploading so much content themselves to MySpace, YouTube or whatever, and they want to create that content and they want to share that content, and then they want to keep that content around them.
Every year you spend $2 million to send employees for a triathlon-style event in New Zealand. What ’ s that about? We bring out employees at every level, from direct labor to me, and put them on a week of training and an adventure race, with biking, kayaking, whitewater rafting and rappelling. A company like ours is all about teamwork, people being able to make decisions for the betterment of the team over their own department, division or organization. I’ve found that people learn best when I put them in a situation that they’re not comfortable in, where they’ve got to learn to ask for help and they have to learn to make decisions together.
