mostly tape-based storage products, Kelly said the company had to develop a new strategy for itself as a branded services company that provides “end-to-end data protection.” Under Kelly, Overland also has been reducing its dependence on tape-based data storage technology, which amounted to 46.6 percent of Overland’s revenue in fiscal 2010. As of June 30, Overland’s tape products accounted for 37.7 percent of its overall revenue. A spokesman says the remainder of the company’s fiscal 2011 revenue came from a combination of disk-based product sales, service, and accessories.
Overland’s SnapServer technology represents a key element of in this turnaround strategy. Kelly describes it as disruptive technology at a disruptive price. “Our view is that it is a breakthrough,” he said. Overland says its “DynamicRAID” innovation combines the technologies of network attached storage (NAS) with IP-based Storage Area Networks (SAN) in a way that eliminates the necessity of allocating data storage to different business functions or groups, a somewhat complicated process known as “provisioning.”
Instead, Overland says the total data storage capacity of a single-unit SnapServer DX or a two-unit DX2 is treated as a common pool. In the old scheme, data storage capacity could not be reallocated once it was provisioned. So if a customer’s engineering department used all of its allotted data storage space, the company had to go buy more data storage equipment. Overland says that’s no longer an issue with its new technology.
Overland contends its technology significantly reduces the technical complexity of storage management, as well as the necessity for IT managers to continuously monitor the remaining storage capacity that’s available. Simplifying this “volume management” is a significant factor for small-to-medium business customers, Kelly said.
Another relevant point, he added, is that Overland has priced its SnapServer products from 30 percent to 50 percent below its rivals. (A SnapServer DX1 with a 4-terabyte capacity, for example, is priced at $2,000 while a SnapServer DX2 with a 36-terabytes capacity is priced at $7,200.) It remains to be seen how Overland’s competitors, which include Dell, NetApp, and EMC, will react.
Kelly maintains that Overland’s strategic change has been easier because the company has long-established sales and marketing relationships with more than 2,000 partners around the world. The company says more than 400,000 units of its tape and disk-based products have been installed worldwide.
“When I started [as CEO] in 2009, we had a stock price of 25 cents a share, and a market cap of $3 million,” Kelly said. Yesterday, Overland’s stock closed unchanged at $2.45 a share, yielding a market valuation of nearly $57 million.
Overland has not yet announced its next earnings release date for the first fiscal quarter that ended in September. But the company has planned an “investor and analyst briefing” that begins at 5 pm (ET) tomorrow at the NASDAQ market site in New York City.
On Oct. 14, Kelly and other Overland executives and guests are scheduled to ring NASDAQ’s opening bell. It is an ironic moment for Kelly to contemplate. “If you look at where we were a year ago,” he said, “we were in danger of being delisted.”
