Overland Storage's OEM deal for entry-level tape libraries has fallen through.
Executives of San Diego-based Overland said on Thursday that the company was notified by Dell that it plans to terminate an OEM agreement for two automated tape libraries developed by Overland.
Overland first unveiled the 12-cartridge and 24-cartridge tape libraries, code-named Dreadnaughts, in November 2005. At that time, channel sources said Dell had signed an agreement with Overland to OEM the libraries.
The Dreadnaughts were originally slated to ship to the channel early this year. Overland later said they were expected to start in July. However, shipments have yet to start.
Overland had been counting on the new OEM deal to replace revenue from its earlier OEM deal with Hewlett-Packard. Overland and HP said in August of last year that their OEM relationship was starting to wind down.
Overland's channel partners were glad to hear about the end of the Dell OEM deal. However, they expressed concern that Overland and its current management team were losing their focus on the market and the technology.
Greg Knieriemen, vice president of marketing at Chi, a Cleveland-based solution provider, called the end of the OEM agreement a great opportunity for the channel.
"This removes a potential for channel conflict," Knieriemen said. "Channel partners like Chi will be more important to Overland than before."
One solution provider, who preferred to remain anonymous, called the move a good one for the channel, but bad news for Overland. "If I were Overland, I wouldn't have been hanging my hat on anything Dell said," the solution provider said. "Dell doesn't have the credibility HP does."
That solution provider said the end of the Dell deal, combined with the slowing down of the HP OEM deal and problems with shipping the Dreadnaughts could spell the end for Christopher Calisi, president and CEO of Overland.
Another solution provider was more blunt about his assessment of Calisi. "Calisi should have been fired six months ago, and should be fired now," the solution provider said.
Calisi and other Overland officials were not available for comment.
Ed Moltzen contributed to this story.