In the culture of now, it is easy to forget that sometimes, it takes time for deals to go through. It takes time whether you’re referring to four months of negotiations for one of Bright Side Network’s business units to land an automotive electronics deal, AMD acquiring ATI, AMD spinning off its manufacturing division (does anyone recall MAD AMD and DAAMIT?), or Intel canceling Larrabee, only to bring it back in the form of a 61-core silicon that features limited compatibility with the x86 instruction set (no x87, no SSE). However, just like Seagate’s privatization deal went the way of the Dodo bird, it takes time from breaking a story to actual completion of a business deal.

People who don’t understand that will never understand the basic principles of investigative journalism, for which we take special pride on this website. Sometimes, timings do go wrong. Last Friday, we ran a news story on the rumored acquisition of OCZ Technology and Seagate Technology. The story was originally brought to light by Fuad "Fudo" Abazovic of Fudzilla, formerly a colleague of mine from our days with The Inquirer, a controversial publication that broke more news stories in the world of IT than any other (such as the Compaq acquisition by HP). Today, The Inquirer is a shadow of its former self and a stark reminder that if key people leave a company or are pushed out, it can have devastating results.

As you can read in our original report, we stated that:

"The rumors that OCZ Technology is being acquired by Seagate raised quite the steam last week, sending the stock soaring up. We can now report that according to sources close to heart of the matter, the deal is done.

Leadership of Seagate Technology did not enjoy the past 18 months or so. The company tried to go private in an effort lead by TPG Capital and their partners, but failing to acquire SandForce and more importantly, failure to understand the intricacies and the importance of Solid State storage lead to more than one backer leaving the privatization bid. We exclusively reported about the matter, while the company admitted they’re not going private in a statement released in the following weeks."

After the market closed on Monday, Seagate announced that the company missed market expectations. Revenue for the fiscal fourth quarter 2012 (ended June 30th, 2012) reached $4.48 billion with a net income of $1.06 billion. However, investors punished the stock, dropping it down by almost 8% in after hours trading. For the whole fiscal year 2012, the company reported record revenue of almost $15 billion, 27% higher than in the year before (before the acquisition of Samsung’s hard drive business). Those $14.94 billion in revenue were enough to report an annual net income of $3.11 billion or $6.72 EPS (Earnings Per Share). The company’s assets in cash and cash equivalents reduced from $2.67 to $1.71 billion, while the company still has $2.86 billion in long term debt.

As such, we expected an interesting conference call and one of first things that we noticed was that Kenneth Massaroni, Executive VP, General Counsel and Chief Administrative Officer (CAO) was missing from the call. While most of analysts were tip-toeing around the issue of whether or not the company will acquire OCZ Technology, the question finally came up. According to Reuters, on that direct question Chief Financial Officer Pat O’Malley stated that Seagate Technology "would be interested in buying an SSD maker that has a "significant" share of the enterprise market." Furthermore, Pat stated that "We don’t do any comments on official policy on M&A until it’s done," ending the discussion about the upcoming acquisition of a strong player in the booming Solid State market.

This is as close as it can get to admittance that the company is looking to acquire a Solid State company, and it is not hard to guess which companies are on the short list, and which ones are not. Just like Western Digital, Seagate is pressured by the lack of of a viable strategy on the Solid State Storage front. In order to address that, the company re-hired Gary Gentry. Gary returns to Seagate following his stint as the head of Enterprise Solid State Drive Business at Micron Technology, and that’s the role he will be taking at Seagate as well. While the official line was that Seagate was happy with their relationships with Samsung and Densbits, we believe the company is preparing for a serious investment in solid state storage.

Seagate's Pulsar drive failed to meet the expectations

Seagate’s Pulsar drive failed to meet the expectations for a leader in conventional storage technologies

Seagate’s recent experiments with Solid State storage, especially 2.5" SAS drives weren’t successful, especially when taking into account that the company recalled the initial batch of SAS drives, which reportedly operated at 90 degrees Celsius e.g. 195 degrees Fahrenheit. We had one of those drives for testing and it was not fun running a CPU cooler to cool the product down. Before the drive was recalled, we tried testing it in Western Digital’s 3.5" aluminum enclosure for its VelociRaptor drives, and it still required active cooling.

Thus, the wheels are turning and the acquisition of the strong player in the solid state arena is imminent, but the question remains – how long will it take to wrap up what our sources told us was already wrapped up. Bear in mind, our sources were dead on when it came to the failed privatization of Seagate, so we’ll give them the benefit of the doubt.