Falconstor Software, Inc. · OTC:FALC
Falconstor Software — Q1 2016 Earnings Presentation
30 slides from Falconstor Software's earnings presentation, May 2016
Slide 1: Q1 2016 Earnings Call
Intelligent Abstraction – Intelligent Predictive Analytics – Intelligent Action Q1 2016 Gary Quinn - CEO & President Earnings Call Lou Petrucelly – EVP & CFO © 2016 FalconStor Software®. All Rights Reserved
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation includes forward-looking statements that involve risk and uncertainties that could cause actual results to differ materially from the forward-looking statements. These risks and uncertainties are discussed in FalconStor’s reports on Forms 10-K, 10-Q and other
Slide 3: Our Mission
Our Mission FreeStor helps IT organizations realize more economic value out of existing environments and any future storage investments while reducing complexity, maximizing flexibility and improving operational efficiency FalconStor Confidential 3
Slide 4: Q1 2016 Financial Summary
Q1 2016 Financial Summary FalconStor Confidential 4
Slide 5: Q1 2016 Summary Overview
Q1 2016 Summary Overview Q1 Q4 Q1 US$ 000’s 2016 2015 2015 Total GAAP Revenue $7,432 $9,395 $19,940 Total GAAP Revenue $7,432 $9,395 $8,665 Excluding Joint Dev. Total Bookings $7,402 $10,038 $11,713 Total Non-GAAP Expenses $10,647 $10,679 $13,040 Gross Margin Non-GAAP 73% 77% 72% Q1 Q4 Q1 2016 2015
Slide 6: Deferred Revenue Metrics
Deferred Revenue Metrics Deferred Revenue Mix as of 3/31/16 Deferred Revenue Mix as of 12/31/15 29% 28% 71% 72% Product Support/Service Product Support/Service Deferred Revenue Weighted Avg Life – 3/31/16 2.93 3 2.29 1.94 2.5 2 1.5 1 0.5 0 Product Support/Service Total FalconStor Confidential 6
Slide 7: Available Market
AVAILABLE MARKET FalconStor Confidential 7
Slide 8: Competitive Advantage: Technology Waves
Technology Waves Cost, Performance and Agility Disruption Client/Server Cloud / Services Centric Centric Competitive Advantage $10B $14B Block Oriented Object Oriented • High Performance, • Flexible and Low latency Modular • Dedicated Storage • IaaS resources • Legacy interfaces • Exposed via API Di
Slide 9: IDC Storage SW Market Forecast
IDC Storage SW Market Forecast SW 2016 2017 2018 2019 CAGR Segment Data protection $6,283.3 $ 6,601.5 $6,935.8 $7,656.0 5.1% Storage Mgmt. $908.7 $1,078.0 $1,278.9 $1,800.0 18.6% Replication $2,796.0 $3,031.7 $3,287.3 $3,865.0 8.4% SDS $700.0 $1,134.1 $1,837.4 $4,823.0 62.0% Archive $1,544.7 $1,636.
Slide 10: FreeStor Use Case TAM ($M)
FreeStor Use Case TAM ($M) (Total Available Market By Segment) Use Cases mapped to 2016 2017 2018 2019 CAGR segments Multi-Tenancy $901.4 $1,029.9 $1,166.6 $1,428.7 12.2% Primary Protection $ 3,980.5 $4,210.3 $4,454.1 $4,987.5 5.8% Auto-Tiering $783.5 $1,111.7 $2,229.6 $3,613.8 46.5% Archive $1,235.
