Feeds

Overland Storage preps private cloud rescue

Oh my white fluffy knight, take me away from all this

Maximizing your infrastructure through virtualization

Troubled tape and disk storage vendor Overland Storage has seen revenues drop and losses rise over its last fiscal year, but fared better in its final quarter. A clustered filer product and private cloud offering is coming, hopefully lifting Overland out of the prolonged hole it has been in.

The fourth quarter (Q4 2011), ending on 30 June, saw revenues of $17.6m, down from the $19.3m recorded in Q4 2010, with net losses also down from the Q4 2010 figure of $9.7m at $9.2m. Encouragingly, gross margin – which was 29.3 percent in the year-ago quarter – was 32.5 per cent in Q4 2011.

The full year FY11 figures masked this, with revenues of $70.2m, $7.5m lower than fiscal 2010 revenues of $77.7m. The net loss in 2010 was $13m and this increased to $14.5m in 2011. The gross margin for 2010 was 27.7 per cent and this increased to 30.2 per cent in 2011, with three consecutive quarters of over 30 per cent gross margins. SnapServer and SnapSAN disk-based product revenue grew 32.7 per cent year-over-year. So it was not all bad news, numerically speaking.

But, obviously, the few examples of product sales growth, the margin increases and operating expense reductions weren't enough, necessary, vital even, but far from enough.

Basically Overland stuck to its hard road in 2011, salami-slicing its costs down, building up its channel – there are now more than 1,500 resellers worldwide - buying NAS clustering assets from the failed MaxiScale; entering new vertical marketing segments; and developing new product technology. BlueArc and Drobo founder Geoff Barrall is running the product engineering and development factory, so to speak, otherwise known as the rescue department.

That's the hope, the prayer: that Barrall's vision and drive will pluck a technology rabbit out of Overland's development hat to rescue the company.

One other potential lift to revenues could come from the patent infringement lawsuit against German autoloader supplier BDT, IBM and Dell. That could help sweeten the bitter pill of losing the tape library OEM deal with HP, a contract which finally came to an end in the fourth quarter.

Overland said this about the lawsuit: "An International Trade Commission (ITC) trial was completed on September 7, 2011, with a ruling from the ITC expected by November 23, 2011. We are represented by DLA Piper LLP, the largest law firm in the world. We were pleased with the development of the evidence at the trial and we remain optimistic about the case."

It could lose though, as such lawsuits are a bit of a lottery.

CEO Eric Kelly mentioned forthcoming products in his earnings remarks: "In fiscal 2012, we expect to release a clustered NAS solution and a private cloud offering designed to enable our entry into additional fast growing markets."

That's more like it.

The company said this would enable it "to bridge the gap between traditional disk storage and cloud storage solutions, which would enable data storage infrastructures to scale extensively without sacrificing reliability and performance". The new products will use the MaxiScale technology and Overland's Snap Guardian operating system.

A manufacturing partner was selected for the forthcoming disk products, note the plural, in Q4, and the release referred to a "new Snap platform".

Eric Kelly said: "With the selection of our strategic manufacturing and materials partners, and the next-generation design and architecture of our new product offerings, we plan to deliver a new level of functionality, performance and pricing to address the requirements of the distributed enterprise and the small and medium enterprise customers." Ah, every Overland customer, channel partner and investor has been waiting for this.

They can look forward to improved Snap Appliance products, a clustered NAS product and a private cloud offering in fiscal 2012 – that is by 30 June, 2012.

Overland employees, its channel partners, investors and customers could perhaps begin to hope that the company might move into profit in a late 2012 quarter. That would be a long, long-awaited event and everyone involved would be over the moon.

Let's not go over the top though. Put hope to one side. The company still has a lot of hard grinding to do and there are no guarantees about the eventual outcome. ®

The Power of One eBook: Top reasons to choose HP BladeSystem

More from The Register

next story
Sysadmin Day 2014: Quick, there's still time to get the beers in
He walked over the broken glass, killed the thugs... and er... reconnected the cables*
Auntie remains MYSTIFIED by that weekend BBC iPlayer and website outage
Still doing 'forensics' on the caching layer – Beeb digi wonk
SHOCK and AWS: The fall of Amazon's deflationary cloud
Just as Jeff Bezos did to books and CDs, Amazon's rivals are now doing to it
BlackBerry: Toss the server, mate... BES is in the CLOUD now
BlackBerry Enterprise Services takes aim at SMEs - but there's a catch
The triumph of VVOL: Everyone's jumping into bed with VMware
'Bandwagon'? Yes, we're on it and so what, say big dogs
Carbon tax repeal won't see data centre operators cut prices
Rackspace says electricity isn't a major cost, Equinix promises 'no levy'
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Securing Web Applications Made Simple and Scalable
Learn how automated security testing can provide a simple and scalable way to protect your web applications.