2014 Big_Data_Forum_HGST

© 2014 HGST, INC.

Brendan Collins Vice President, Product Marketing

How the Internet of Things

Has Changed the Way

You Should

Look at Storage

© 2014 HGST, INC. 2

Forward Looking Statement

This presentation contains forward-looking statements that involve risks and uncertainties, including, but

not limited to, the development and adoption of a new storage architecture and the potential introduction

of products based on this architecture. Forward-looking statements should not be read as a guarantee of

future performance or results, and will not necessarily be accurate indications of the times at, or by, which

such performance or results will be achieved, if at all. Forward-looking statements are subject to risks and

uncertainties that could cause actual performance or results to differ materially from those expressed in or

suggested by the forward-looking statements. Additional key risks and uncertainties include the impact of

continued uncertainty and volatility in global economic conditions; actions by competitors, business

conditions and growth in the various hard drive segments. More information about the other risks and

uncertainties that could affect our business are listed in our filings with the Securities and Exchange

Commission (the “SEC”) and available on the SEC’s website at www.sec.gov, including our Quarterly

Report on Form 10-Q filed with the SEC on May 5, 2014, to which your attention is directed. We do not

undertake any obligation to publicly update or revise any forward-looking statement, whether as a result

of new information, future developments or otherwise, except as otherwise required by law. This

presentation contains financial measures defined as non-GAAP by the SEC. We believe that certain non-

GAAP financial measures, when presented in conjunction with comparable GAAP (Generally Accepted

Accounting Principles) measures, are useful because that information is an appropriate measure for

evaluating our operating performance. Non-GAAP information is used to evaluate business performance

and management's effectiveness. These measures should be considered in addition to, not as a

substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. Non-

GAAP financial measures may not be calculated in the same manner by all companies and therefore may

not be comparable.

© 2014 HGST, INC. 3

Market Dynamics

SMR & HelioSeal™

Enable Capacity

Storage is

Strategic

Entering The

Zettabyte Era

Increasing Data Center

Efficiencies

Flash & SSD

Growth

Software Defined Storage

IoT & Big Data

Analytics

~25B Connected Devices in

2015

Evolving Storage

Workloads

© 2014 HGST, INC. 4

Source: HGST analysis based on information obtained on public websites

15TB of Email sent every minute

1.8PB photos uploaded to top social sites every day

~6TB YouTube video uploaded every minute

Cloud

100GB collected by a Boeing 787 every hour of flight time

1TB generated by an oil well every day

1.5TB captured by London subway surveillance every minute

“IoT”

© 2014 HGST, INC. 5

Exabyte Forecast

0

500

1,000

1,500

2,000

2,500

3,000

2012 2013 2014 2015 2016 2017 2018 2019 2020

Exa

byte

Sh

ipm

en

ts

By Market Segment

Mobile Phones

Tablet

Cloud - SSD

Cloud

Personal / CE

Client - SSD/NAND

Client PC

HDDs remain an important element of the storage ecosystem

0

500

1,000

1,500

2,000

2,500

3,000

2012 2013 2014 2015 2016 2017 2018 2019 2020

Exa

byte

Sh

ipm

en

ts

By Storage Type

Tape

Optical

DRAM

NAND

SSD

HDD

26%

CAGR for PB Growth

on HDD

2014-2020

24% CAGR for PB Growth

2014-2020

Source: HGST analysis

© 2014 HGST, INC. 6

HDD Worldwide Unit & PB Forecast

Source: IDC Worldwide Hard Disk Drive 2014 – 2018 Forecast Update Apr. 2014

© 2014 HGST, INC. 7

Enterprise Worldwide Unit Forecast (HDD & SSD)

Source: IDC Worldwide Hard Disk Drive 2014 – 2018 Forecast Update Apr. 2014, IDC Worldwide Solid State Storage 2014 – 2018 Interface Forecast May 2014

© 2014 HGST, INC. 8

Drivers of Storage Growth

Internet of Things (sensor data)

Big Data Analytics

Cold Storage

Web

Social Media

Business Apps Media

Documents

Archives

© 2014 HGST, INC. 9

Internet of Things

The next generation of the internet where

connected objects can interact with each other

and their environment, creating a new wave of

data that will impact every aspect of our lives

© 2014 HGST, INC. 10

New and Evolving Sources of Data

Machine to

Machine

Person to

Machine

Person to

Person

“P2P” “P2M” & “M2P” “M2M”

