Completing its two-year effort to overhaul its business model from a simple tape-automation company to a storage vendor that can offer storage solutions for three tiers, Overland Storage has acquired tiny storage provisioning software vendor Zetta of Woodinville, Wash. for $9 million.
After sorting through feedback from its channel partners and determining that a software-based solution made more sense than one focusing on hardware, Overland Storage Inc. chose Zetta Systems over about a dozen other companies, said Christopher Calisi, president of Overland, a San Diego, Calif.-based company.
"Its taken us nearly nine months to identify the right technology," he said.
Although Zetta will maintain its Washington-based office for software development, the company and its technology will be fully incorporated into Overland Storages offerings, Calisi said.
Overland is moving quickly in incorporating Zettas technology into its portfolio, with a primary storage appliance slated for introduction in about three months. According to Calisi, the Zetta technology will handle all of the failover, replication, snapshotting and virtualization that will be built into the forthcoming appliance.
The resulting product will be part of Overland Storages Protection OS, comprising the third tier—primary storage—of Overlands three-tier strategy. The tertiary tier is made up of Overlands first offering, the NEO series tape libraries, while the secondary storage tier is comprised of the REO disk-based backup and recovery appliance from an earlier acquisition of Okapi Software.
"Our goal is to be able to provide primary storage, secondary storage and tertiary storage," Calisi said. "With this acquisition, well be able to provide primary storage, which will be EqualLogic-like in function but at a fraction of the cost."
Acquiring Zetta Systems makes good business sense for Overland Storage, said Tony Asaro, a senior analyst with Enterprise Strategy Group of Milford, Mass.
"As they continue to build end user customers and the channel selling their REO systems for backup storage, it also makes sense to leverage this success with primary storage," he said.
All customers like to buy from one vendor, or fewer vendors, especially if they like the products they already have in-house from that vendor, giving Overland a potential advantage, he said. Add that to the fact that REO customers are asking Overland to provide them with primary storage, and youve got a great opportunity, he noted.
Whats more, the acquisition may help Overland, which traditionally has been focused on the SMB (small and medium-sized business) market, to increase its dominance in that arena, Asaro said.
"The SMB market offers a huge opportunity for storage networking and no one owns it yet," he said. "Overland has a presence in the SMB market and has an opportunity based on its success with both NEO and REO products."
Following the introduction of its primary storage appliance, Overland Storage will spend the next year or so tweaking it to make it as successful in the marketplace as possible, Calisi said. But over time, the company may build or acquire other software technologies to expand the functionality of its existing products and to tie all three tiers of offerings together, he said.