FalconStor Software announced that its Network storage Server (NSS) is being bundled as part of HP’s Business Continuity and Disaster Recovery service offering.  The service is aimed at mid-sized customers that are unhappy with tape-based recovery and can’t afford high end replication solutions from the likes of EMC, Hitachi, IBM and NetApp. 

The key to FalconStor’s technology is its ability to support heterogeneous storage environments. The BC/DR service is coming from the EDS side of HP which, like many services companies has to deal with multiple vendors and technologies and is using the NSS to help simplify the migration from third party arrays into HP-based storage systems that reside in HP’s data centers around the globe.

HP is bundling the FalconStor NSS as part of its BC/DR services offerings which will include snapshot and recovery capabilities from FalconStor. HP will obviously target sites that are heterogeneous in nature that are relatively small (e.g. under 25TB of production data). HP, like most service companies will charge on a $/TB/month basis to offer a pay-as-you-go model that many HP mid-sized customers are demanding. The service is available immediately and has actually been in the market since October.

Visionary Jim McNiel of Falconstor Talks Cloud Computing

Why is this Deal Important for FalconStor?

The HP deal is an important milestone for FalconStor to demonstrate some momentum under its new management.  HP’s Enterprise Services (ES) division is one of the preeminent service organizations in the world. EDS was IBM’s main competitor globally and with about $40B in revenue worldwide HP’s ES group represents a significant win for FalconStor. The deal could substantially add to FalconStor’s revenue in 2011 and FalconStor’s stock, which has been pummeled lately, is up significantly on the announcement.

The key to FalconStor’s technology is that it’s open. The company competes largely on the basis of enabling data protection solutions for virtually any heterogeneous environment. The key question we’re watching is can FalconStor continue to follow this win up with others to prove to investors and customers that it can regain momentum in a very competitive marketplace?

Data protection is at an inflection point and companies like Falconstor, by leveraging open philosophies, virtualization and continuous data protection technology, could disrupt entrenched competitors such as EMC and IBM which largely sell proprietary solutions in silos. These traditional companies are very much entrenched however and tend to do very well by bundling data protection solutions in with other offerings. FalconStor will need a string of successive customer wins and flawless product execution to make a dent in the old guard’s armor. Cloud service providers are a key potential channel for the company and HP through its EDS acquisition is in a good position to compete.

{Cross-posted at Wikibon Blog]