XYRATEX TECHNOLOGY LIMITED

Xyratex is the leading storage systems supplier, known for their high quality and low prices.

Business Model

Continuously making new developments on a large scale joining forces with other large global names such as Seagate, Fujitsu and NetApp, their partner program has helped gain confidence and trust and continues to prove their commitment to leading technology (Xyratex, 2009). Xyratex had a hugely advantageous start, being a part of IBM; they already had a successful team. They have many on going relationships with customers who have helped develop their understanding of customer needs and improve products, showing their continuing support and development (Yahoo!, 2009, para 4). Their high energy efficiency is one of the best in the industry, developing greener products which use advanced cooling techniques and consume only half the power at double the performance (Bite and Switch, 2008 para2).

Only 2 years after they were founded, they acquired another storage company from the US strengthening their presence, and also formed a bond with Singapore, becoming the largest and most experienced provider in their market (Business Wire, 1996, para 2). They also have strong investors, such as HgCapital, which believe in their capabilities and support the developing of Xyratex’s technical expertise in developing new products, which helped them to expand their company (Press release 2004). They have managed to find a niche in the market, which was recently competed for by Dot Hill, (Computergram, para 11) although a smaller company, with a market value of $30.05M compared to Xyratex’s $70.71M, (Xyratex Competitors, 2009) this competition meant they had to lower prices, which is bad for business, but it was important as NetApp this year has provided Xyratex with almost half of its revenue the loss of being their sole provider would be disastrous. (Computergram, para 8, 2009)


This image, from their website, of their relationships I can see that they are highly dependent upon their own developments, this shows that they are important for all their customers as they would not obtain the same products anywhere else, they have managed to isolate the areas which are needed to be improved and have developed leading technology which they are able to use within products in the customers’ markets.

Corporate Structure

This UK based company is well established in the US, Europe and Asia, as these are the main regions that are developing the fastest and are the richest, with many reliable, successful partnerships around the world. Working with over 50 A-list companies, Xyratex ships over 14% of the world's external storage capacity, and 75% of all 3.5" drives are processed using Xyratex test systems (LinkedIn, 2009). The main locations used are San Fransisco Bay Area, and Portsmouth, some of their smaller locations are in California, Florida, and Southampton. This enables the company to have a wide spread of areas where they can sell and produce their products, which I think is a very strategic choice, as it means they get a larger market, as it would be easier for American companies to get products delivered from San Fransisco rather than Portsmouth, and also less expensive for postage costs, which will also help with keeping their products at reasonable prices. The Company employ 1800 people, and with 30% of workers with over 25 years research and development experience, their strong leadership focuses their development into specific areas that can be further improved as they have the unique knowledge and a comprehensive understanding of each of their customers' specific needs, which keeps them ahead in the technology race by providing the best specific storage solutions. (Xyratex Brochure, 2009, para5).

Market Value

The market value of Xyratex today is $67.46m however it was only at $61.45m a week earlier, which shows that at the moment it is increasing. The company had an all-time low on February 2, 2009 of stock prices, but since then they have risen by 54% (Financial Times, Xyratex, 2009) this however is of little comfort when the company has a percentage change for its share prices at -87.61% . (Digital Look, 2009)

However, from this graph it can be seen that Xyratex did very well in the early years, however since the end of July 2008 they have dropped dramatically in their share prices as well as their revenues (Xyratex Investor Relations, 2009) and I would link this to the recent economic crisis however they have made some sacrifices which should benefit them in the long run and when the economy settles I expect they are a company which will be highly sought after for their new developments and cheap products which are becoming higher in demand as technology and the public embrace into the current, ever evolving technology based era we are living in.


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References:

-Bite and Switch, Xyratex Scales Down for Green Storage, (2008) retrieved April 3, 2009.
http://www.byteandswitch.com/document.asp?doc_id=150035

-Business Wire, Xyratex acquires Zadian Technologies Inc.; strengthens U.S. presence and broadens leadership in..., (1996), retrieved on April 4, 2009.
http://www.allbusiness.com/company-activities-management/product-management/7222185-1.html

- Computergram (2009), NetApp deal, retrieved March 28, 2009.
http://www.cbronline.com/article_news.asp?guid=65174516-7550-4D1D-A6B2-C94F42B3C721

-Digital Look, Xyratex Share Price, (2009), retrieved April 4, 2009.
http://www.digitallook.com/companyresearch/131532/Xyratex_Ltd._-_Common_Shares/share_prices.html

-HgCapitalTrustplc Press Realease PDF, (2004) retrieved April 3, 2009.

-LinkedIn, Xyratex, (2009), retrieved on June 2, 2009.
http://64.74.98.80/companies/xyratex?goback=.con-*3conbro*40*4*051*4false*4*02*44125

-The Financial Times, (2009) [online] Xyratex Markets Data, retrieved March 27, 2009.
http://markets.ft.com/tearsheets/performance.asp?s=XRTX%3ANSQ

-Xyratex Brochure (2007), retrieved March 28, 2009.

-Xyratex, Company Overview, (2009), retrieved March 27, 2009.
http://www.xyratex.com/company/default.aspx

-Xyratex Investor Relations, Xyratex News (2009), retrieved March 28, 2009.
http://www.xyratex.com/company/news/Detail.aspx?ID=249

-Yahoo! Finance, Xyratex competitors, 2009, retrieved April 4, 2009.
http://finance.yahoo.com/q/co?s=XRTX

-Yahoo! Support for Seagate, (2009), retrieved April 4, 2009.
http://finance.yahoo.com/news/Xyratex-Is-the-First-to-prnews-14509069.html