FalconStor hovers over Middle East

By its own admission, the Middle East has been a “neglected and under-tapped” part of storage software vendor FalconStor’s business. But the company’s VP for Northern Europe and MEA, Thomas Barrett, is trying to change that by identifying potential partners to champion its cause in the region. Channel Middle East hears why storage resellers looking for new opportunities should be sitting up and taking notice.

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FalconStor hovers over Middle East
By  Andrew Seymour Published  April 8, 2010 Communications Middle East & Africa Logo

Where does the channel fit into FalconStor’s go-to-market strategy?

The one thing that we always try and drive home is that we are a channel-only company. There is a big misconception about FalconStor being enterprise- and OEM-only and I think what we did as a start-up is we made sure that we had some very good OEM relationships to give us credibility and give us good exposure. Through that we became the number one VTL software company, for example, in the market place. But the majority of our business is transacted through our tier-one and tier-two channels.

You recently came to Dubai to meet prospective Middle East partners. How did that go?

We met with a number of companies that wanted to get engaged, the majority of which were tier-one so they were fairly established resellers in the region. We did meet one tier-two company who, although perceived to be quite small from a distribution level, seemed to have lots of contacts across the whole of the Gulf, so that could prove to be beneficial if it works out for us. We have definitely got an investment. We are getting a lot of enquiries about the business benefits we bring to the market.

What are you looking for from potential channel partners?

The Middle East is physically and geographically remote so what we are looking for is partners that are able to commit technical capability in terms of training, getting accredited and sales because the more we empower these guys the easier our job is going to be. If the Middle East picks up really well then we would open up offices out there and put the money where our mouth is, so to speak.

How many partners are you looking for initially?

I don’t perceive us requiring 20, 30 or 40 resellers. I probably see us with a good half dozen, maybe a few more, and potentially one regional-style distributor.

Is there enough margin in the products you offer to warrant a distribution channel then?

Yes, there is. In the UK, our tier-two model is very strong. I have got three distributors there at the moment and you might think that’s a lot but each of those three distributors has got specific needs and capabilities which fit with us quite nicely and they don’t compete head-on. We build a model in terms of making sure that there is a margin allowable for the distributor so that they can then resell out into the channel — and that will be non-competitive. If, for example, we started off with a few resellers who actually signed up directly with us while we found a suitable distributor, it wouldn’t mean that when a distributor came in that reseller would then be out of place. It could then start to buy from the distributor without any commercial penalty. We are obviously trying to be as flexible as possible to meet the needs.

In this region it is common to see the hybrid reseller-distribution model in operation. Would that be an option you entertained? 

I did get that request. We met with one company who said, “we are a reseller but we also distribute.” I guess in an unestablished market that might work; in more established markets you would make other resellers very nervous.

Is it easy for partners to sell Falconstor software?

Yes, I think it can be a very straightforward sale with a turnkey solution, but there can obviously be some very good service-led capability. And again, that adds value and margin for the partners because the ones that can deliver that service can differentiate themselves over the ones that can’t. We’ve got products that compete in the EqualLogic space of this world — so simple turnkey SAN solutions — products that compete with Data Domain and products that run in the virtualised space and run extremely well with VMware and that side of things. At the end of the day the channel wants to make margin and I think that one of the big things we can give them is a differentiator.

So where do you hope the business to be by the end of 2010?

I think we would expect to have a good set of half a dozen to a dozen trained, accredited partners with agreed business plans. We would want to sit down with them and discuss the realistic targets which could deliver acceptable revenues for us for year one. And then, if that was achievable and the pipeline was big enough to expand upon, we would have to look seriously into potentially putting resource in-country for 2011.

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