The Rebirth of Overland Storage
It’s been a long, strange trip for Overland
Storage Best known in recent years for the tape backup libraries it sold through
Hewlett-Packard, Overland is in the midst of an iSCSI-focused
renovation at the hands of former Snap Appliance and Data Robotics execs.
Could this reboot breathe new life into Overland as well as the SMB storage
market it is focused on?
Snap and Overland – Hot Potato
on a Sinking Ship?
The future of Overland is tied to Snap
Appliance, makers of entry-level network-attached storage (NAS)
systems. Current Overland CEO, Eric Kelly, snapped up the company in 2002 for
just $10 million, quickly flipping it to Adaptec for $100 million. But the
storage system market wasn’t right for the controller maker, so Kelly stepped up
and directed Overland to repurchase Snap in 2008.
With Overland running a reported 70% of its
business through Hewlett-Packard, that company’s decision to switch suppliers
represented a potentially life-threatening challenge. Losses rang up and the
company’s stock was pummeled. Shares of OVRL traded over $20 in 2006, but had
slipped below $3 in 2008. Earnings declined, slipping into the red in the fourth
quarter of 2005. The company hasn’t reported a profit since 2006 and the 2009
balance sheet shows a net negative total equity.
The situation at Overland apparently does not
appear quite as bleak to insiders. Eric Kelly stepped up to the helm as CEO in
January of 2009 and quickly set about assembling a new management team. He
brought in former Snap and Data Robotics marketing whiz Jillian Mansolf
in July, presumably to focus on the Snap Appliance storage systems.
Now Overland has taken another step, appointing
BlueArc and Data Robotics founder Geoff Barrall as CTO and VP of
Engineering. Kelly, Barrall, and Mansolf are a formidable
team, lending the company the credibility it needs to steer Overland out of
Overland is in the process of expanding its
Snap operations and moving it from Milpitas to San Jose. This month, the company
revamped its NEO tape libraries and launched a new line of Snap appliances
featuring enhanced support for VMware and Hyper-V. Overland also outsourced
product manufacturing to Foxconn, improving gross product profitability.
On the financial front, Overland shored
up its finances with $12 million in private equity funding on February
A Full-Line Storage Company?
Although known primarily for its NEO
line of tape libraries, Overland has a much broader product portfolio.
The company sells a line of virtual tape libraries that once
used IBM’s Diligent deduplication technology but this relationship is long over.
The Snap line has expanded into both
NAS and iSCSI SAN primary storage arrays as well. Although the low-end
2-drive SnapServer 110 might not look like much, the rack-mount SnapServer 600
series can be expanded over 100 TB. This is accomplished by adding storage
expansion chassis behind the slim 1U SnapServer head, but we suspect I/O
capacity and reliability will be limited when daisy chaining seven expansion
units on a single SAS port.
Overland’s storage lineup puts it squarely into
the exploding small- and medium-sized business storage market. With server
virtualization and database applications demanding ever more capacity and
performance, many smaller IT operations are looking to add networked storage.
But even the entry-level products of storage titans like EMC and NetApp are out
of reach for these small shops, leaving a hole in the market. Companies
like Overland are rushing to take advantage of this market with devices
like the SnapServer, Data Robotics’ Drobo Elite, and EMC’s Iomega ix4 line.
Those that offer low cost, ease of use, and integration with Windows and VMware
are likely to be very successful over the next few years.
Overland may just surprise us all with
a serious resurgence. CEO Kelly has lined up a great management team,
brought in extra cash, and refocused the company on a nascent market
opportunity. Not bad for a company many had long written off!