Tape Vendors say "We're not dead, yet"

Longtime tape vendors Overland Storage and Tandberg Data aregoing all in as the poker players say on a transition from tape automationvendors to providers of disk backup, and in the case of Overland, NASsystems.  Both vendors made a good livingin the 80s and 90s selling tape drives and libraries to the SMB and SME marketsand have had trouble adapting since.

Last week I spoke to Overland about their new CDP/DisasterRecovery appliances Tandberg about their DPS1000 VTLs and the future of thecompany as a disk backup player.  TheDPS1000 VTL runs software from Crossroads, of storage router fame, creating aniSCSI VTL with data compression and direct tape export but lacking heavy dutydata deduplication all for an MSRP of $10K for 3TB or 18K for 6TB andexpandable to 37TB (all net after RAID overhead) the DPS1000 might be a goodsolution for an SME.

On the other hand I'm not convinced an iSCSI VTL is theright solution in an era where just about every backup application supportsdoes data deduplication to disk targets. After all rather than spend $18K for aDPS1000 you can buy an Infortrend iSCSI array with 8 1TB drives for $6000 andget several times the effective capacity.

Tandberg is also, along with Imation, an OEM of Prostor'sRDX removable disk technology that wraps a laptop SATA drive in a hermeticallysealed plastic case for ESD and shock protection. This protection, plus thesoft loading USB or SATA dock and driver that makes RDX cartridges removablestorage that backup applications can track and ask for, makes RDX a much bettersolution than the USB drives many SMBs use for backupOverland has also made several bets on the disk market fromthe REO VTL to buying the much traveled Snap Server group from Adaptec.  Thanks to a loyal reseller corp Overland'sgotten some traction with these products.

Their latest play is a replication/CDP appliance based inpart on Inmage's software.  The REOBusiness Continuity Appliance can be deployed on the local network for HA or ata DR site, it along with a host based write splitting agent, provides fastrecovery for applications as well as data. 

I'm a bit concerned about the $25K entry price for an appliance andsoftware licenses to protect 2 servers. SMBs with just 2 servers to protect canget host based solutions from Steeleye or Neverfail for substantially less.

So how did these companies get in trouble?  The short answer is betting on a decliningtechnology but each has a slightly different fall from grace story.

Overland's primary problem was over reliance on an OEMagreement with HP for tape libraries.  WhenHP decided to go in a different direction Overland took a financial beating.  Even in the disk market I think Ultimus (theirprimary storage array) and the Diligent based deduping REO 9100 VTL weredistractions not well suited to Overland's market.

Overland's financial situation has gotten to the point they'rerelying on factors for AR financing, a type of financing that usually carries ahigh interest rate, and their recent 10-Q included a statement to the effectthe company may never return to profitability.Tandberg made a bad bet on the SMB market continuing to usetape as their backup media. As Sony and HP went their separate ways over thefuture of DAT/DDS at the turn of the century vendors scrambled to develop areplacement tape format for DAT the resulting raft of tape formats from theconsumer oriented Travan to the truly abysmal OnStream ADR with Sony's AIT.Exabyte's VXA, Quantum's DLT-Value and Tandberg's own SLR technology using the1970's DC300 tape cartridge format all competing for a shrinking market.

That market was shrinking of course because disk capacitywas growing, and cost per byte falling, faster than tape capacity enabling SMBsto junk their tape drives. After all without professional IT staff tape backupsystems were spectacularly unreliable as bad habits like reusing the same tapeevery day for years, not monitoring the backup application as it complainedabout bad tapes, or asked for a continuation tape combined with dusty badlyventilated server closets to make even good technology look bad.

In addition to spending valuable R&D funds on SLRTandberg bought struggling Exabyte and tooled up to be the European builder ofDLT and later LTO drives. While the Exabyte acquisition did improve Tandberg'sUS distribution being an SMB tape vendor turned out not to be a good businessand Tandberg found itself taking a trip through the Norwegian version ofchapter 11 this spring. Now free of some of its debt Tandberg may be able toleverage RDX and their VTL to a profitable future.