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Overland Loses Another Partner

Overland Storage got dumped by its second OEM partner in 14 months when Dell pulled the plug on a low-end tape partnership that was one of the worst kept secrets in the business. (See Overland Grabs New Partner and Dell Boots Overland.)

Overland Thursday night revealed Dell has terminated the OEM deal it announced in November 2005. At the time, Overland refused to reveal its partner, although industry sources pointed to Dell. Overland launched the 12- and 24-cartridge tape libraries as part of its ARCVault family in June but never met Dell's product specifications. (See Overland Unveils ARCvault.)

Overland expected the Dell deal would help it recoup some of the revenue it lost when Hewlett-Packard killed its tape library OEM deal in August 2005. (See Overland Loses HP OEM Deal.) HP accounted for more than half of Overland's revenue, which totaled $235 million in fiscal 2005 and a $209 million in fiscal 2006. The Dell deal would have been worth less, although analyst Glenn Hanus of Needham & Co. estimated it to hit $100 million in 2008.

Now Overland is out of the hardware OEM game, although HP does rebrand its VTL software on its SMB virtual tape libraries (VTLs). Overland will try to rebound by pushing its brand tape and disk backup products and an upcoming line of RAID storage through the channel.

The Dell deal fell through because Overland was far behind schedule with the libraries, originally set to ship early this year.

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