Overland enters primary storage market

By Ann Silverthorn

—Overland Storage today announced its acquisition of Zetta Systems, a privately held developer of real-time data-protection software. Overland hopes that the $9 million, all-cash transaction will pave its way into the primary storage market.

Zetta's Server IR and Server NAS technology will form the heart of Overland's Protection OS software and will be the engine for a protected primary storage system. Christopher Calisi, president and CEO of Overland, declined to name the product, but says it will ship through its worldwide indirect sales channel within 90 days and will be comparable to, but less expensive than, products from vendors such as EqualLogic and Network Appliance.

"We want to deliver enterprise-level products, specifically designed for the midrange, across all three tiers of storage—primary, secondary, and tertiary," says Calisi. (Overland's REO disk-based backup products cover the secondary tier and its NEO line of tape libraries represents the tertiary tier for data archiving.)

"With the new primary storage product, as soon customers create information, they can be assured that it's protected," says Calisi. "The data can then be moved over to REO and then out to tape."

Zetta was founded in 2002 with a beta version of its Zetta Services IR product, and claimed data recovery in seconds, not minutes. The software works with heterogeneous hardware and both Fibre Channel and SCSI. Its indirect sales model fits into Overland's channel strategy, and Calisi is optimistic that the acquisition will help Overland penetrate some of Zetta's current installations.

Zetta's co-founders will join Overland's management team. Ganapathy Krishnan, Zetta's president and CEO, will join Overland's executive team in San Diego, reporting directly to Calisi, and John Guthrie, senior vice president and CTO, will remain at Zetta's headquarters in Woodinville, WA.

The acquisition news comes on the heels of Overland's announcement that Hewlett-Packard—its largest OEM customer—will not purchase its next-generation midrange tape automation products from Overland. When Calisi joined Overland four years ago, 80% of the company's revenue came from Compaq (which was subsequently acquired by HP), a figure that is now about 53%. Calisi notes that HP's business was extremely low margin and that the introduction of primary storage devices will lead to higher-margin business.

This article was originally published on August 09, 2005