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FalconStor gets VTL software back on IBM boxes

FalconStor signs a deal to sell its virtual tape library software on IBM hardware again, five years after losing its IBM VTL partnership.

FalconStor's deal signed this week to sell its virtual tape library deduplication software on IBM hardware comes five years after IBM ended a similar VTL software deal with FalconStor.

The new deal calls for global distributor Avnet Technology Solutions to sell a FalconStor VTL IBM Series appliance. The appliances consist of FalconStor VTL software on IBM System x3650 M4 Express servers and IBM System Storage EXP2512 Express Storage Enclosures. The systems will support IBM Tivoli Storage Manager (TSM) backup software.

FalconStor used to dominate the VTL software market as an OEM partner to IBM, EMC and other major storage vendors. But FalconStor partners dropped its software after developing or acquiring their own dedupe products. IBM stopped selling FalconStor's data reduction software in 2008, following its acquisition of Diligent Technologies that gave IBM the ProtecTier family of dedupe backup products.

The new IBM-FalconStor appliances are aimed at small and medium-sized businesses and small to medium enterprises that find ProtecTier enterprise systems too large and expensive.

Tim Sheets, FalconStor VP of product marketing, said the new appliances are designed for customers with as little as 12 TB of backup data. "IBM doesn't really have a true midmarket solution," he said. "It has ProtecTier, but it's for the market with 200 TB and above. Putting our VTL packaged on IBM hardware certified with TSM makes a lot of sense."

The deal is part of FalconStor's strategy to become a relevant player in disk backup as integrated backup appliances gain in popularity. These appliances include the backup software, server and storage in one box.

"FalconStor was born out of the VTL space. We're the company that created VTL technology," Sheets said. "But backup is only part of the equation. We focus on instant local recovery with snapshots. We also focus on full automated recovery; we can recover entire systems. We want to get the server up, proper drivers loaded, applications reloaded and the data back up."

The loss of its OEM VTL business started FalconStor on a decline that it's is still trying to recover from. The vendor has lost money in each of the last 13 quarters, including a $4.4 million loss on revenue of $15.3 last quarter.

The nadir for FalconStor came when the U.S. Securities and Exchange Commission charged it with bribing JP Morgan Chase employees to buy its software. That brought a change in CEOs from founder ReiJane Huai to current boss Jim McNiel and a $5.8 million fine levied by the SEC last summer.

FalconStor has pinned its recovery plans to the delivery of a data protection services-oriented platform called Bluestone. Originally scheduled to arrive in 2012, then in the first half of 2013, Bluestone hasn't made it yet, but Sheets said it remains the key to FalconStor's product plans. Bluestone is now expected by the end of 2013 at the low end of the market, he said.

"Bluestone is alive and well," Sheets said. "We call it a 'services-oriented data protection architecture.' It will allow us to move forward to the edge and core, simplify the user experience, and do things like global dedupe. It lets us have a single platform to turn services and features on, based on use case and customer requirements."

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