Overland's president jumps overboard
Vern LoForti swims into the night
Vern LoForti, the man who helped rescue Overland Storage from the ravages of Chris Calisi's CEO-ship, has left the company.
LoForti was Overland's president and CEO when board member Eric Kelly - who had largely persuaded Overland to buy his old Snap Appliance business from its unloving owner, Adaptec - took over as CEO in late January. LoForti relinquished the role in an amicable-seeming takeover, with both men positive about the change.
The chair of Overland's board is Scott McClendon, who was appointed in 2001. When CEO Chris Calisi took the company into near bankruptcy and departed in late 2006, McClendon became interim CEO and ran the ship until August 2007, with headcount cuts and other recovery measures en route, at which point he put chief financial officer, Vern LoForti, in charge.
At that point Overland supplied NEO and ARCvault tape libraries, REO disk backup and virtual tape libraries, and ULTAMUS protected drive arrays. The principle product problem was that the tape product sales were declining and disk-based protection product sales were not growing fast enough to compensate.
As a data protection vendor it was natural for Overland to go into disk-based protection, but the same natural evolution applied to its tape automation competitors as well as to drive array manufacturers. Overland did not partake in the deduplication revolution, and lost out on revenue streams going to Data Domain and others.
LoForti kept Overland afloat with more restructuring and deals with factoring finance houses, which gave Overland more operating cash. He appointed new marketing blood in the form of Ravi Pendekanti, but found his job becoming harder and harder due to the recession. Nasdaq delisting threats seemed to have become a permanent aspect of Overland's financial situation, as share prices and overall company value declined below Nasdaq limits.
Eric Kelly joined the board and persuaded McClendon and the other directors that buying Adaptec's unwanted Snap Server business would be the way to get some oomph back into the engine room. Snap Servers were high-volume low-end network attached storage (NAS) filers and sales volume would bring dollars into Overland's coffers.
Everyone agreed and Overland bought the Snap Server business from Adaptec very cheaply, for just $3.6m, a smaller sum than a well-heeled CEO would pay for his country house.
Vern LoForti is a warm-hearted and courteous man, an encouraging mentor and is well-liked, but times are desperate, investors need a return, losses must be stopped and something more was needed.
A harsh judgement would be that LoForti kept the leaking bucket that was the Overland ship afloat - pretty miraculous in the circumstances - but didn't manage to get enough motive power in the engine room to get the ship going anywhere.
What the board came to think after a while was that the energetic Kelly was better-placed to run Overland than LoForti, and so LoForti ceded the CEO-ship, though retaining his president's title. Kelly has recruited quite impressive executives: in July Jillian Mansolf came from Drobo, the maker of high-class and sexy pro-sumer disk backup boxes, to become Overland's SVP for sales and marketing. Pendekenti moved sideways from marketing to take over business development.
In September, Chris Gopal, came from Dell, where he was VP for worldwide operations, to do the same thing at Overland. CFO Karl Kalbfleisch has been given a new contract enabling him to receive bonuses. And Kelly has sent LoForti away, or agreed to his resignation.
Overland is now under the complete executive control of Eric Kelly and his priorities seem to be making products and getting them to market very efficiently, (via Gopal,) marketing the hell out of them with terrific sales follow-up, (via Mansolf). Pendekanti's business development adds icing to the cake and Kalbfleisch's finance office will see that not a cent is wasted. Who needs a president? We might expect Kelly to get that title in the next few months, by the way.
The Overland rust bucket ship is riding slightly higher in the water after encouraging full year results, reported in September. Although it has new officers, it is still facing Nasdaq delisting and the recession is still hitting sales.
Can Overland get steaming again and bring its operations back into profit? The product keys are Snap Server and whatever new and evolved products engineering can come up with. We can expect LTO 5-supporting tape libraries and maybe an increased focus on Snap Server's iSCSI and unified storage capabilities.
LoForti did his 17-month stint as CEO and kept things afloat when the company could have sunk. Now that he's gone, nine months later, the Overland board will thank him for that, be grateful for a moment, and then all eyes will turn to the new executive officers. Will Kelly's team become Kelly's heroes? No-one knows but, boy, they are praying hard they do. ®