Dot Hill Systems (HILL) 8-K Other Events

Investor Overview:

Cloverleaf Communications Acquisition

January 7, 2010

Exhibit 99.1

Safe Harbor

With the exception of historical information, the matters

disclosed in this presentation are forward-looking statements.

Such statements involve certain risks and uncertainties that

could cause actual results to differ materially from those in the

forward-looking statements.  Potential risks and uncertainties

are described in the Company’s filings with the Securities and

Exchange Commission, including its Forms 10-K, 8-K and 10-Q.

These forward-looking statements represent the Company’s

judgment as of the date of this presentation.  The Company

disclaims, however, any intent or obligation to update these

forward-looking statements.

2

Executive Summary

•

HILL has substantially completed Step 1 Transformation

Non-GAAP* EBITDA positive Q309

Addressed revenue concentration problem

Launched new product lines based on owned IP

Dramatically retooled our supply chain & lowered cost basis

•

Now Begun Step 2 Transformation –

margin/valuation growth

Board approved initiatives that include investments in SW

Could take us to peer group comparable valuations

•

HILL Products/Vision + CL Products/Vision a Natural Fit

In line with our strategic vision

Accelerates time to market (ttm) by 2 years versus in-house development

Expands total available market (tam) with adjacent high margin markets

•

HILL has done it before -

successfully

Acquisitions and monetization of Chaparral and Ciprico

in similar situations

3

* Non-GAAP:

Excludes the effects of impairment to goodwill or long lived assets, issuing warrants to a customer, stock-based compensation expense,

restructuring and severance costs, one-time legal settlement benefits and foreign currency adjustments and are not in accordance with U.S. generally accepted

accounting principles (GAAP).

Cloverleaf Background

•

Corporate

Storage virtualization provider, with existing products installed at 25 customers

2009 revenues of about $1M

Founded

in

2001,

backed

by

VC

firms

in

U.S.

and

Israel

–

over

$43M invested over 9 years

28

full-time

staff,

primarily

located

in

Israel

–

24 in development and test engineering

•

Products

Core technology from Elta

Systems & Israeli Aerospace Industries

Inherited IP of hundreds of development man-years

I

S

Network

(

),

a

storage

software

virtualization

engine

Enabling heterogeneous storage infrastructure managed from single pane of glass

Scalability up to 12 Petabytes

of virtualized storage

New iSN

Lite

product will extend access to SME and remote offices

All

IP

belongs

to

Cloverleaf

–

soon Dot Hill

•

Customers

Prestigious list of customers in finance, government, legal, education markets

Deployed in large, complex military/defense installations

Sold via OEMs and channel partners in US and EMEA

Solutions capable of scaling non-disruptively to meet enterprise level needs

4

ntelligent

torage

iSN

Integrator

HILL’s Step 1 Transformation 2006-2009

In transition from:

Innovator

Single

Customer

Diversified

Customer Base

Onshore

Operations

Offshore Asian

Manufacturing

Rebuild the Foundation

5

Revenue Diversification

Opportunity for revenue growth as legacy product sales have been

replaced

$63.6

$54.3

$53.9

$72.4

$76.6

$71.0

$52.8

$51.8

$45.7

$56.2

$53.4

$0

$20

$40

$60

$80

Q107

Q207

Q307

Q407

Q108

Q208

Q308

Q408

Q109

Q209

Q309

Legacy

HP

Others

6

HW Centric

HILL’s

Step 2 Transformation 2010-2012

In transition from:

OEM

Customers

Channels

Storage Arrays

Adjacent

Markets

SW Centric

Remodel/Upgrade the House

7

•

Launch Formal Channel Program

GOAL:

Diversify Revenues at higher margins

Provide smoothing function to OEM revenues

Add potential Professional Services revenues

•

Move up the Software (SW) Value Chain

GOAL:

Make SW a material portion of revenue and margin in 3 years

More Firmware and Embedded Data Management Services (DMS)

Server based DMS ‘on top of’

RAIDCore

Standalone Storage related SW

•

Move into Adjacent Higher Margin Markets

GOAL:

