Industry Trend: Five year HDD (hard disk drive) warranties

I received a note from Seagate the other day (they requested that this be embargoed until today) about changes to their warranty program for their various disk drive products.

Now I get a ton of updates, press releases, briefing notes and other news from vendors, resellers, industry trade groups and public relations folks among others every day (and thats in addition to the spam), all of which help to fill up my hard disk drives and backups stored on removable hard disk drives faster than the hard disk drive on my HD-DVR fills up from HD programming.

However this note from Seagate stood out and I want to share with you my industry trends and perspective. That is, this IMHO signals the realities of how long different storage technologies are used before being discarded (e.g. lifecycle or useful life) as much as what the reliability and endurance of the products is which I explain a bit further down in this post.

So here’s what Seagate is doing and draw your own conclusion and see my additional perspectives and opinions below.

Seagate Warranty Change

Overview
Seagate’s leadership in product quality and reliability has given it an edge in offering customers better value when they need it. Seagate’s current 5-year limited warranty will remain in place for consumer retail products as well as for enterprise-class hard drives, and we will now provide our distributor customers with a 3-year limited warranty for all other hard drives. Based on our data, we know that 95% of all returns take place during the first three years, so by offering a 3-year warranty (which Seagate believes is more in line with the rest of the industry), we can make other aspects of our customer support and warranty programs more attractive with negligible impact to customer product return needs. The 3-year limited warranty on notebook, desktop and consumer electronics bare drives offers new advantages and enhancements to the business proposition for our channel customers while improving cost efficiencies for Seagate. We expect little, if any change for consumers since hard drives used in computer systems other devices are covered by the individual manufacturer’s warranty.

Warranty at a high level:
3-year warranty – Seagate Desktop, Notebook & Consumer Electronics drives sold to customers
5-year warranty – Seagate enterprise drives and certain Seagate and Maxtor branded retail products (both consumer solutions and HDD retail kits)

Q&A

Q. Does this change effect products sold to OEMs?
A. No, there are no changes to our OEM standard warranties in these classes of products

Q. When does this change go into effect?
A. It will begin January 3, 2009

Q. What about products purchased before Jan. 3, 2009? Will Seagate still honor the warranty in place at time of time of original purchase?
A. Yes, any customers who purchase products prior to Jan. 3 will be covered by the warranty in place at the time of purchase.

Q. Why is this change being made now?
A. We have identified the opportunity to offer our customers warranty terms that we believe are in line with industry standard warranty offerings, and that better align to the requirements of our partners and customers.

Q. You say that by moving to a 3-year warranty you can make other aspects of customer and warranty support more attractive. Can you be more specific?
A. Seagate believes that enhancing the declining credit scale in the second year from 75% to 100% will provide customers better value on returns. This means that if a customer returns a drive in the second year, they are eligible to receive a credit, equal to the drive’s price at the time the drive is returned, applied to their replacement drive.

Q. Why are Enterprise-class hard drives still receiving a 5-year warranty?
A. Seagate believes the standard industry warranty for enterprise-class products is 5 years.

Q. Will customers in other countries receive different warranty periods?
A. Customers located in India, Pakistan, Sri Lanka, and Thailand will continue to receive a 5 year limited warranty for selected products.

Q. Why will customers located in these countries still receive a 5-year warranty?
A. In these markets we have determined that business conditions support offering a 5-year warranty period.

Q. Isn’t this a step backward in terms of demonstrating your confidence in the quality of your products?
A. Absolutely not. Our product quality remains excellent, and, as the worldwide leader in drive storage, Seagate is committed to providing our customers with the most reliable storage solutions available anywhere. We know that 95% of all returns take place during the first three years, so by going to a 3-year warranty (which is more in line with the rest of the industry) we can make other aspects of our customer support and warranty programs more attractive with negligible impact to customer product return needs.

Q. Are there exceptions to the 3-year warranty?
A. If a customer believes there is a competitive business case for an exception, they can present their business case to Seagate for review.

Q. What will happen to the inventory authorized distributors currently have?
A. On-hand inventory located at the sites of Seagate distributors will keep the warranty in place at the time of original purchase. The 3-year warranty will apply to products shipped starting Jan 3rd, 2009.

Q. Does this change affect Seagate and Maxtor retail products?
A. Retail drive products will continue with their current 3 or 5 year limited warranty

So what does this all mean?

IMHO, this signals that Seagate is aligning their warranties for different products to the market realities including the life cycle of the product or solution before replacement for what ever reasons. For example, an enterprise class disk drive deployed in an enterprise class storage system may be deployed for a period of from 3 to 5 years, perhaps initially being deployed as primary storage for a couple of years, then being redeployed in a secondary or hand me down role.

Or, in the case of an archive or secondary near-line role, being used for a longer life cycle than would be the case with more traditional storage. It can also signal that many organizations are acquiring and holding on to in general technologies for longer periods of time to maximize ROI and minimize the occurrence of timely and expensive data movement/migration to support technology replacements.

Certainly in general the technologies are much more reliable than previous generations, capacities are increasing as are availability and capacities while power consumption and footprint also improve, not to mention the continued need for more storage and I/O processing capabilities.

On the flip side, non enterprise storage type solutions for example desktops, laptops or other products tend to have shorter lifecycles and thus make sense to align the warranties with the market economic and buying habits taking place not to mention competitive alignment.

Needless to say, despite reports that the magnetic disk drive is now dead at the hands of FLASH SSD (here and here among others) after over 50 years of service, its safe to say the magnetic disk drive will be around for several more years to come as FLASH based SSD will actually help to keep disk drives around, similar to how disk drives are helping to keep magnetic tape around by taking over tasks and enabling true tiered storage and technology alignment to occur.

Heres a link to Seagates Warranty page for more information.

Ok, nuff said.

Cheers gs

Greg Schulz – Author Cloud and Virtual Data Storage Networking (CRC Press), The Green and Virtual Data Center (CRC Press) and Resilient Storage Networks (Elsevier)
twitter @storageio

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