Overland Set to Ring Turnaround Bell with Disruptive Technology at a Disruptive Price
With yesterday’s introduction of a new line of data storage products, San Diego’s Overland Data (NASDAQ: OVRL) has set out to make a name for itself in the same high-tech market where it has been operating for the past 31 years.
Since it began making IBM-compatible 9-track tape drives in 1980, Overland Storage has been a behind-the-scenes manufacturer of tape and disk-based data backup equipment. Its products are used mostly by businesses and other (distributed enterprise) institutions to meet their long-term data archiving and protection requirements. But Overland’s long history as a white-label, original equipment manufacturer (OEM) ended earlier this year, CEO Eric Kelly told me recently.
“We officially announced in our last earnings call [in September] that we had shipped our last OEM product to Hewlett-Packard,” Kelly told me. Today, all of the company’s products are sold under the Overland Storage brand.
In addition to asserting its corporate identity, Kelly contends that Overland has worked over the past year to reinvent itself—a turnaround process that culminated in yesterday’s debut of the company’s new “SnapServer DX” technology. Now it is down to a question of market acceptance for the company with roughly 200 employees.
As I’ve previously reported, Overland’s troubles began in 2005, when Hewlett-Packard said it was significantly reducing its orders for Overland’s data storage products. Kelly said HP accounted for almost 60 percent of Overland’s $235 million in fiscal 2005 revenue. In fiscal 2010, Overland’s total sales plunged to less than $78 million, with HP accounting for 22.5 percent of the total. “Now HP represents four to five percent of our revenue,” Kelly said.
Today, Kelly says losing HP as Overland’s biggest customer was one of the best things that could have happened to the company. Instead of making … Next Page »