FalconStor Software, Inc.

2 Huntington Quadrangle
Melville, New York 11747
631-777-5188

www.falconstor.com

Sales

$17 million

Business Description 
FalconStor Software, Inc. ("FalconStor" or the "Company") is a provider of
network storage infrastructure software solutions and related maintenance,
implementation and engineering services. FalconStor's unique open software
approach to storage networking enables companies to embrace state-of-the-art
equipment (based on SCSI, Fibre Channel or iSCSI) from any storage manufacturer
without rendering their existing or legacy solutions obsolete. Several strategic
partners have recognized the industrial strength of FalconStor's flagship
software, IPStor(R), and utilized it to power their special purpose storage
appliances to perform Real Time Data Migration, Data Replication, Virtual Tape
Library backup, and other advanced storage services. IPStor leverages the high
performance IP or FC based network to help corporate IT aggregate storage
capacity and contain the run-away cost of administering mission-critical storage
services such as snapshot, backup, data replication, and other storage services
in a distributed environment. Over 400 customers around the world have deployed
IPStor in production environments to manage their storage infrastructure with
minimal TCO (Total Cost of Ownership) and optimal ROI (Return on Investment).
FalconStor's products have been certified by such industry leaders as Adaptec,
Alacritech, ATTO Technology, Bell Microproducts, Brocade, Cisco, Emulex,
Fujitsu, Gadzoox, Hitachi Data Systems, Hitachi Engineering Co., Ltd., IBM,
Intel, LSI Logic, McDATA Corporation, Microsoft, NEC, Novell, NS Solutions
Corporation (subsidiary of The Nippon Steel Corporation, Japan), Oracle, QLogic,
Quantum, StorageTek, SUN and Tivoli. FalconStor has agreements with original
equipment manufacturers ("OEMs") including StorageTek, NEC, Runtop, Accton, and
MaXXan, to incorporate FalconStor's IPStor technology with such companies'
products.
 

PRODUCTS AND TECHNOLOGY

IPStor, FalconStor's flagship product, is a comprehensive set of state of the
art network storage infrastructure software solutions that delivers an open,
intelligent SAN/NAS infrastructure across heterogeneous environments by
providing advanced storage services for enterprise applications - optimizing
storage utilization, accelerating backup and recovery, maximizing performance
and ensuring business continuity.

SOFTWARE SOLUTIONS

The base software, running on either a layer of stand-alone or pair of
clustered, Linux/Solaris servers (the IPSTOR APPLIANCES) is responsible for
aggregating and provisioning storage capacity and services to application
servers via all industry standard protocols with speed, security, reliability,
interoperability, and scalability.

IPStor offers Storage Consolidation, Business Continuity/Disaster Recovery, I/O
Performance Optimization and Backup/Recovery Acceleration services designed to
help enterprise data centers minimize total cost of ownership (TCO) and maximize
return on investment (ROI).

IPSTOR'S STORAGE CONSOLIDATION SOLUTIONS consolidate heterogeneous storage
environments, centralize storage management under one simple interface, maximize
storage capacity utilization, consolidate servers, and/or migrate data.

IPSTOR BUSINESS CONTINUITY SOLUTIONS maintain continuous 24x7 availability and
usability of data storage in the event of non-catastrophic unplanned or planned
hardware outages and software errors.

IPSTOR DISASTER RECOVERY SOLUTIONS enable rapid recommencement of business in
the event of catastrophic outages, for example, a flood in the main data center.

IPSTOR'S I/O PERFORMANCE OPTIMIZATION SOLUTIONS were developed specifically to
leverage Solid-State Disk to increase overall storage performance to optimize
return on existing investments in IT infrastructure.

IPSTOR'S BACKUP AND RECOVERY ACCELERATION SOLUTIONS enable the customer to
leverage the network storage infrastructure to accelerate transparently the
performance of third-party backup software, to minimize the risk window, and to
shorten the recovery time without impacting the performance of production
servers.

IPSTOR'S VIRTUAL TAPE LIBRARY OPTION increases the speed and reliability of
off-the-shelf backup and archiving applications by using IPStor-managed disks to
emulate tape drives or libraries. With backup windows shrinking and rapid data
restoration more critical than ever, IPStor's Virtual Tape Library Option allows
users to utilize disk storage to emulate multiple tape libraries concurrently
and to accelerate the backup/restore speed.

STORAGE APPLIANCES

FalconStor has entered into agreements with resellers and with OEMs to develop
"storage appliances" that combine certain aspects of IPStor functionality with
third party hardware to create single purpose turnkey solutions that are easy to
deploy. Currently, FalconStor's resellers and/or OEM partners offer the
following storage appliances:

REALTIME DATA MIGRATION. Uses fibrechannel SAN to transport data across
different vendors' storage subsystems without reconfiguring or shutting down the
host.

VIRTUALTAPE LIBRARY. Utilizes rotating disk to emulate tape drive/library to
turbo-charge backup/restore and to facilitate vaulting over IP.

ISCSI STORAGE. Aggregates and provisions storage capacity and offers Business
Continuity/Disaster Recovery for hosts attached to an iSCSI SAN.

MAINTENANCE, IMPLEMENTATION AND ENGINEERING SERVICES.

FalconStor offers customers a variety of annual maintenance services which
entitle customers to periodic software updates and various levels of technical
support. Although the implementation of IPStor does not generally require the
assistance of FalconStor, the Company offers software implementation services.
FalconStor also offers customers software engineering services.