Companies Leverage IPStor to Aggregate, Virtualize and Provision NetWare Volumes Over IP/iSCSI or FC-connected SANs to Reduce Total Cost Of Ownership (TCO) and Optimize Business Continuity

Contact:
Herman Chin, FalconStor
631.962.1163
herman.chin@falconstor.com

MELVILLE, N.Y., March 18, 2002 — FalconStor Software, Inc. (Nasdaq: FALC), a leading storage networking infrastructure software company, today announced a strategic partnership with Novell, Inc. (Nasdaq: NOVL), the leading provider of Net business solutions, to deliver advanced network storage infrastructure to Novell NetWare platforms over IP/iSCSI and Fibre Channel SANs.

FalconStor and Novell have teamed up to jointly develop a storage vendor and interface agnostic SAN solution for NetWare platforms, enabling the provisioning of secure, highly-available network storage to NetWare over IP, iSCSI or Fibre Channel-based storage networks. IPStor's suite of SAN-based storage management services, including mirroring, snapshot, TimeMark and replication services, are being fully leveraged to ensure optimal data availability and rapid disaster recovery.

"IPStor technology reduces Total Cost of Ownership through the aggregating and provisioning of the storage hardware in place, maximizing a company's investment in existing technologies through storage consolidation -even allowing NetWare users in a direct attached storage model to painlessly migrate into a SAN environment," said Bernie Wu, FalconStor vice president of business development. "Our mutual clients require complete data protection and this alliance with Novell delivers an industry-leading storage solution for NetWare customers."

"Cross-platform security, reliability, centralized administration and rapid recovery tools make FalconStor's IPStor and NetWare a powerful combined solution for the demanding data storage requirements of today's Net-centric enterprises," said Jeff Hawkins, Novell vice president, Storage Services. "FalconStor's IPStor SAN software and architecture highly complement our Novell Cluster Services, Novell Storage Services and Novell NetDevice products, and will also help existing NetWare customers consolidate their storage and provide business continuity."

IPStor's data management and storage services options include High Availability, Synchronous Mirroring, Remote Replication, Zero-Impact Backup Enabler, and TimeMark/TimeView for scheduled disk-based change-journaling and instant recovery. NetWare applications can immediately take advantage of IPStor's network storage services to help protect data against hardware failures, software failures, and virus attacks.

About IPStor
IPStor, a storage networking software infrastructure, enables corporate IT to contain storage management costs and increase storage efficiency by aggregating, virtualizing and provisioning storage services over the network with high performance, security, scalability and availability. The IPStor server runs on off-the-shelf hardware under Linux or Solaris. It supports industry standard protocols such as SCSI, IP, iSCSI, Fibre Channel and SNMP to facilitate rapid deployment and seamless integration with the existing storage equipment and 3rd party management software throughout the enterprise. As the result of its hardware-agnostic architecture, vendor-independent storage services and industrial performance, IPStor has been embraced by major system, storage and appliance vendors and system integrators throughout the world.

About FalconStor
FalconStor Software, Inc. (Nasdaq: FALC), offers network storage infrastructure software that dramatically reduces storage operating costs by aggregating and provisioning storage capacity and management services over Fibre Channel and IP-based storage networks. With unprecedented reliability, performance, manageability, and availability, FalconStor's flagship product, IPStor™, enables leading IT organizations and Service Providers to deploy a highly available network storage infrastructure to ensure business continuity.

Founded in 2000, FalconStor is headquartered in Melville, NY. International offices include Paris, Tokyo and Taichung, Taiwan. FalconStor is a voting member of the Storage Networking Industry Association (SNIA) and Fibre Channel Industry Association (FCIA). For more information, visit www.falconstor.com or call 1-631-777-5188.

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: the early stage of FalconStor's business; delays in product development; market acceptance of FalconStor's products and services; technological change in the storage and networking industries; competition in the storage networking software market; the ability to achieve profitability; 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 and IPStor are trademarks of FalconStor Software, Inc. All other company and product names contained herein are trademarks of the respective holders.