ADIC is, in the post-STK period, the largest independent player in the jungle that the automated tape/data protection market has become. It has demonstrated predatory behaviour by buying around ten percent of Overland's shares.

After talking to a person close to events at the Overland camp I was able to have a conversation with ADIC CEO Peter van Oppen.

He explained that he'd talked to Overland's CEO Chris Calisi once ADIC's share purchases had gone above 5 percent, as he was obliged to do by US regulations: "We talked to them about consolidation. ... We constantly look around ... to foster consolidation ... (or) to further ADIC's interests."

Overland has possibilities for ADIC but "we're very disciplined about price." He explained that the automated tape device market doesn't need consolidation; it needs efficiency. It requires scale. In the workgroup and department space products are becoming commoditised. Suppliers can scale virtually with OEMs are actually with mergers and/or acquisitions.

Overland has no manufacturing; it's all outsourced. Its disk-based REO products have a good presence in the small scale area, better probably than ADIC's PathLight VX. That's a fit. Overland has good people and ADIC has 80 open reqs for people. Then there are Overland's customers and channel partners.

You get the impression that, whatever Overland people might say, the company is in play. "We've looked at them many times, and at others. We've always been cautious about their dependence on HP." When that went away ADIC's interest rose. "It's an attractive tactical opportunity for ADIC - at the right price."

That word 'tactical' is revealing. He didn't say 'strategic'. This lion king is perhaps toying with the potential prey, ready to walk away if Overland's board and shareholders don't acquiesce to ADIC's advances. Admittedly, if ADIC went around saying Overland was a strategic purchase then the buy price would rise.

What about the poison pill defence? "Their board could rescind it."

From our talks with others we get the impression that Overland certainly doesn't think there is a strategic need to be acquired by ADIC. Indeed they think ADIC might profit by causing 'short-term disruption'.

Peter van Oppen was mystified by Overland's purchase of Zetta. Is it about delivering primary disk protection or primary disk itself? He things it's about primary disk, having listened to Overland's conference call on the topic, and pointing out that snapshot and replication are a pre-requisite these days for a primary disk supplier, also that Overland said it wanted to take on NetApp.

But he can't see, at least, this is my impression, the benefit to Overland of doing this, of supplying primary disk. There are already enough primary disk suppliers. Do we need another one in what is already a commodity market?

Multi-tiered storage
He pointed out that ADIC's StorNext software has support for more than one disk tier built in. The current PathLight VX products only have one tier of disk storage. There were no plans announced to introduce multi-tier disk PathLight VXs. But he became animated talking about possible niche applications requiring a virtual tape with multiple disk tiers, perhaps FC and SATA. Yes, it's an ILM concept and, yes, ADIC has software to move data between tiers.

The content-addressed storage market might be a potential one for such a capability. So might broadcast media. But ADIC is not a mainstream disk storage supplier; it's more at the edge, so to speak. It takes commodity components, tape and disk drives, and adds value to them through software.

ADIC products or technologies could be used in total or in part in another supplier's ILM product set. (One is reminded that ADIC does have a partnership with EMC and EMC is a strong proponent of ILM but doesn't, yet, have an integrated D2D2T component of it. And then there is NetApp.)

PathLight VX is a virtual tape system. It could also be a virtual disk system with applications 'seeing' disk where in fact there is a combined disk and tape system with transparent data movement between them.

I got the impression there was much interest here. But the ADIC CEO never mentioned product or specific ADIC intentions. He seemed keen on the specific concept but reticent to talk specifics.

Sun and StorageTek
He thought that Sun's purchase of StorageTek signalled some profound things. First of all: "Tape was not dead." The Sun deal and EMC's reselling of ADIC kit signalled that strongly.

Secondly, "It typifies the system companies move to integrate broad-based storage solutions," and, in Sun's case increase its storage attach rates in its accounts.

And thirdly? "It leaves ADIC as the largest independent automated tape solution supplier."

ADIC makes intelligent libraries with good management and diagnostics - around 2000 events are monitored. They're not going to be the cheapest out of the box. ADIC won't price down. My interpretation of the implication of this is that if Quantum aims to mix it at the price level with the PX500 series ADIC is not going to join suit.

And so...
The absorption of StorageTek by Sun leaves ADIC sitting fairly pretty. Channel partners may prefer to take product from an independent automated tape vendor rather than from Sun's storage division. LTO is taking over the open systems (Wintel/Lintel) tape space and, unlike Quantum, ADIX doesn't have to watch its proprietary tape format enter a slow decline. It isn't dependent on a main OEM like OverLand and doesn't have to scramble for new revenue streams like that company when HP decides to take a walk.

In the tape jungle ADIC is like a Lion King. It will sleep happy tonight. Things are arranged well in its area and tomorrow, who knows, a juicy morsel may fall into its lap. Ah, sometimes it's good to go out and play.