© 2014 HGST, INC. 11

Fitness Device

Biometircs

Health Monitor

Wearable

Smartphone

Tablet

eReader

Laptop

Camera

Child Location

The IoT is Part of You Today…

© 2014 HGST, INC. 12

Smart Meters

Security System

Smoke/Fire Detector

Wireless Cameras

Lighting Control

Thermostat

Locks

Household Appliances

Bathroom Scale

Exercise Equipment

Connected TV

Gaming

Desktop Computers

…It’s in Your Home…

© 2014 HGST, INC. 13

Traffic Cameras

Road Sensors

Parking Sensors Auto Sensors

Transportation

Engine Sensors

Security Cameras

Security Systems

Fire/Smoke Detector

Digital Signage

Vending Machines

Surveillance Smart Grid

…It’s All Around You

© 2014 HGST, INC. 14

500M Devices

12.5B Devices

25B Devices

50B Devices

0.1

1

10

100

2003 2010 2015 2020

Source: Cisco, HGST analysis

More Connected Devices than WW Population Today…

6.3B 6.8B 7.2B 7.6B

Connecte

d D

evic

es (B

) W

W P

opula

tion

© 2014 HGST, INC. 15

Source: HGST analysis

…Can Drive a New Wave of Data Growth

Internet of Things

Social Networking

Business Cloud

Enterprise

The Internet of Things an increasingly larger part of data stored

2012 2013 2014 2015 2016 2017 2018 2019 2020

HD

D S

tora

ge

(P

B) ~75%

IoT PB CAGR

2014-2020

© 2014 HGST, INC. 16

Transforming multiple data

sources into information and

insights

Characterized by data sets

that are larger and more

complex than typical tools

can manipulate

Big Data

© 2014 HGST, INC. 17

The Need for Hot and Cold Storage

Getting the most value from the “3-V’s” of Big Data requires both

fast storage and increasingly more cost-effective storage

Increasing sources & types of data

© 2014 HGST, INC. 18

Metadata

Extraction

Extract information

Index & Catalog

Linkages &

Analysis

Trends and Links

Predictive Analysis

Contextual

Analysis

External Data Sources

Prescriptive Analysis

Big Data Analytics: Data & Storage Multiplier

Raw Data

Streams

Multiple sources

“3-V’s”

100x - 1000x

Raw Data

10x-100x

Raw Data

2x-10x

Raw Data

Raw

Data

Source: HGST Analysis, Yttibrium Consulting, IBM Investor Briefing 2013

© 2014 HGST, INC. 19

1% Reduction in

Capital Expenditures Oil & Gas

Healthcare

Exploration &

Development $90B

Type of Savings

Big Data Reveals Industry Segment

Estimated Value

Over 15 Years (US $B)

Aviation

Power

Rail

Commercial

Gas-Fired

Generation

System-Wide

Freight

1% Fuel Savings

1% Fuel Savings

1% Reduction in

System Inefficiency

1% Reduction in

System Inefficiency

$30B

$66B

$63B

$27B

WHY BIG DATA MATTERS

Potential Economic Impacts from Data Transformation

Source: GE Report “Industrial Internet” 2012

Even small efficiency improvements enabled through Big Data analytics

can result in significant long-term value

© 2014 HGST, INC. 20

Solutions to unlock the

value of data by making it

more easily accessible with

high capacity, cost-effective

HDD storage

Cold Storage

© 2014 HGST, INC. 21

More Data Being Created than Stored

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

2008 2009 2010 2011 2012 2013 2014 2015

Today’s storage solutions cannot optimally store all of the data created

Exabytes

Data Created

Data Stored*

5X More data

created than stored

“ Data Stored” on all types of storage devices including HDD, SDD, flash, optical and tape

© 2014 HGST, INC. 22

The Cold Storage Opportunity

Primary Storage

“Capacity HDDs

allow me to get to

my data, but I can’t

afford enough of it”

Deep Archive

“Tape allows me

to store more

data, but I can’t

always get to it

easily or quickly”

Accessibility High Cap, Low Cost

Cold Storage

Affordable

Accessible

Dense

and Accessibility High Cap, Low Cost

© 2014 HGST, INC. 23

Data

Acce

ss

Age of Data

Large data sets, access patterns change over time

Data

Acce

ss

Age of Data

Analytics, compliance and audit

Da

ta A

cce

ss

Age of Data

Write-once, Read occasional data

Warmer Storage “Active Archiving”

