Feeds

HP sends Overland overboard

OEM love affair has bitter end

  • alert
  • submit to reddit

Internet Security Threat Report 2014

HP has thumped Overland Storage with the reality stick, saying it will buy midrange tape products from another supplier.

Overland made this admission Wednesday, revealing that its largest OEM customer will look elsewhere. HP should start buying gear from a new supplier - perhaps StorageTek or Quantum - starting in 2006. Overland expects HP to sell a mix of its gear and the new gear for some time but eventually to be phased completely out of HP's lineup. The loss of a customer the size of HP forced Overland to address some difficult financial repercussions.

"In light of this anticipated loss in future revenue, the company intends to focus heavily on the delivery of new higher-margin products through its branded channel during fiscal 2006," Overland said in a statement.

Then CEO Christopher Calisi tried to step in and put a positive spin on Overland's future.

"We remain excited about the many opportunities that lie ahead for Overland," Calisi said. "We have a strong balance sheet and cash position, and intend to use this strength to fill out our tiered storage strategy consisting of protected primary disk storage, secondary disk-based backup and tertiary tape automation devices."

Overland's OEM business has been shrinking over the past year - a trend that HP will accelerate. Branded box sales, however, have jumped 20 per cent the last two years and now count for $100m per year of Overland's business.

A three-year contract between HP and Overland expires in July of 2006. The deal does not require HP to buy set amounts of gear from the storage maker in the meantime.

HP picked Overland over StorageTek, following the acquisition of Compaq. Now, however, it looks like new CEO Mark Hurd has given Overland the boot as part of an effort to reduce costs in HP's server and storage divisions.

"HP is not announcing a new supplier at this time," the company told us. "HP is taking action for its business to have world class cost structures and the decision regarding Overland is part of that. The current HP StorageWorks MSL6000, MSL5026 and MSL5052 Tape Libraries will continue to be sold for an indefinite period of time or as long as customer demand exists." ®

Related stories

Overland bags Okapi
Quantum buys Benchmark
StorageTek Gives Up on HP
Compaq wears the pants in HP's brave new storage world

Beginner's guide to SSL certificates

More from The Register

next story
Docker's app containers are coming to Windows Server, says Microsoft
MS chases app deployment speeds already enjoyed by Linux devs
'Hmm, why CAN'T I run a water pipe through that rack of media servers?'
Leaving Las Vegas for Armenia kludging and Dubai dune bashing
'Urika': Cray unveils new 1,500-core big data crunching monster
6TB of DRAM, 38TB of SSD flash and 120TB of disk storage
Facebook slurps 'paste sites' for STOLEN passwords, sprinkles on hash and salt
Zuck's ad empire DOESN'T see details in plain text. Phew!
SDI wars: WTF is software defined infrastructure?
This time we play for ALL the marbles
Windows 10: Forget Cloudobile, put Security and Privacy First
But - dammit - It would be insane to say 'don't collect, because NSA'
Oracle hires former SAP exec for cloudy push
'We know Larry said cloud was gibberish, and insane, and idiotic, but...'
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
Win a year’s supply of chocolate
There is no techie angle to this competition so we're not going to pretend there is, but everyone loves chocolate so who cares.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.