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FalconStor CEO Jim McNiel: 'There will be change'

FalconStor interim CEO Jim McNiel said he intends to stay on the job long-term and plans to change the storage software vendor's OEM business model to a more solutions-branded strategy.

GRAPEVINE, Texas – FalconStor Software interim CEO Jim McNiel said he is looking to change the storage management and data protection vendor's primary OEM business model to an "end-user-centric, solutions-branded" strategy.

McNiel took over as interim CEO of the beleaguered storage software vendor two weeks ago when founder ReiJane Huai suddenly resigned as CEO after disclosing that improper payments were allegedly made in FalconStor's contract with a customer.

In an interview at Storage Networking World this week, McNiel said FalconStor is developing new products that focus on storage services, which he expects to begin shipping early next year.

"When I talk to IT professionals and ask them what their jobs are, they say it's to deliver services," McNiel said. "They deliver SLAs, and that is how we measure an IT professional. So they want a data protection strategy that matches their SLAs. This is what we are doing right now. We are developing services-oriented data protection."

McNeil, who was an executive at Cheyenne Software when Huai was CEO in the 1990s, joined FalconStor last December as chief strategy officer. Although his title is interim CEO, McNiel said he expects to stay on as FalconStor's CEO to reshape the company.

"I hope so," he said. "I have no reason to believe I shouldn't be. I'm here to stay. I'm not a shock to the system because I've been here. But, having said that, after one person has been in charge for 10 years, there is going to be change. There is going to be change universally, and that is fairly positive."

FalconStor sells storage management and data protection software, mostly through resellers and OEM deals with storage vendors. But its OEM business model took a beating over the past few years due to industrywide changes in the virtual tape library (VTL) and data dedplication market. EMC, IBM and Sun all resold FalconStor VTL software a few years back. However, EMC acquired Data Domain and IBM bought Diligent for deduplication, and Oracle bought Sun and de-emphasized its OEM relationships.

"It was a perfect storm. The good news is they thought enough of the [VTL/deduplication] technology to own it," McNiel said. "The bad news is, they didn't buy FalconStor."

FalconStor's main products include VTL, data deduplication, Network Storage Server iSCSI SAN software and continuous data protection (CDP).

McNiel sees an opportunity to position FalconStor as an open player in storage services because its technology runs on any hardware. "We are a player in the open environment. It helps to block out the vendor tyranny," he said. "We want to move from engineering-, OEM-focused company to an end-user-centric, solutions-branded company. We need to bring total solutions to businesses. The FalconStor brand is to develop a turnkey, easy-to-deploy solution."

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