Chinese Academy of Sciences' Computer Network Information Center and FalconStor Software Announce Joint Lab Cooperation Agreement

Business Wire, Jan 30, 2007

Partnership Establishes a Joint Research and Development Lab for Data Protection and Remote Disaster Recovery Research in China and Will Ultimately Provide FalconStor's Data Protection Services and Recovery Management Throughout China

MELVILLE, N.Y. & BEIJING -- The Computer Network Information Center, Chinese Academy of Sciences (CNIC, CAS) and FalconStor Software, Inc. (Nasdaq: FALC), the leading developer of data protection solutions, today announced plans to provide FalconStor's PrimeVault[R]_ Data Protection services throughout China. As the first step toward this goal, the two parties are entering into a joint research and development partnership to establish a CNIC/FalconStor laboratory to develop data protection and remote disaster recovery solutions for the Chinese government and enterprises.

"We've chosen FalconStor as our partner because of its track record as an innovator and its proven products for data protection and recovery," said Dr. Li Jun, Director of CNIC, CAS. "Our goal is to isolate enterprise network best practices, and apply them to a general data protection and high availability model for remote data backup and disaster recovery via the Internet."

CNIC, CAS intends to leverage FalconStor's PrimeVault Data Protection services to backup data and for use as a storage platform throughout China as well as outside its borders. This will allow Chinese government agencies and enterprises to quickly launch remote data backup and remote disaster recovery networks, providing more efficient data protection and access to important data even in the event of a disaster.

The partnership includes the creation of a Research and Development (R&D) laboratory to host the FalconStor Primevault Platform for research on the feasibility of Internet communications-based protection of enterprise data, remote data backup and remote disaster recovery. The laboratory will work with FalconStor to develop an Internet-based high availability data backup and storage platform for China. The platform would be made available to government departments and enterprises in China and provide an Internet backbone for backup, recovery and storage between China and other countries.

"FalconStor is honored to be selected by the CNIC, CAS to cooperate on their Internet storage network initiative, "said ReiJane Huai Chairman and CEO, FalconStor. "We see this as a great opportunity to further enhance PrimeVault's functionality with real-world testing and development on a global scale, while strengthening China's Internet infrastructure and furthering its communication and collaboration with the rest of the world."

FalconStor PrimeVault provides a complete range of cost-effective and reliable data protection, archiving and hosting services for large, medium and small businesses. Combining unrivaled technical expertise, 24/7/365 monitoring and a state-of-the-art data center, PrimeVault Disaster Recovery and Hosting Services provide flexible and scalable solutions that support the recovery of critical systems and the continuity of business operations in the event of a disaster.

About Computer Network Information Center , Chinese Academy of Science

The Computer Network Information Center, Chinese Academy of Sciences (CNIC, CAS) is a subsidiary research institute of the Chinese Academy of Sciences (CAS), engaged mainly in the construction, operation and supporting service of informatization of CAS, R&D of computer network technology, database technology as well as scientific engineering computation.

About FalconStor Software, Inc.

FalconStor Software, Inc. (Nasdaq: FALC) is the premier developer of proven data protection solutions that optimize data center efficiency and business continuity for all IT infrastructures. The company's award-winning storage virtualization, continuous data protection (CDP), disaster recovery, and virtual tape library (VTL) solutions integrate seamlessly to ensure rapid data recovery and simplified storage management. Its products 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, N.Y., with offices throughout Europe and the Asia Pacific regions including Paris, Tokyo and Taiwan. For more information, visit www.falconstor.com or call 1-866-NOW-FALC (866-669-3252).

FalconStor is a registered trademark and PrimeVault is a service mark of FalconStor Software, Inc. All other company and product names contained herein may be trademarks of the respective holders.