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FalconStor lands OEM deals with Kaminario, X-IO

FalconStor’s 2015 revenue has been paltry at the mid-way point of the year, but the vendor is crowing about new OEM deals for its FreeStor data services software.

FalconStor said it signed three OEM agreements and four service provider deals for FreeStor last quarter. The OEMs include storage vendors X-IO Technologies and Kaminario.

X-IO is using FreeStor for software services in its Iglu SAN platform launched Tuesday. X-IO did not advertise FalconStor as the OEM technology for Iglu, but did not deny it and gave FalconStor permission to disclose the deal.

All-flash vendor Kaminario is expected to use FreeStor to add more storage management features to its K-2 arrays, which were originally designed with performance in mind more than manageability. Kaminario added thin provisioning, inline deduplication and compression, and encryption in 2014, but replication remains a roadmap feature. Replication is covered by FreeStor, which was originally developed for all-flash vendor Violin Memory and is used with Violin Concerto arrays.

FalconStor CEO Gary Quinn said cloud service providers Egenera and Telefonica have signed on to resell FreeStor. He said FalconStor now has six OEMs for FreeStor along with four service providers.

FalconStor can use the sales help. Revenue for last quarter was $9.6 million, down from $11.3 million last year and $10.1 million in the first quarter of this year. The vendor lost $2.2 million, down from $3 million last year. With $18.8 million in cash, FalconStor needs to reverse historical trends and start turning a profit soon.

Quinn is trying to spin FreeStor and its partnerships as a turning point for the company.

He began FalconStor’s earnings call Wednesday by saying, “The first half of 2015 is a tale of two cities story. It’s the beginning of a new era and winding down of the past.”

He ended with: “Past performance and future opportunities are on the opposite ends of the spectrum” for FalconStor.

None of FalconStor’s OEM partners are market leaders, however, so it will need a lot more deals and enterprise customers to turn things around.