FalconStor Software Inc.'s best competitive advantage in the crowded storage market may be an intangible one: The startup is run by people with intense loyalty to FalconStor and to one another, people who don't want to be anywhere else.

The Melville, N.Y., company's premise is that storage can be managed over a network, regardless of storage-and transport-media type. Storage "can be aggregated and provisioned over the network--like electricity," CEO ReiJane Huai says. The approach creates a virtual storage disk that can be managed at one location, which can mean simpler management than with conventional storage setups.

FalconStor's IPStor storage-management software connects storage systems over an IP network. Its immediate attraction may be its ability to combine block-access and file-access storage in one system, regardless of a storage system's vendor and interface. "What FalconStor brings to the table is that it can help manage the efficient utilization of storage in a network," says Anne Skamarock, an analyst at Enterprise Management Associates.

FalconStor's executive team is unusually seasoned for a startup. Huai was president and CEO of Cheyenne Software when Computer Associates bought it in 1996, and later was general manager of CA's Asia region. Other FalconStor executives have similarly deep backgrounds.

	FalconStor CEO Huai has a hands-off approach.

Yet the company may have a difficult time convincing potential customers to move to its system, since many are still leery of data quality over an IP network. But, Huai says, they'll come to understand the system's benefits.

The 2-year-old FalconStor has a startup culture where people are willing to take engineering and marketing risks, Huai says. That culture has been fostered by Huai, who terms himself a hands-off manager. And he dislikes meetings. "I spend the majority of my time not having meetings," he says. When there's a need for a briefing, Huai is concise and expects other participants to be, as well. If they're not, says Wayne Lam, FalconStor's VP of marketing, who's known Huai since the Cheyenne days, Huai may walk out--or doze off.

But that doesn't mean Huai isn't involved. "A lot of meetings are in the hallway," Lam says. Plus, each of FalconStor's 125 employees has multiple roles to facilitate idea exchange.

For a hands-off type, Huai knows a lot about the business. That's because he asks good questions, says VP of sales Wendy Petty, who's known him for 14 years. It's also because he's tireless: "Rei works 24 hours a day," she says.

Huai doesn't mind work slipping so much into his personal life. And employees say they, too, blur the lines. It's worth it, they say, because of a sense of loyalty that makes them feel they'll be taken care of. Like the way elaborate sushi dinners accompany late nights at work, or the way Huai set up a fund for the family of an engineer who died of a heart attack. "I wouldn't call FalconStor a cult," Lam jokes, "but once you join, you feel you're part of the family."