Slide 11: Adoption Rate & Interest in SDS Technology
Adoption Rate & Interest in SDS Technology Poll results from 2014 and 2015 Gartner Data Center, Infrastructure & Operations Management Summits Not Doing Actively Anything Investigating Currently 36% 38% Full Piloting Limited Deployment 12% Deployment 7% Source: Gartner # G00301082, April 2016 7% Fal
Slide 12: Storage Capacity Distribution 2017 vs. 2015
STORAGE Q4 2015 “Block “ Storage Click to editCapacity Master text Distribution styles – 2017 “File “ vs. 2015 Second level Click to edit Q24/25. Master text styles Approximately, “Object“ how is Second your organization's level disk-based storage capacity currently distributed across the following
Slide 13: Key Storage Vendor 2015
STORAGE Q4 2015 Click to edit Master text Key Storage Vendor styles 2015 Second level Click to Q.30 edit Master Which vendortext styles does your level Second organization currently spend the most with on storage? Source: 451 Research, Voice of the Click to edit Master Enterprise: text Q4 Storage, s
Slide 14: Key Storage Vendor 2017
STORAGE Q4 2015 Click to edit Master text Key Storage Vendor styles 2017 Second level Click to Q33. edit Master Which vendortext dostyles you expect Second levelyour organization will spend the most with on storage in 2 years? Source: 451 Research, Voice of the Click to edit Master Enterprise: text
Slide 15: Software Defined Storage Adoption Plans
STORAGE Q4 2015 Software Defined Storage Adoption Plans SDS is still in the early days of adoption, but 59% have already, or are considering implementing. Click to edit Master text Software Defined styles Storage Second level (SDS) Yes, ClickDoes Q4. to edityour Master text styles Considering organi
Slide 16: FreeStor Update
FREESTOR UPDATE FalconStor Confidential 16
Slide 17: Introducing FreeStor Analytics
Introducing FreeStor Analytics Improving Business Value Through Heterogeneous Data Management Empowering the Enterprise customer looking to become an Internal Service Provider or a Managed Service Provider looking for an economic edge: • Improve service level objectives • Improve economic costs of s
Slide 18: How Data is Managed Now… And In The Future
How Data is Managed Now… And In The Future FreeStor takes a comprehensive approach to real-world data-management challenges Intelligent Abstraction Intelligent Predictive Analytics Intelligent Action FalconStor Confidential 18
Slide 19: FreeStor – What's New
FreeStor – What's New Storage Personnel Optimization and Agility – Centralized monitoring, analytics, and configuration – Native iPhone and Android Apps for monitoring and mobility Service Level Objective Achievement – Streaming analytics and real-time insights – Real-time performance, health an
Slide 20: FreeStor – What's New
FreeStor – What's New Self-Service Enablement – New GUI to simplify and improve usability – Proactively detect and alert using real-time analytics – Personalized, customizable dashboards by user Cost/Performance Maximization – Historical and real-time trends and reports – OpenStack Cinder Driver
Slide 21: Real World Value
Real World Value 90% 1 PREDICT 20 X Less THE FUTURE FASTER LOWER COST ONE TOOL NO SURPRISES • Provision storage in • Pay up to 90% less • Single pane of • Track utilization and 6 clicks - less than 1 than when buying glass for ALL predict capacity minute* same features & storage • Better forecasting
Slide 22: FreeStor Performance
FREESTOR PERFORMANCE FalconStor Confidential 22
Slide 23: FreeStor Success
FreeStor Success 23% Of The Forbes Global 500 Use FalconStor Enterprise MSPs OEMs Customers DCS FalconStor Confidential - All Rights Reserved 23
Slide 24: FY '15 Total Bookings Legacy v New
FY ‘15 Total Bookings Legacy v New FreeStor 2% 15 Transactions Renewals 42% 157 Transactions FreeStor Technology 16% Existing 40% FalconStor Confidential 24
Slide 25: Total Bookings Legacy v New Q1 2015 Q1 2016
Total Bookings Legacy v New Q1 2015 Q1 2016 Renewals 48% FreeStor 0% FreeStor Tech 16% 7 Existing Transactions 36% 29 Transactions 72 Transactions FalconStor Confidential 25
Slide 26: FreeStor Product Transactions
FreeStor Product Transactions 300 251 250 200 150 100 79 58 43 42 50 29 0 Q1 '15 Q2 '15 Q3 '15 Q4' 15 Q1 '16 Cummulative FreeStor (Subscription) FreeStor Tech (Traditional) Consolidated FalconStor Confidential 26
Slide 27: FreeStor Q1 2016 vs FY 2015 Technology Sales Summary
FreeStor Q1 2016 vs FY 2015 Technology Sales Summary Q1 ‘16 % of FY ‘15 # FY ’15 Q1 ‘16 Customer License Q1 ‘16 # of FY’ 15 of Bookings Bookings Type Type Accounts Bookings Accounts Value Value Achievements FREESTOR MSPs Subscription 8 $193K FREESTOR Enterprise Subscription 7 $472K FREESTOR Technolo
Slide 28: FreeStor Q1 2016 vs FY 2015 Technology Sales Summary
FreeStor Q1 2016 vs FY 2015 Technology Sales Summary Q1 ‘16 % of FY ‘15 # FY ’15 Q1 ‘16 Customer License Q1 ‘16 # of FY’ 15 of Bookings Bookings Type Type Accounts Bookings Accounts Value Value Achievements FREESTOR MSPs Subscription 8 $193K 13 $545K 282% FREESTOR Enterprise Subscription 7 $472K 10
Slide 29: Q&A
Q&A FalconStor Confidential 29
Slide 30: Thank You
THANK YOU Intelligent Abstraction – Intelligent Predictive Analytics – Intelligent Action Corporate Headquarters EMEA Headquarters Asia Headquarters FalconStor Software, Inc. FalconStor Software, GmbH Room 1901, PICC Office Tower, 2 Huntington Quadrangle, Landsberger Str. 312 No. 2, Jian Guo Men Wai