I discussed fragmentation last year (here) when [...] ]]> I was asked again this week whether defragging of hard drives on Windows servers is really necessary. This is quite pertinent as the cost of deploying an enterprise-wide defrag tool can be significant and any opportunity to save money has to be a good one.

I discussed fragmentation last year (here) when looking into a problem which turned out to be the lack of free space consolidation. however I didn’t discuss the potential performance impact.

So, reflecting on whether defragmentation is required or not, I’d say that in most cases the benefits are minimal. Here’s why…

Firstly, hard drives have on-board cache; the larger and more “enterprise” the drive, then the larger the cache. We are also likely to see more and more hybrid drives on the market, which will have large amounts of fast memory fronting access to the old moveable components. Cache will mask the impact of fragmented files during writes as data will be written to cache and confirmed as written by the drive. The data can then be written to disk asynchronously afterwards. Obviously if cache becomes overrun, then the benefit will be negated.

Second, operating systems have built in file system performance techniques, including lazy writing and file prefetch. These features will try and minimise the latency issues of reading and writing to disk.

Third, if the data being accessed is a database, the database itself will also have lazy writer processes to asynchronously write data to disk.

Now all of the above applies directly to “traditional hard drives”. In systems which have RAID controllers with onboard cache, then the issues will be less. Where storage is taken from a SAN with an enterprise or modular array, all reads and writes will occur through cache, giving the best options for performance and masking the underlying hard drive mechanics.

So, can fragmentation actually help? In fact, I have seen one instance when this occurred and it required slightly special circumstances. The file system was made up from a number of concatenated LUNs using a volume manager. As the server had multiple CPUs and the storage was SAN connected, then multiple I/Os could be issued to the volume. With more fragmentation, then the I/Os are spread across all of the LUNs and performance was increased.

** DISCLAIMER: This and related blog entries are for fun only and do not represent investment advice. You should make your own opinions on investments or consult a financial adviser **

Background

Seagate’s main business is the manufacture [...] ]]> This is the first of a series of posts looking at storage companies and their investment potential.

** DISCLAIMER: This and related blog entries are for fun only and do not represent investment advice. You should make your own opinions on investments or consult a financial adviser **

Background

Seagate’s main business is the manufacture and distribution of hard disk drives. The company was founded in 1979 by Al Shugart and Finis Conner. Shugart is regarded as the father of modern hard disks, being involved with the teams that invented both the first hard drive at IBM in the 1950′s and with inventing the floppy disk. Today, Seagate offers products for business and consumer markets including the latest portable devices. These range from 8GB 3600RPM Compact Flash drives to the sixth generation of the Cheetah drive – a 15K RPM drive with 450GB capacity.

Market Details

Seagate is quoted on the NYSE with the code STX.

Shares outstanding: 528,788,000
Market Capitalisation: $14.55 billion
Earnings Per Share: 2.28c
P/E Ratio: 11.82
Yield: 1.45%

* figures from http://www.nyse.com/ on 29 October 2007.

These are lots of interesting numbers, but what do they mean? I’ve linked to Wikipedia entries which explain what most of the important terms are.

The P/E Ratio gives a good idea of how fairly valued the shares are. It is a ratio of the price of the shares compared to the earnings of the company, therefore the lower the number, the better. For comparison, here are a few more P/E ratios; Netapp – 28.79, EMC – 39.03, Google – 47.4, Brocade – 17.67. Seagate therefore seems low, but P/E can’t be looked at in isolation. Higher P/E ratios may indicate a company with potentially higher future growth prospects. I would say that Seagate’s business is purely incremental growth as they are not likely to be bringing a new product class to market or radically changing their business model.

Yield indicates how valuable the last dividend was as a percentage of the share price, so at 1.45%, the return on $100,000 of stock would be only $1450 per year. If dividends were the only reason for investing, it would take 69 years to return your investment! Obviously Seagate is declaring dividends, so value in the shares is being realised in both capital appreciation and dividend earnings.

Competitors

The hard drive industry is small. In fact Seagate recently acquired Maxtor (although the brand is still retained) and made the industry smaller. The major competitors in the hard drive market are Hitachi Global Storage Technologies (which is a combination of the Hitachi and old IBM storage businesses) and Western Digital. HGST and Seagate together own the market for 15K Enterprise (FC) drives.

Outlook

The hard drive market is continually challenged to increase capacity, improve performance and reduce the power and cooling demands of hard drives. All manufacturers are innovating to get ahead of the competition, however most advances seem to be small steps rather than giant leaps and so no one vendor in the market stands out as having a big competitive leap over the others. It is certainly true to say that the hard disk has become a commodity item.

As a technology leader and considering the future demand for storage (which shows no signs of diminishing), Seagate is set to continue to grow their business. At this stage whether Seagate will form part of my virtual portfolio, only time will tell, however I would say that one HDD vendor will be there.