Adaptec has finally got out of the loss-making Snap Server business and, by buying it, Overland Storage has gained a valuable addition to its ULTAMUS primary storage product line.
This is Overland CEO and president Vern LoForti's first acquisition since taking over the reins at Overland and represents a quite triumphant vindication of his turnaround efforts at Overland which was in dire trouble before he was appointed to replace the former CEO Chris Calisi.
Overland has bought the Snap Server network-attached storage (NAS) business for what is virtually a face-saving pittance.
The sale price is a snip, a mere $3.6 million for the Snap Server brand and all the assets related to Snap Server's networked and desktop storage appliance, which deliver about $18 million revenue to Adaptec a year - an amazing price. Overland will pay $2.1 million paid in cash upon closing of the transaction, with the remainder to be paid in 12 months. Adaptec will retain ownership of all iSCSI-based hardware and software products and assets, which will be rebranded and managed by Adaptec.
Adaptec acquired Snap Appliance, a maker of NAS appliances, for $100 million in 2004. When CEO Robert Stephens was replaced by S "Sundi" Sundarsh he decided to sell what was then Adptec's NAS division in October 2005. He couldn't find any takers. So he spent money on the line instead with an enterprise 500 line and new 100 series products in the range a year later. A year later still, in late 2007, and they seemed successful with customers like the Blue Cross charity using them and good reviews and awards in the trade press.
The success was a profitability mirage though and the investment seems to have been for nought with a $3.6 million price representing little recompense for the hundred million dollar plus cost of the products and their development.
Amazingly, given the price, Snap Server leads the NAS market with more than 200,000 units shipped. The acquisition will enable Overland to address the $1.2 billion SMB NAS market, which according to IDC continues to grow by at least 15 percent annually. The features and functions of the Snap Server product line position it well to target the three fastest growing market segments: distributed NAS, centralized data protection for remote sites and backup to disk.
Sundaresh is quoted thus: "The sale of the Snap Server business allows us to focus on strengthening our leadership position in the Unified Serial RAID controller business, leverage our iSCSI assets and continue to streamline the company's operations. We are extremely pleased to sell the Snap Server NAS business to Overland; its management team shares Adaptec's commitment to product quality, technology development and customer service."
What is Overland's take? LoForti said: "With the acquisition of the Snap Server storage appliances, Overland is well positioned to extend our end-to-end data protection offerings while also meeting our customers' and partners' growing needs for best-of-class, distributed NAS appliances. The award-winning Snap Server family complements our existing robust portfolio of disk-, tape- and SAN-based products to reinforce Overland's strength as a global leader in the growing data protection market. At the same time we are thrilled at the creative talent pool that will be joining our existing team in strengthening a truly world class organization."
The addition of the Snap Server business adds a best-in-class distributed NAS offering to the company's product portfolio, helping Overland achieve its goal of providing "end-to-end data protection solutions" to SMB customers and distributed enterprises.