Overland Moves Up Tape Autoloader Ship Date For Channel And Potentially Dell

An Overland executive told CRN that the channel-version of the new autoloader, code-named Dreadnaught, is expected to ship this month, while the OEM version is expected to start shipping no earlier than June.

It has been an open secret in the storage industry that Dell is planning to OEM the autoloader from San Diego-based Overland, a move which Overland's solution providers have been watching closely. Tom Curlin, an analyst at RBC Capital Markets, suggested that Overland would be OEMing the tape autoloader to Dell in a report late last year, and it has been the topic of discussion among solution providers and other industry watchers for months.

While Overland has been talking about the upcoming OEM tape autoloader since late last year, both Overland and Dell declined to comment on whether the two have a relationship.

Solution providers said they are pleasantly surprised that the autoloader is sooner than they expected, and is coming to them before it goes to Dell. "We were expecting it at the end of this quarter, at the same time," said John Thome, vice president of Chi, a Cleveland-based storage solution provider.

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Details about the new entry-level autoloaders have not been unveiled by Overland, other than that there will be three models with 2U, 4U, and 8U form factors.

The OEM deal with Dell will work as long as Overland protects its channels, something the company is known for, said Thome.

"Am I concerned? Yes. Am I assured by Overland it will protect the channel? Yes," Thome said.

Chi is actually looking forward to seeing a new autoloader from Overland as quickly as possible, because the company's existing models have been around for some time, said Thome.

If Dell were to OEM Overland's NEO line of tape libraries, there would be much more concern than a deal with the company's new entry-level autoloader, Thome said. "We are not going out to create opportunities in autoloaders," he said. "But we sell them. Overland just needs to make sure it protects the channel that built [the company]."

Don McNaughton, sales manager at HorizonTek, a Huntington, NY-based Overland partner, said that while he worries that Dell could end up driving margins down on the new autoloader, the alternative could be worse. "We want to make sure Dell doesn't get their hands on the entire Overland line," he said.

McNaughton said Overland should look to its long-term OEM relationship with Hewlett-Packard for the NEO line as one that actually worked for the channel. "We liked the HP relationship," he said. "We could actually feed off it by pointing out to customers that HP qualified the product. It was good to have the OEM name behind Overland."

Overland has been talking about the upcoming OEM deal as a way to bolster Wall Street confidence in the company following the news that Hewlett-Packard is starting to unwind its OEM purchases of Overland's NEO line of tape automation appliances, and in the wake of a failed attempt by Redmond, Wash.-based ADIC to acquire Overland.

Late last month, Overland officials said during the company's second quarter 2006 earnings conference that the company is shifting R&D funds from its new Ultamus line of primary storage arrays towards the OEM tape autoloader in order to bring that product to market faster.

Overland President and CEO Christopher Calisi told CRN that the shift in R&D funds is aimed at making analysts more comfortable with the company's business model.

"It's a non-event," Calisi said. "We wanted the Street to understand so they have more confidence in our model. It's to get our new OEMs to market as fast as possible. We have time with the Ultamus. It's in the market now."

Solution providers are prepared to give Overland the benefit of the doubt, given that the company has historically been loyal to its channel partners.

Overland, which has always treated its channel well, is in the best position to determine how it spends its R&D funds and who it has for OEM customers, said Gordon Emerson, vice president of integration sales at Synegi, an Irvine, Calif.-based solution provider.

"On the one hand, you can say they are taking R&D dollars from the Ultamus, which is for the channel," Emerson said. "So it could impact the channel. But I say, they have a corporation to run. They have a top-notch group of people there. You have to spend the budget where it gets the most bang for the buck."

Any enhancements to R&D will eventually transfer to the channel, Emerson noted. "So in the short term, maybe not so many dollars will go to Ultamus," he said. "But down the road, it will ultimately make the product line better for the channel."