Seagate: Ripple Funding Shows We're Serious About Blockchain Tech
A desire to become an "active participant" in the blockchain technology space is what drove $13bn data storage company Seagate to invest in Ripple Labs, according to its senior vice president Dave Morton.
A leading maker of hard drives for desktop PC and laptops as well as servers and data centers, about half of Seagate's current value, according to Forbes, is due to its successful transition to enterprise cloud products.
However, in an interview with CoinDesk Morton revealed the logistics of moving and shipping these products are currently outdated when compared to the company's more modern product offerings.
"Our supply chain is very broad. There's over 286 components that go into each of our drives, we pull over 51 elements out of Mother Earth and obviously we manufacture in a lot of foreign locations where there's a lot of exchange risk."
The difficulty of managing this development process is what makes the "Internet of Value" made possible by Ripple Labs appealing, he added.
Founded in 2012, distributed payment network provider Ripple Labs uses the Ripple protocol and its own native digital currency (XRP) as a way to move money internationally. The company recently came under fire for wrongdoings in its early days, paying part of a $700,000 fine for FinCEN violations.
Today, Morton doesn't believe that Ripple's technology is ready for Seagate to use, but he argued that due to this enormous potential, his company was eager to participate in its $28m Series A fundraising announced this week.
"To be able to move our operational cash globally in a free way that is transparent is very important to us," he said.
The round included a notable cross-section of Asian and US investors, including IDG Capital, China Rock Capital and AME Cloud Ventures. Seagate funded only one company, Reduxio, in 2014 and Ripple is its first investment in 2015.
Blockchain use cases
Seagate's business model would seem to lend itself to two popular use cases for blockchain technology: the ability to move payments and the ability to track the positioning of supply chains, as seen in California-based startup Skuchain.
Morton sees Ripple's platform as one that would let Seagate keep an eye on the development of both use cases, maintaining both are "very interesting".
"We have 3 million components a day in flight, so you can just imagine the power that this can possibly have down the road from a supply chain perspective, whether that be cash flow or economics," he said, adding:
"We process over hundreds of thousands of invoices a quarter, you get into the process of how this improves the supply chain, it's pretty remarkable."
When asked why Seagate wouldn't yet seek to use the technology, Morton suggested that the murky legal status of blockchain technology around the globe was a deterrent.
"Obviously we would like to be a key user. We'll work with the proper authorities and companies and our own providers, our banks," he remarked.
Ripple and bitcoin
Morton also touched on why, in his opinion, the "agnostic" nature of Ripple has a competitive advantage over the bitcoin network.
"You can do commodities, dollars, yen, euros versus it being just bitcoin. We want to take more of a holistic approach," he said, adding that he remains a fan of bitcoin.
In this light, Morton said Seagate remains primarily interested in seeing whether blockchain technologies can help solve real problems for its business, whether that solution comes from a provider like Ripple Labs or an alternative.
"Reduction of friction, this is the immediate need within our space," he explained. "As we get more and more global, this is going to be something that folks are very interested in solving."
"We're serious about some of these use cases being thought about and resolved. We think there are some technology and business gains to be had."
Dave Morton image via LinkedIn
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