As many of you know, in late 2017, a new team set out to reinvent FalconStor by modernizing data backup and archival for enterprises and managed service providers. Straight away, we understood after many discussions with industry experts, existing partners and customers, that people who have known FalconStor and worked with the company through ups and downs were eager to hear what was next and see us succeed.
Going in, as a longtime public company focused on one technology sector, we knew that both our challenges and progress would be on full display for all to see. Now, more than three years later, this transparency is a true asset for us. In fact, just last week, we released Q2 and H1 2021 results. Not every metric was up and to the right – it never is when you reinvent a mature software company; for example, our quarterly revenue growth is inconsistent as we modernize our revenue streams. But it is clear that we are on a trajectory to deliver value to our partners and customers, meet our objectives, and drive shareholder value.
Today’s FalconStor will continue to focus on the following objectives, as shared many times with our customers, partners, journalists, analysts, and investors:
- Modernize Data Protection. With an exacting focus on enterprise and public sector customers and managed service providers, we are modernizing backup across tape, disk and cloud, bringing new levels of data security into the mix and enabling the unstoppable move toward Backup as a Service. We are grateful for our collaboration with our customers and partners as they help us understand their needs intimately and are making tremendous progress with their guidance.
- Transform to a Subscription Software Company. Our product mix has moved entirely to software, thereby eliminating the hardware sales which had been the lion’s share of the company’s revenue in the past, and 66% of our revenue is now recurring, demonstrating our focus on where the value is generated and on meeting our customers’ needs every day.
- Build an Efficient and Profitable Operating Model. We have focused our commercial activities on key segments and GEOs where our technology shines, including expanding our focus on IBM i environments, serving managed service providers, and securing data for long-term retention, to generate “strategic” revenue. We also focus relentlessly on delivering returns with the appropriate level of investment to realize our potential, as demonstrated by delivering positive cash flow over the past four quarters. Similarly, we exited areas that did not make strategic sense, like the hardware sector, and GEOs where we were not set up for success, like the Chinese market.
These are the drivers of the new FalconStor with our relentless focus on software-driven value for the new world of enterprise data protection backed by years of delivering proven solutions to our customers while taking in consideration their requests and the evolution of the market. Our strategic focus and trajectory of results are being noticed and have enabled the company to raise over $4M in new growth capital during 2021, engage new customers and ecosystem partners, and begin acquisitions talks to accelerate our overarching objective of modernizing backup.
Going forward, we will maintain our transparency and are thankful for the well wishes from so many throughout the industry. Thank you for your ongoing support.