Diversify Revenues at higher margins

Standalone Storage appliance market

Unified Storage Market

HILL Step 2 Strategy 2010-2012

8

Cloverleaf Addresses All Three Strategic Initiatives

Current Markets Served

Source: IDC, Gartner Dataquest and Dot Hill estimates

9

•

Dot Hill presently serves the entry level and lower mid range SAN disk array markets

•

Continued growth expected in our core business

Target Markets

Source: IDC, Gartner Dataquest and Dot Hill estimates

10

•

Cloverleaf’s products address a multi-billion dollar storage software market

•

Most significant growth comes from replication markets, driven by compliance and data retention

policies –

24.5% GAGR 2008-2013

•

Heterogeneous and unified virtualized storage are key enablers for growth

•

Mitigates Risk and Cost of In-House Development

Projected internal development of 3 years for similar product

Allows us to  immediately start to compare against CML & FALC offerings

•

Beyond our Internal 3 Year Software Development Plan

All

the

basics

-

Snaps,

VolCopy,

Mirror,

Synch/Asynch

Rep,

Thin

&

Tiered

provisioning

But done across any

storage vendor –

i.e. mix and match

And

NAS

and

SAN

blend

-

Supports

Unified

Storage

Solution

emerging

as

new

trend

•

Accelerates TTM for comparable product by ~2 years

Accelerates margin growth and Step 2 Transformation

•

Acquisition of Technology and Technologists

Identical

philosophy

to

Chaparral

and

Ciprico

acquisitions

•

Solid Data Management/Data Recovery Software

DHS monitoring Cloverleaf for 3+ years

•

Allows for Penetration of the Incremental, Standalone Storage Resource

Management market

Adjacent

high

margin

market

served

by

FALC,

DataCore

and

LSI

(StoreAge)

Cloverleaf Rationale

11

12

•

Very Robust suite of product features

Appliance based –

or SW only using OEM commercial servers

Based on standard off-the-shelf Intel architecture

All features support NAS/SAN and any

storage array

No server based agent SW required

Single Pane, common user interface across all storage and services

HA/DR support with a pair of nodes

Heterogeneous

Snaps, VolCopy, Split Mirror, fCDP

Heterogeneous

Thin provisioning, Automated Tiered Provisioning

Heterogeneous

Asynchronous and synchronous replication

Data migration from any storage array to any storage array

Heterogeneous

Virtualized storage pooling across physical arrays

FC, CIFS/NFS support (iSCSI

Q2 2010, FCOE Q4 2010)

Support for clustering up to 12 nodes for near linear performance

improvements

Existing Cloverleaf Products

12

Potential New Products

•

Near term –

6 to 12 months

Standalone

storage

management

appliance

based

on

iSN

lite

Bundled appliance + Dot Hill storage solutions

Data migration appliance

•

Next 12-24 months

Unified NAS/SAN appliance + storage

OEM software or bundled channel product

•

Future

Unified and fully integrated modular storage platforms

13

Standalone

SAN Bundle

Fully Integrated

Integrated

Software

13

14

Own RAID IP/Bundles

Host Interfaces (FC, iSCSI, LAN)

Ease of Use/Automation

Remote Data Replication/DR

Snapshots

Data De-duplication

CDP/near CDP

Data Migration

Tiered Storage

Thin Provisioning

Unified NAS/SAN Storage

Storage Virtualization

Heterogeneous

Feature

Dot Hill

iSN

DotHill

2/5000

LSI

Falcon-

stor

Datacore

Compel-

lent

iSN

Competitive Comparison

Merger Consideration

•

Total deal value $12 million, 7.5% employee carve out

•

$2.5m in cash

•

Approx $8.78 million in unregistered common stock valued at

30 day average closing stock price of $1.851

•

Approx $0.72 million be settled in restricted shares that will

vest over two years and issued from Dot Hill ESOP

•

Merger consideration to be adjusted up or down to reflect

12/31/2009 Net Book value

Note: Merger consideration subject to adjustments based on the amount of outstanding liabilities of Cloverleaf as of

the closing of the Merger, transaction expenses incurred by Cloverleaf related to the Merger, a net book value

balance sheet adjustment based upon the unaudited consolidated balance sheet of Cloverleaf as of December 31,

2009 and escrow provisions. In addition, there may be a post-closing net book value balance sheet adjustment to

the consideration, payable in cash and stock, based upon the audited consolidated balance sheet of Cloverleaf as of

December 31, 2009.

