Overland Acquires Okapi, Moves Into Disk Backup Software

Executives at San Diego-based Overland said Thursday that the company offered a combination of cash, stock and assumption of liabilities as part of a $5 million acquisition of Okapi, which develops software to build appliances used in disk-to-disk-to-tape backups.

Okapi, also based in San Diego, last year introduced software to build such appliances, and in January introduced its first appliance, the ipXcelerator. The ipXcelerator is a plug-and-play appliance that allows data to be quickly backed up at hard drive speed for eventual storage to tape.

An Overland spokesperson said the company plans to immediately start selling the Okapi products under the Overland name and would no longer use the Okapi name.

Overland until now focused on backing data up to tape, and the Okapi technology will mark its first moves into the disk-based backup space, the spokesperson said.

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Okapi is viewed to have a complimentary technology to Overland, the spokesperson said, since the two firms use many of the same distributors and their products are "purchased by the same CIOs."

Both companies work mainly through solution providers, channel sources said.

Greg Knieriemen, vice president of marketing a Chi, a Warrensville Heights, Ohio-based solution provider that counts Overland as its main vendor, called the acquisition an interesting move for Overland.

"We have been pushing Overland to do disk backup," Knieriemen said. "Our No. 2 vendor, Nexsan [Technologies], already does."

Backing up to disk instead of tape sounds simple, but it is not, said Knieriemen. Data saved to disk is typically saved in a file format, but the format is different for tape. Furthermore, the disk-based backup concept is not an easy sale to customers, he said.

"Lots of companies have legacy technology and can't transfer the data easily," Knieriemen said. "We need to spend time with customers to work on the concept. But now that Overland has Okapi, a tape vendor with disk technology, this will make the job easier."

RBC Capital Markets, a Toronto-based analyst firm, said in a research report that Okapi's technology is a strong complement to Overland's core business, as magnetic disk storage will capture the part of the secondary storage market where performance is a concern. RBC also expects Overland to bundle the Okapi appliance with its tape libraries for a complete backup solution for small and midsize businesses.