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Overland Gets Enlarged

Overland Storage Inc. (Nasdaq: OVRL) this week will announce the biggest tape library in its history with the 500-cartridge NEO 8000, which the company hopes will let it cut into the market share of Advanced Digital Information Corp. (Nasdaq: ADIC) and Storage Technology Corp. (StorageTek) (NYSE: STK) at the high end of the midrange space.

The company's existing NEO 2000 and 4000 families top out at 240 cartridges. The monolithic NEO 8000, which uses the same robotic arm design as the previous-generation systems, now lets Overland cover the entire midrange tape spectrum, says president and CEO Christopher Calisi. It expects to start shipping the 8000 by the end of 2003.

"Our resellers can now use Overland for all their library needs," Calisi says. "This should lock up the midmarket for us."

Well, not necessarily. Fara Yale, research analyst at Gartner Inc., says Overland will have a challenge in trying to prove itself to higher-end enterprise customers.

"For Overland, it's moving into new territory," she says. "Traditionally in the tape automation market, they've been midrange to low end player with smaller libraries. This will put them into competition with companies like StorageTek, which is very strong in high-end markets like that."

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