Reinsel said consolidation in a commodity marketplace, like hard disk drives, is usually a good thing in that it helps bring stability.

There are several forces driving the need for consolidation in the HDD market, including slower product cycles made necessary because vendors can't squeeze more capacity onto a single platter as fast as they used to.

"With more competition, pricing worsens," said Brian Babineau, an analyst with research firm Enterprise Strategy Group. "On the demand side, there is significant competition from flash within the PC business accelerated by the transition to tablets. Enterprise storage systems now include SSDs and other flash-based technology. With lack of differentiation on the supply side coupled with threats to the demand side, this industry was ripe for consolidation"

Both Western Digital and Hitachi GST have been profitable, with Western Digital in the black since 2001 and Hitachi GST profitable for the past couple of years, according to Steve Shattuck, director of public relations for Western Digital. "Between the gains in management and global talent, we feel we can enhance our product scalability and therefore maintain profitability," he said.

For example, Hitachi GST's CEO, Steve Milligan, will join Western Digital as president, reporting to its CEO John Coyne.