MELVILLE, N.Y., March 5, 2009—FalconStor Software, Inc. (NASDAQ: FALC), the provider of TOTALLY Open™ data protection solutions, today announced that the latest version of FalconStor® Network Storage Server (NSS) has been named a Silver award winner in the “Backup and Disaster Recovery Software and Services” category of Storage magazine´s 2008 Products of the Year. FalconStor also was honored in 2007 as a Storage magazine finalist for its FalconStor Continuous Data Protector (CDP) Virtual Appliance.

"It's nearly impossible to understate the popularity and importance of server virtualization today, and FalconStor Network Storage Server (NSS) offers a wide range of functionality designed to ease storage management in virtual server environments," said Storage magazine´s panel of judges. "Our judges rank FalconStor NSS highly for its breadth of functionality, as well as for its innovation and performance. It acts as a storage virtualization and replication gateway to storage arrays from any vendor, provisioning virtual disks to VMware ESX."

FalconStor NSS Gateway, a deployment option of FalconStor NSS, is one of the first software-based storage virtualization and replication gateways to be certified for VMware Infrastructure as a storage virtualization device (SVD), and it enables VMware Site Recovery Manager to be used with heterogeneous storage hardware. Its storage virtualization capabilities ease disk provisioning and allocation using one interface and a common toolset. With FalconStor NSS, storage pooling that combines groups of disk resources for a common purpose speeds provisioning and ensures resources are allocated correctly. FalconStor Application Snapshot Director for VMware Infrastructure complements VMware Site Recovery Manager to help ensure that any active application data can be replicated in real time with full transactional integrity to remote DR sites. FalconStor NSS and VMware Infrastructure are well suited to work together to create, maintain, and protect virtual data centers.

FalconStor NSS was chosen based on innovation, performance, ease of integration, functionality, and value. Storage magazine's judges - including editorial staff, users, industry experts, analysts, and consultants - selected winners in five storage product categories. FalconStor delivers storage virtualization, provisioning and heterogeneous storage management that optimizes storage utilization, reduces costs, and increases IT productivity in enterprise organizations.

"Storage virtualization is a hot commodity for IT managers and decision makers who need an efficient shared storage platform for effective backup and recovery," said Alex Jiang, vice president of worldwide marketing for FalconStor. "FalconStor NSS helps our users translate their investment in storage virtualization into significant cost savings. This award is a testament to our practice of giving customers the highest level of data availability and integrity without the complexity of under- or over-utilized resources - and without wasting power and money."

FalconStor NSS offers integrated support for Fibre Channel, iSCSI and InfiniBand; allows users to manage virtualized and non-virtualized storage from a single console; and employs thin provisioning to improve storage resource allocation and capacity management. FalconStor NSS also supports Microsoft Windows Server 2008 Failover Clustering and Hyper-V virtual server environments.

About TechTarget's Storage Media
TechTarget's SearchStorage.com is the number-one online destination for IT professionals charged with purchasing, implementing, and managing storage systems at the core of large- and medium-sized businesses. More than 600,000 storage-focused IT executives, managers, and staff rely on SearchStorage.com for the information they need to do their jobs. SearchStorage.com content includes original editorial features, news, expert storage advice, Webcasts, and white papers. TechTarget's Storage Magazine is the only monthly resource that provides information technology (IT) executives, managers, and staff with in-depth analysis and forward-looking guidance on managing, storing, networking, and safeguarding the data at the core of large organizations. More information can be found at www.SearchStorage.com.

About FalconStor Software
FalconStor Software, Inc. (NASDAQ: FALC) is the market leader in disk-based data protection. FalconStor delivers proven, comprehensive data protection solutions that facilitate the continuous availability of business-critical data with speed, integrity, and simplicity. The Company's TOTALLY Open™ technology solutions, built upon the award-winning IPStor^® platform, include the industry leading Virtual Tape Library (VTL) with deduplication, Continuous Data Protector (CDP), and Network Storage Server (NSS), and are enabled with WAN-optimized replication for disaster recovery and remote office protection. FalconStor products are available from major OEMs and solution providers including Acer, COPAN Systems, Data Direct Networks, DSI, EMC, H3C, IBM, Pillar Data Systems and Sun and are deployed by thousands of customers worldwide, from small businesses to Fortune 1000 enterprises.

###