OVRL comments from sept about merger
OVRL and Sphere 3D have indicated early success data points of the joint platforms in examples such as a public sector implementation of Chromebook devices with virtualized applications and storage in the cloud and also cloud deployment of a leading business productivity software application. . Another example includes a hospital network implementing a combined applications platform using SnapServer DX2 NAS storage, V3 desktop virtualization appliance, and Glassware 2.0 software.
We believe that OVRL/Tandberg and Sphere 3D have significant areas for collaboration with industry leaders in the cloud virtualization, mobility, networking, and storage market with companies as Microsoft, VMware, Citrix, Cisco, Intel, NetApp, Oracle, SAP, NVidia etc. In our opinion, the combined OVRL-Sphere 3D company will have a significant IP portfolio in areas such as desktop /cloud virtualization and mobility, unified software-defined storage, networking and compute platforms, efficient hypervisor implementations with low overhead including micro-hypervisor technology that can be embedded within a thin client OS or system-on- chip.
Technology & Product Milestones OVRL management has indicated shipment of over 2 million RDX removable disk cartridges to date and over 650K RDX drives shipped worldwide, indicating the growing acceptance of OVRL/Tandberg’s RDX technology for backup and archival purposes. For the network-attached storage (NAS) market, OVRL announced the newest version of its marquee GuardianOS NAS operating system with enhanced features for simplified storage management, higher security, performance, and support for platform sharing, virtualized storage and network environments. For the SnapServer NAS storage platform, OVRL management announced a collaboration with BitTorrent to embed BitTorrent Sync software with the SnapServer NAS storage platform. The combined platform delivers, in our opinion, an integrated, secure private cloud mobility solution with the capability to provide syncing and file-sharing between geographically dispersed mobile devices such as smartphones and tablets, desktop clients, and NAS systems.
Synergies for Combined Sphere 3D-Overland Merger Sphere 3D and Overland have been working together to develop an integrated application virtualization and data storage platform, as well as a virtual desktop infrastructure (VDI) solutions, which are already installed at select strategic customers and partners. The application virtualization platform allows native third party applications to be delivered in the cloud or on premise on a multitude of endpoint devices independent of their operating system. The VDI market, a key segment of the virtualization market, is estimated to be over $5 billion and growing 20% annually, according to Frost & Sullivan. Through the combination, we believe that the combined Sphere 3D-Overland/Tandberg Data company will have greater financial and operational scale, and a large and well established worldwide distribution network and tier one OEM partnerships. We believe that Overland's acquisition of Tandberg Data and Sphere 3D's acquisition of V3 Systems are important building blocks in rolling our a global suite of virtualization/storage and data management platforms.
The combination of Sphere 3D's Glassware 2.0 virtualization solution and Overland's data storage solutions will enable mobile device users the full functionality of any software program or application on any device, anywhere, eliminating the application limitations, data management and security problems for enterprises created by the BYOD (Bring Your Own Device) phenomenon. Mobile users that need productivity applications such as word processing, spreadsheets, presentations and collaborations, specialized software for computer-aided design (CAD), magnetic resonance imaging (MRI), software development, video production or customized legacy applications can now experience full application functionality via the cloud or in the data center.
Combined Sphere D-Overland- Tandberg Data entity will have a $100 million to $120 revenue run-rate with upside possible from Sphere3D cloud storage/virtualization software and appliance revenues. We believe that investors may find the combined Sphere 3D-OVRL-Tandberg entity to be a more attractive investment opportunity with scale, diversified product and customer base, and a lower opex structure. The combined company has the ability to accelerate new initiatives such as virtualization and public/private cloud software and data management platforms, scale-out NAS storage, cloud/mobility storage, mission-critical enterprise data backup and recovery through disk and tape solutions etc. The combined company will have a more global customer base with Sphere 3D strength in Tandberg's strengths in EMEA and cost-effective manufacturing base in China complementing Overland's strength with SMB and channel partners in the
Americas. We note that Sphere 3D is an early-stage technology company with limited revenues and significant traction in customer engagements and pilot-stage deployment of its Glassware virtualization platform and V3 appliance platform. The combined company will have a more diversified product portfolio with the hardware mix being: NAS/RDX disk solutions 34%, Tape Automation platforms 22%, Tape Accessories including tape- drives/media 21%, services/royalties 23%.
Synergies for Combined Overland Tandberg Storage. We believe that OVRL and Tandberg have good product and technology synergies with OVRL's strengths in clustered NAS storage, scale-out NAS storage, tape automation and focus on SMB markets in the Americas complementing Tandberg's strengths in RDX removable disk cartridge solutions, tape drives and media, RDX licensing business with a strong presence in Europe and a cost-effective manufacturing base in China. The combined entity, together with OVRL's recently announced partnership and equity investment in Sphere3D, has the scale, product diversity, software/hardware platforms, and global support/service capabilities to realize the vision of emerging as a key provider of storage platforms and distributed cloud/mobility solutions. We believe that the combined company has a broad product portfolio, ranging from early-stage growth initiative such as enterprise/cloud mobility and storage/virtualization platforms with the Sphere3D partnership and scale-out NAS storage platforms to high-volume revenue drivers such as clustered NAS storage and removable RDX disk cartridge products to mature product lines such as tape automation platforms, tape drives, media, and virtual tape libraries.
The combined company will have a strong global IP portfolio with over 60 patents and IP in key categories such as cloud and on-premise enterprise applications virtualization and acceleration, technology to provide "native speed" performance and easy software porting to run applications on any mobile device connected to on-premise or public cloud data center infrastructure, and combined data management and storage platforms such as scale-out/clustered NAS systems, tape drives, tape automation, RDX removable disk cartridges etc. We believe that the combined entity will likely have good economies of scale with Sphere 3D's virtualization and data management software, appliance capabilities and OVRL's strength in developing and manufacturing turnkey storage and data management hardware platforms for SMB and channel partners globally, low- cost manufacturing in Tandberg China facility, integration and rationalization of R&D and SG&A expenses, integration and global scale of customer support and service capabilities, and scale advantages in supplier relationships. The OVRL-Tandberg deal, which closed in January 2014, is on track with product synergy, distribution, and integration efforts during a six month transition and restructuring period.
