FalconStor's VirtualTape Library Solution Enables COPAN Systems' Revolution 200T MAID Platform to Deliver Disk-Based Backup Performance and Data Protection at the Price of Tape

Sydney, Australia – December 15, 2004-FalconStor Software, Inc. (Nasdaq: FALC), a leading developer of network storage infrastructure software solutions, today announced a strategic OEM partnership with COPAN Systems, the leading provider of MAID (Massive Array of Idle Disks), a breakthrough disk-based alternative to tape for long-term data storage. The agreement enables COPAN to integrate a version of FalconStor's VirtualTape Library (VTL) software, fully customised and optimised for its first product, the Revolution 200T, which began shipping in March 2004 and became generally available in August 2004. The Revolution 200T is installed in over a dozen Fortune 500 and government institutions, spanning financial, media, service provider and government research industries.

As the VTL engine inside the Revolution 200T, FalconStor's unique VTL solution consolidates the management of backup resources, while enhancing the reliability of backup operations and accelerating the speed of recovery, without requiring businesses to change their existing backup software and policy. FalconStor's VTL leverages industry standard high speed disk to provision virtual tape drives and libraries to backup servers attached to an iSCSI/IP or Fibre Channel storage area network (SAN), in order to maximise performance and return on investment.

"Companies in the financial services, government, media and service provider industries are rapidly adopting COPAN Systems' MAID-based Revolution 200T, as the preferred platform for their backup/recovery and active archive applications," said COPAN Systems President and Chief Executive Officer Dave Davenport. "We're grateful to FalconStor for pioneering the VTL technology that has enabled us to quickly enter the market and fulfil our vision of delivering a MAID-based solution that will change the way long term digital data is stored, protected and accessed."

Revolution 200T is the first storage solution to be based on the MAID architecture, providing disk-based performance, availability and data protection at the price and scale of tape. The Revolution 200T is purpose-built for write once, read occasionally applications, delivering 2-3 times the density of tape, and 10 times faster data access than tape. To read the complete release, including the Safe Harbor agreement, visit www.falconstor.com/copanOEM.asp.

Media Contacts:

Rob Stirling Markom Marketing +61 2 9977 8922 robstirling@markom.com.au

Joel Norton FalconStor Software +61 2 8912 2153 joel.norton@falconstor.com