Western Digital is evolving new concepts of data storage, to integrate with the emerging systems. This includes data storage for CCTV cameras used for traffic and other surveillance. These new concepts take less space and work more efficiently. Vivek Tyagi, Senior Director, Worldwide Enterprise Sales, Western Digital, discusses some of these concepts with us in this exclusive interaction.
What is your sales model?
We do marketing, we do PR directly, we do large enterprises, create awareness about our testing, moving concept, etc. Sales are going through distributors both in retail space and the enterprise, that's the sort of the model of the company and business orientation. Besides sales marketing in India, we also have very large global engineering sales. Currently, we have roughly around 2700 members working towards R&D in our Bengaluru-based centre. Globally, Western Digital revenue is approximately 16-17 billion dollars range in a year. By revenue it's one of the largest storage companies in the world. And post-Sandisk acquisition, it's the only company which also makes the hard drive and also makes flash. We started an application like PC, laptop, hard drives are getting replaced by flash drives. That's why PCs are becoming so thinner and portable.
I would like to know about your work in video surveillance
City municipal corporations, traffic police and general police are either installing their own CCTVs in the big cities, are forcing residential societies, forcing schools, forcing retail malls to have more and more video surveillance and keep that CCTV footage anywhere from 30 days to 90 days period, so that if any incident is reported, they can go and look at that CCTV video footage and basically act on it.
This 30 to 90 days of CCTV video storage is what is making this segment interesting to us, because among all the other types of data when you store CCTV video occupies the maximum storage. That is well known to us. Because of this, the storage need within the CCTV video surveillance is growing rapid and we are one of the leading hard drive manufacturers as you know. This has created a special hard disk drive that goes into video recorders, or digital video recorders where this camera feed goes in records at a local point. And then across all the cities all these feed go into centralised storage, so that's where we provide the storage. That's our interest in the centralised CCTV storage. Then after Sandisk acquisition, as you know we also have the micro SD cards for mobile phones.
Now in the past in video surveillance cameras were analog cameras but now all the cameras are called digital cameras and they are connected to Ethernet network just like we have LAN network in the office where we can plug our PC seamlessly all the network all the products. So, what happens is if for any reason if power fails, or network link breaks, then the recording of that CCTV stops, the satellite service. That time you don't want to lose the video because incidents can occur at that time or somebody can cut the cable and then do the incident and basically run away. So because of that all the IP cameras or all the network CCTV cameras which have been deployed they have a slot to put micro SD card for local storage. So normally they are not continuously recording in the card because cards have smaller capacity like 64, 128, 256 Gigabyte capacity. But the cards are put in such a way that in case the network gets disconnected and the recording gets stopped in the main server then the camera starts to record in the local micro SD. So local micro SD card can record anywhere up to 24 hours of video footage and if you need you can pull out the and then it rewrites. Once a 24-hour recording is done it rewrites it. So that's another area of interest to us. So as a company we have created a special micro SD card for CCTV video surveillance cameras.
What is the capacity of this card?
The popular capacities are 64 GB and 128 GB. That's a good point you brought up. In a mobile phones what happens is so flash memory has a characteristic. These cards are made using flash memory for storage. Flash memory has a characteristic by nature of its physics that more you write to it has a certain life time how many times you can write to it and erase that. It has a limited range. So in mobile phone what happens is you are writing very limited amount. You are storing numbers, SMSs, Whatsapp messages. CCTV Video is one that takes more but how much video you store. You don't write and erase that often in the micro SD card for mobile environment. Mobile micro SD cards are designed for 100 cycles of write and erase and with that it's sufficiently last for four five years. Now in a video camera what you are doing is high definition camera will fill the card in 24 hours.
That means every day you will have to erase and write; in one year in 365 cycles if the cycles are 100 times you can write the card will be dead in six weeks. So because of that we have designed a specific part it's called Western Digital or WD purple card. It's like color coded for ease of remembrance by channel partners and everybody. This is designed for 1000 cycles of write and erase. So we have two cards to versions of this product there. One is comes with 1000 cycles which is more for retail consumer, homes segment. Other comes with 3000 cycles of write and erase that we sell to camera OEMs. If they are putting the card and supplying it in a smart city project and guaranteeing five years of operation and they need higher reliability card. So these are specially designed cards for video surveillance.
I would like to know more about your system integrators, how are they integrating cards and storage drives?
One example I will give you is the government company called Bharat Electronics (BEL) in Bangalore. And then another large system integrator is L&T. So L&T is big system integrator in smart city, well known system integrator because L&T also does as you know construction. So in smart city tender it's not only video surveillance you have to build flyovers, you have to look at water maintenance. So many activities. So companies like L&T are big system integrator and BL is also very active in video surveillance system integration. So usually these people draft the specification and then they call vendors like ours. They take our hard drives. They take our cards depending on whether it's five year warranty requirement or three year they choose 1000 cycle cards, or 3000 cycle card and then we supply to system integrators. Then BL for example recently there is a tender by Delhi PWD who installed video surveillance cameras in all Delhi government schools.
