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FalconStor CEO: Ready to Disrupt EMC Data Domain Deduplication?

Falconstor Software (NASDAQ: FALC)  President and CEO Jim McNiel is looking to disrupt a few storage markets in 2013. Among the key targets: Offering a better mouse trap than EMC's (NYSE: EMC) Data Domain deduplication technology. But that's not all. What else does McNiel have planned?

The VAR Guy

January 28, 2013

3 Min Read
FalconStor CEO: Ready to Disrupt EMC Data Domain Deduplication?

Jim_McNiel_FalconStor

Falconstor Software (NASDAQ: FALC)  President and CEO Jim McNiel is looking to disrupt a few storage markets in 2013. Among the key targets: Offering a better mouse trap than EMC’s (NYSE: EMC) Data Domain deduplication technology. But that’s not all. What else does McNiel have planned? Here are some insights from The VAR Guy.

McNiel spoke with The VAR Guy amid the Hurricane Sandy cleanup on Long Island in November. Fast forward to the present, and our resident blogger is finally off the road and has organized some notes from the conversation. McNiel’s top priority at the time was ensuring the safety of FalconStor’s employees while also making sure customer data was safely protected. On both fronts, FalconStor successfully weathered the storm.

The Business of FalconStor

On the business front, 2012 was a transition year for the company. FalconStor reduced expenses in July 2012 to align more closely with the business’s run rate. But the products FalconStor is bringing to market in 2013 “will be highly disruptive,” said McNiel vowed back in November.

While preparing for 2013, McNiel and FalconStor had a basic thesis: There’s too much data and too little time. In the enterprise, IT staffs have sophisticated replication tools to handle that problem. But in the SMB space, companies really don’t have the proper staffing to deploy and manage such tools.

FalconStor’s mission: Take world-class replication technology and package it for SMB customers — along with their channel partners. It must be easy to access, install, configure and manage. “That puts us back in the software business as a full software application,” said McNiel. “It’s about offering the fastest, simplest file recovery in the market.” And the work, he added, doesn’t exclude the cloud.

Another key area of focus involves data deduplication. It sounds like FalconStor has a patent filing that could, potentially, disrupt the market  — maybe even where EMC’s Data Domain business competes. Stay tuned.

Tragic Past, Promising Present

No doubt, McNiel has had his hands full with FalconStor. He was named acting CEO in September 2010, replacing ReiJane Huai — the company’s founder. Huai stepped down amid a customer bribery scandal and committed suicide in September 2011 — a day before he was expected to plead guilty in the case. By June 2012, FalconStor agreed to pay a $5.8 million fine related to the case. By January 10, 2013, FalconStor settled a class action shareholder lawsuit.

Read between the lines and McNiel spent roughly two years cleaning up a mess, while also trying to keep FalconStor focused on innovation. Back in January 2011, McNiel dropped the “interim” title and became the company’s permanent CEO. “There are lots of great people here and I wanted to see this through,” he told The VAR Guy.

During his first year on the job, it was definitely about “righting the ship” while also dealing with quality and reliability issues while striving to make customers happy. “You don’t get credit for that in the public domain, initially, but you do get credit from customers.”

Today, McNiel thinks beyond basic “growth” ideas and wants to make sure FalconStor is being “strategically disruptive.”

His key thought: All of the companies out there buying data protection solutions are getting overcharged for file, archiving and big data solutions. “Why are [technology companies] raking customers over the coals to move data from one place to another and then bring it back?”

Read between the lines and it sounds like McNiel has some disruptive ideas for 2013. The VAR Guy will be listening closely for updates.

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