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Overland Sights Startup

Overland Storage Inc. (Nasdaq: OVRL) may be circling startup Rasilient Systems Inc. with an eye to buy.

While the companies won't confirm it, there's persistent talk that Overland's been planning to buy a RAID vendor sometime soon. And signs point to Rasilient.

Let's take it from the top. Overland's survival depends on disk technology. Thanks to its reliance on a dwindling tape market, the company has slashed guidance repeatedly over the last few quarters, and it laid off around 140 employees, or one third of its work force, last September (see Overland Underperforms and Overland to Layoff One Third).

Hence, a new direction, openly discussed by execs and summed up in the company's latest SEC filing: "Our strategy is to leverage our current position as the leader in mid-range tape automation into a similar leadership position in intelligent disk-based backup and recovery appliances." Later in the same report, Overland admits to needing help: "We have limited experience in the development, marketing or sale of disk-based products, and this area is new to many of our personnel."

The stage is set. And there's a precedent: Overland has already acquired one company, Okapi Software, in pursuit of its new life. It shelled out $5 million in 2003 for Okapi, and its first disk-based iSCSI offering, the REO series, emerged shortly thereafter (see Overland Captures Okapi and Overland Ships iSCSI Backup Device).

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