OEM Partnership with Falconstor

Friday, February 24, 2006

   High Availability System Provider Melrow Signs OEM Partnership with FalconStor

FalconStor and Melrow Will Provide iSCSI Appliances for the High Availability Market 

Oostvoorne, Netherlands, February 24—FalconStor Software, Inc. (Nasdaq: FALC), a leading developer of network storage software solutions, today announced it has entered into an OEM agreement for a comprehensive iSCSI-based solution with Melrow Technology, a leader in design, manufacture and supply of high availability rack mount servers with Intel or AMD multi- processing technologies, as well as storage subsystems and cluster systems. Melrow is the largest Intel provider in the Benelux, a customs union comprising Belgium, the Netherlands and Luxembourg. Melrow will OEM FalconStor’s iSCSI Software Suite to provide ipSAN  Appliances.

FalconStor iSCSI Software Suite enable to consolidate storage and provisioning over IP/iSCSI. It simplifies and centralizes the management of storage by allowing IT administrators to leverage an existing IP network. This creates a cost-effective SAN storage solution that can consolidate and manage a wide variety of storage devices.

“FalconStor’s technology dovetails with our mission to deliver highly available systems to our customers. Their iSCSI Software Suite provides high availability by eliminating single points of failure, as well as rapid recovery from disk failure and a wide variety of data protection services,” said Alex Vellinga, CEO at Melrow Technology NV. “We are excited about our relationship with FalconStor as we work together to provide the highest levels of availability for computing environments.”

The ipSAN powered by FalconStor iSCSI Software Suite delivers continuous data availability and centralized storage management including the aggregation and provisioning of iSCSI disk to application hosts over an existing IP network.

With today’s dwindling corporate and IT budgets, organizations of all sizes are aggressively searching for ways to maximize investments in their existing storage infrastructure. This fact, coupled with shrinking backup windows, escalating data growth, and the growing need for a cost effective, reliable, business continuity solution are pushing the limits of internal resources.

The ipSAN powered by FalconStor’s iSCSI Software Suite is designed specifically to extend storage devices using the industry standard iSCSI protocol to deliver advanced storage services over an existing IP network.

“We are delighted to be working with technology leader Melrow,” said Guillaume Imberti, President & General Manager of FalconStor Emea. “FalconStor’s cost-effective iSCSI Software Suite provides high availability, centralized management and rapid recovery, which are necessary features for the highly available environments that Melrow serves.”

FalconStor’s iSCSI Software Suite offers significant benefits to highly available environments including:

• Pre-certified with built-in iSCSI initiators from Microsoft and Novell, among others.
  
• Pre-certified with iSCSI HBAs or TCP/IP Offload Engine (TOE) NICs from leading vendors.
  
• Reduces storage administration overhead through centralized management and provisioning.
  
• Leverages existing IT infrastructure and expertise with consolidated storage and provisioning over IP/iSCSI.

• Simplifies and centralizes the management of storage by allowing Administrators to leverage an existing IP network to create a cost-effective SAN storage solution that can consolidate and manage a wide variety of storage devices.

• Eliminates single point of failure (SPOF). It can be configured for maximum redundancy, with a dual network connection to the IP network, as well as a dual I/O channel to each storage device.

• Provides a unique delta-based snapshot backup service designed to safeguard against soft-errors such as accidental deletions, file corruptions, and virus attacks. In addition to increasing backup frequency, and therefore reducing the risk window, restore can take place instantaneously via the recovery facility

• In addition to provisioning disks to hosts attached to an IP network, the iSCSI Software Suite offers a wide variety of optional storage services including Snapshot Service, and Replication Service to reduce operating costs and ensure continuous data availability, reliability, and optimum performance of an iSCSI infrastructure.

About Melrow Technology
Melrow Technology, located in The Netherlands, is a leader in design, manufacture and supply of high availability rack mount servers with Intel® or AMD multi processing technologies, as well storage subsystems and cluster systems. By developing new High End systems, Melrow has been successful in moving quickly to develop new products in response to changing market conditions and clients' needs. Melrow has developed strategic alliances with a number of selected key technology suppliers and has worked to build and enhance these relationships over the years. These alliances enable the company to remain at the forefront in innovation and deliver cutting edge solutions to the marketplace. For more information, please visit http://www.melrow.nl/about/profile.htm.

About FalconStor
FalconStor Software, Inc. (Nasdaq: FALC) is a leading developer of innovative network storage software that optimizes the protection and availability of enterprise and SMB data and applications, ensuring nonstop business productivity while simplifying storage and backup management to reduce operational costs.  FalconStor’s award-winning solutions—IPStor® Enterprise Edition, VirtualTape Library, and iSCSI Storage Server—are available from major OEMs, system integrators, and resellers, and are deployed worldwide by governments, educational institutions, and Fortune 1000 enterprises across industries including aerospace, energy production, financial services, healthcare, law, manufacturing, and telecommunications.

FalconStor is headquartered in Melville, NY, with offices throughout Europe and the Asia Pacific regions including Paris, Tokyo and Taiwan. FalconStor is an active member of the Storage Networking Industry Association (SNIA) and Fibre Channel Industry Association (FCIA). For more information, visit www.falconstor.com

This press release 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 include: delays in product development; market acceptance of FalconStor’s products and services; technological change in the storage and networking industries; competition in the network storage software market; the potential failure of FalconStor’s OEM partners to introduce or to market products incorporating FalconStor’s products; intellectual property issues; and other risk factors discussed in FalconStor’s reports on Forms 10-K, 10-Q and other reports filed with the Securities and Exchange Commission.

FalconStor, TimeMark, TimeView, DiskSafe and FileSafe are trademarks or registered trademarks of FalconStor Software, Inc.  All other company and product names contained herein may be trademarks of the respective holders.