Seagate's Mirra Acquisition: Smart Move

Seagate has just widened its consumer storage product line by acquiring a company called Mirra. That was a smart move, says BusinessWeek Online's Arik Hesseldahl.
Olga Kharif

My colleague, Arik Hesseldahl, is guest-writing on my blog today. Here's what he thinks about Seagate's latest acquisition:

"Storage giant Seagate made a move to widen its consumer storage product line by announcing it has agree to acquire privately held Mirra, the company behind a line of network-connected hard drives aimed at consumers. Mirras boxes connect to home routers and back up data from personal computers, and then allow customers to access that data remotely via the Internet. Financial terms weren't disclosed, but the buy shouldn't make much of a dent in Seagates $1.8 billion cash position. Mirra, which had been backed by venture capital firms VSP Captial, Sunrise Capital and Sequoia Capital, has 34 employees and was founded in 2002 by Tim Bucher and former vice president of hardware design at Apple Computer and one of the original engineers behind WebTV, now part of Microsoft.

What will Seagate do with Mirra? "We acquired it for its vision," says Brian Dexheimer, VP of Segate's storage business. "We love the existing product line and we see tremendous opportunities to expand its reach and breadth. Over time we expect to scale up the Mirra platform to different types of services. We have some pretty high aspirations for what we can do."

And what they might be able to do is considerable. Seagate sold about $7.5 billion worth of hard drives in the year ended July 1, but the potential that an ever-increasing stream of consumer gadgets holds for storage companies is improving all the time. With consumers building an ever-bigger stockpile of precious personal data -- particularly digital photos and personal home movies -- they're increasingly just a hard drive failure away from losing precious data. But given how precious photos are, its a little scary to find out that people aren't as careful as you might think about backing up their pictures to something other than the hard drive of their primary personal computer. One study by InfoTrends/CapVentures, a market research firm that focuses on the photography business, found that only 59% of consumes make backup copies of their digital photos, but that less than half make backup copies of those backups.

Photographers in particular have come to like Mirra's products and service, and tend to like its automated nature. Backing up big blocks of data is a big chore, but as I learned recently when the hard drive on my laptop failed, once you lose a big batch of otherwise irreplacable data, you'll wish you had gone to the trouble. With consumers more interested in the fun side of gadgets like music players and digital cameras, convincing them to get serious about data backup may seem like promoting better dental care on Halloween. But you get real serious about it after seeing the business end of a dentist's drill. I wish Seagate luck.

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