Lower Latency

Colder Storage “Storing More” Higher Latency

The Many Temperatures of Cold Storage

© 2014 HGST, INC. 24

Solutions for the New Market Reality

SMR

HelioSeal™

Technology

Flash

Acceleration

Software

Virtualization

SMR &

Beyond

© 2014 HGST, INC. 25

Transforming the Data Center

Ultrastar® He6 World’s First 6TB 3.5-inch Helium Drive

Reducing Cloud

Data Center TCO with

6TB 50% Capacity

Boost

23% Lower

Power

Fits

3.5” SMR/

HAMR Compatible

© 2014 HGST, INC. 26

Disk Rotation Helium

Reduced

Flutter

Thinner

Platters

Less

Motor

Drag

4◦C cooler operation

49% reduction in watts/TB

Helium – 7 Disk

HelioSeal™ HDDs: One Year Later

Market acceptance: Deployed in

multiple datacenters

First-generation shipping in

volume

Immersion cooling demonstrations

TCO benefits proven

© 2014 HGST, INC. 27

~40,000

cars of coal

~5 million soccer fields

of forests

~1.5 million

homes in Japan

HelioSeal™ HDDs Solve More Than Storage Problems…

If data centers used helium HDDs instead of air HDDs:

worth of carbon storage saved per year powered per year

Conservative estimates. Not including server, networking and PUE savings.

© 2014 HGST, INC. 28

Why Shingled Magnetic Recording (SMR)?

2014 2015 2016 2017 2018 2019 2020

HD

D C

ap

ac

ity

(TB

)

Capacity Growth (3.5" Capacity Enterprise)

Areal Density Accelerator

Much higher track density

Overall AD growth 25%/Y vs. 15%/Y

65% greater maximum capacity

by 2020

With SMR

Without SMR

© 2014 HGST, INC. 29

Enabling Future Innovation

SMR

HAMR BPM TDMR / MAMR

Foundational Technology

Multi-Generational building block

Reduces risk for future recording

technologies

© 2014 HGST, INC. 30

SMR: More Than a Cold Storage Enabler

Capacity Enterprise

Cold Storage

Mobile

SMR will enable higher capacities across all market segments

SMR

© 2014 HGST, INC. 31

SMR

Ecosystem

Leadership

Leadership is More Than Time to Market

T10 ZBC & T13 ZAC Standards

Leadership + Contributions

HGST investing beyond products for successful technology transitions

SMR HDDs

Linux Open Source Enablement

Contributions

© 2014 HGST, INC. 32

All data is getting warmer:

As data becomes more readily

accessible, it’s value increases

All data is getting colder:

More efficient storage allows

data to be kept longer,

increasing its value

Petabyte Paradox

AND

© 2014 HGST, INC. 33

HDD

The New HDD Reality

MEMORY TAPE

EVOLVING STORAGE SPECTRUM

Cold

SSD

MEMORY TAPE

HDD

HGST is bridging storage needs from hot to cold

© 2014 HGST, INC. 34

Summary

Data center workloads continue to evolve, placing new demands on

the storage industry

As IoT and Big Data develop, they will

drive new innovation and

growth for HDDs and SSDs

SMR and HelioSeal™

are foundational building blocks for future HDDs

HGST is positioned to be a leader in data center storage

© 2014 HGST, INC. 35

Capacity & Trademark Statements

One gigabyte (GB) is equal to one billion bytes, one terabyte (TB) equals 1,000GB (one trillion bytes),

and one petabyte (PB) equals 1,000TB (one quadrillion bytes) when referring to hard drive or solid state

drive capacity. Accessible capacity will vary from the stated capacity due to formatting and partitioning of

the drive, the computer’s operating system, and other factors.

HelioSeal is a trademark of HGST, Inc. and its affiliates in the United States and/or other countries

HGST trademarks are intended and authorized for use only in countries and jurisdictions in which HGST

has obtained the rights to use, market and advertise the brand. Contact HGST for additional information.

HGST shall not be liable to third parties for unauthorized use of this document or unauthorized use of its

trademarks.

All other company names, products or trademarks used in this presentation are the marks of their

respective owners, and not HGST.

Q&A