15

Valuation Considerations

•

Technology Purchase not for customers and revenue

•

Internal

development

of

product

with

similar

feature

set

–

estimated

2 to 3x merger consideration with 3-4 year development schedule

•

Recent comparables of Israeli companies sold with similar products

StoreAge

–

sold for $50 million to LSI

Kaysha

–

sold for $153 million to EMC

Cloverleaf acquisition enables technology purchase today at a fraction of the

cost of an organic development effort with new products ready for launch in

6-12 months, thus accelerating time to market by two years and significantly

reducing development schedule and scope risk.

16

Public Company Comparables*

Compellent

[CML]

3PAR

[PAR]

Isilon

[ISLN]

Falconstor

[FALC]

Double

Take

[DBTK]

Dot Hill

[HILL]

Current Market Cap

$701M

$752

$446M

$185M

$222M

$95M

Annualized Revenues

$124M

$186M

$120M

$94M

$84M

$235M

Last Q Revenue

$32M

$46M

$31M

$22M

$21M

$64M

Price to Sales (TTM)

6.05

3.92

3.77

2.02

2.58

0.38

Enterprise Value/Revenue (TTM)

5.53

3.37

3.12

1.51

1.54

0.14

17

*Table

as

of

Dec

31

st

,

2009

and

graphs

as

of

Sep

30

th

,

2009.

Price to Sales Trends (TTM)

Enterprise Value/Revenue (TTM)

17

18

Financial Model Implications

Financial Model Implications

*Industry consists of the peer set we previously defined: CPL, FALC, PAR, LSI

•

More comprehensive model at next earnings call

•

Core Business + Strategic Investments (Channel Program + RAIDCore

+ Cloverleaf)

Core business (Storage Arrays to OEM’s): significant improvement over last 12 months. 

Expect a break-even to positive non-GAAP EBITDA in 2010

Channel Program: Should have positive non-GAAP EBITDA in 2010 depending on

revenue ramp

RAIDCore: Unlikely to be non-GAAP EBITDA positive in 2010

Cloverleaf: Unlikely to be non-GAAP EBITDA positive in 2010

•

Expect 2010  overall to be non-GAAP EBITDA negative but with

improvement over 2009

Expect to fund as much of the strategic investment as possible with core operating

results

Non-GAAP:

Excludes the effects of impairment to goodwill or long lived assets, issuing warrants to a customer, stock-based compensation expense, restructuring and severance

costs, one-time legal settlement benefits and foreign currency adjustments and are not in accordance with U.S. generally accepted accounting principles (GAAP).

18

Executive Summary

•

HILL has substantially completed Step 1 Transformation

Non-GAAP* EBITDA positive Q309

Addressed revenue concentration problem

Launched new product lines based on owned IP

Dramatically retooled our supply chain & lowered cost basis

•

Now Begun Step 2 Transformation –

margin/valuation growth

Board approved initiatives that include investments in SW

Could take us to peer group comparable valuations

•

HILL Products/Vision + CL Products/Vision a Natural Fit

In line with our strategic vision

Accelerates time to market (ttm) by 2 years versus in-house development

Expands total available market (tam) with adjacent high margin markets

•

HILL has done it before -

successfully

Acquisitions

of

monetization

of

Chaparral

and

Ciprico

in

similar

situations

19

* Non-GAAP:

Excludes the effects of impairment to goodwill or long lived assets, issuing warrants to a customer, stock-based compensation expense,

restructuring and severance costs, one-time legal settlement benefits and foreign currency adjustments and are not in accordance with U.S. generally accepted

accounting principles (GAAP).