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FalconStor shutters Australian office, merges Honkers and China ops

Cash-saving plan came from on high and puts the channel on the front line

Internet Security Threat Report 2014

Troubled storage vendor FalconStor has closed its office in Australia and merged its Hong Kong and China operations.

The Reg has confirmed a report in CRN about the closures, which took place in October as a cost-cutting and effort-focussing measure.

The company is not abandoning the region altogether. Presences in Singapore, Malaysia, China, Japan and Taiwan continue and no jobs have been lost other than in Australia.

The company's head of AsiaPac Suresh Nair told The Reg the Australian office got the bullet because it had higher costs than other Asian markets and is also "mature". That's code for saturated with storage vendors that have already won business with a bank or telco that represents a big enough account to get a sales outpost to break-even point quickly.

Australia will now be served by partners, with Nair saying "We have streamlined our models to be more partner centric."

"Our partners are pretty much self sufficient dealing with implementation and support," he added. "As far as customers are concerned, there will be no gap."

Nair also sent The Reg the email sent to local customers. Here's a telling excerpt:

"In an ongoing effort to optimize our solution offerings, we have carefully evaluated our activities and realized the need to re-balance and adjust our business model. This includes the products we develop, the markets we address, and the geographies that we serve.

For the ANZ region, this means that FalconStor will not have an in-country presence in Australia with local resources but instead rely on channel partners. We will be focused on established and committed partners who can support the customer base in the Australia market. FalconStor APAC team will provide the necessary support infrastructure and enablement to ensure that these channel partners are well equipped to successfully serve you. While this may change our investment approach, I want to assure you that this does not change our focus and commitment to Australian customers. This was a timely and important decision made in light of executive changes, a new CEO, Gary Quinn, and investors that we have recently secured."

FalconStor's dedicated operations lasted around eighteen months in Australia. Four redundancies have resulted from its demise. ®

Internet Security Threat Report 2014

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