I have the tender from BL system integrator. Now we will work with BL they decide to buy from us, they will buy from us storage and then they will buy cameras from some camera vendor. Then they will buy networking equipment all these Ethernet cables and everything and then they will hire 100-200 engineers, the will deploy it in Delhi PWD where they have to or maybe they will have contractors to that location where the cameras will be installed. So system integrator does the final installation commissioning and they maintain the whole setup for next five years. They will only come back to us if there is a failure in components or if they have any more requirements. So that's how this whole thing is working.
Do you directly supply to the system integrators or do you supply to the channel partners and they supply to them?
Actually the answer is both. If it is a large system integrator we are already in touch with them. Then we supply directly to them to the distributor. But we cannot deal with very small requirements system integrators so if there is a apartment housing society let's say only need 50 cameras or 150 cards or 100 cards in very small then they will have a very small system integrator then we would typically go by the channel partner. But if it is a large camera OEMs or large system integrators then we are regulating to supply directly.
You supply your products in both ways, with channel partners also and through your directly contact to the end user
It depends on the volume and business etc. But channel partners are important, because our reach is also limited to very large places. In every city in every housing society we don't have reach. So there we depend on channel partners.
Do you want to expand your reach?
Definitely, slowly we want to expand.
We began our discussion with reference to enterprise. Larger enterprises also have lots of data to store. And now they are migrating to cloud. So do you think that you are contributing to that?
Absolutely, we are contributing to that so if you go back a little bit in the history 5-10 years back every enterprise had his own storage, his own server, his own email server all the IT infrastructure was managed and owned by them. Then 5-6 years back cloud service as a concept was started by Amazon, Amazon Web Services. They said look I am putting a massive IT infrastructure of football field size and then you pay me the monthly rental and use my infrastructure. You don't have to, that's how cloud service started. Now the guy who is building that cloud infrastructure also needs services so they eventually now have become our biggest of customers. All these people, when they build the new data center they have to install let's say thousands and thousands of servers and put thousands and thousands of hard drive storage in that or flash drive they have to buy it from somewhere. And Western Digital is one of the leading flash and hard drive manufacturers in the world. Cloud service providers, cloud companies are actually our very large customers in the world and in the past we were not selling directly to enterprises we were selling more to storage and server OEMs like HP, Dell, EMC, Lenovo; these are OEMs of server and storage.
They were buying our drives and they were making the whole box and selling it to enterprise. But now certain types of enterprise like small and medium enterprises they are finding it more lucrative to move to the cloud because they don't have to deploy capital expenditure. They can pay OpEx versus CapEx. Then there is a new breed of internet enterprises in India, U.S., China, anywhere let's say e-commerce companies or other travel portals whose business is built around internet they are building their own IT infrastructure in a very unique way so that it can take care of their performance requirements because in online business if your website is slow customer will run away to the next travel portal to buy his tickets right? So these guys are not dependent on server storage OEMs so much now. They are trying to put together their own IT infrastructure. So again those types of internet economy companies are our very good customers because we provide storage at a very cost effective price directly to them.
What is the format of the storage?
This storage comes in 2-3 different formats. One format is called enterprise hard drives or enterprise flash drives. So they are 3.5 inch or 2.5 size in all the servers that they buy they have slots to put these drives in. So, they would buy servers 12 drive slot or 24 drive slot etc. from any standard OEM or Manganese or Chinese OEM and then they can buy these drives from us, put it over there and build their storage. That's one format. The other format is some company needs let's say 1000s of drives so buying 100s of server of 12 slot is not a viable option to them. So we have started to build storage boxes that can accommodate anywhere from 60 to 100 hard drive in one box.
In data centre there are racks where you put servers. Those racks each height is defined as one unit rack so our boxes come as three or four unit rack box. And you can put many of them. In 4U box you can put 100 drives. And each drive is 14 Terabytes. So 14 x 100 is 1400 Terabyte in a four unit box.
How important are channel partners for you? Because you are also selling directly to customers
In my enterprise business we still have direct customer connect with large customer but in the retail side everything is through channel partners.
And what is the reception of these new types of storage formats that you have evolved in last one year across different sectors across enterprises?
I would say in India, two areas where we have been very successful. One is internet economy companies, companies whose business is built around internet. They are like new age companies. They are startups, some of them are ten year old startup. They love this because their business is built around data. They do so much analytics. They don't want to throw any bit of data whether it's useful or useless they keep everything. So e-commerce, travel portals, I will give you an example of Paytm, I can't name my customers but like Paytm, likes of Flipkart, all these companies they have been very successful to this type of business. The other area where we are very successful is cloud service business. In India also you have local companies which are cloud service. They are very successful. Next we are looking at telecom operators because government has mandated that all telcos to have customer data for seven days. And all of them now, only three are remaining, three telcos are remaining after so there 300-200 million subscribers. So we believe that all kind of them huge amount of data and they would be keen for new formats and new technology.