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First of a complete line of data protection solutions with cost-performance efficiency now integrated with Acer Altos R7-series servers

Basingstoke, UK – 23rd October 2007 – FalconStor Software, Inc. (NASDAQ: FALC), the market leader in disk-based data protection solutions, and Acer Inc., the fourth largest branded PC vendor globally, announced today that Acer will introduce Acer Storage Repository (ASR) powered by FalconStor® VirtualTape Library (VTL) with data de-duplication into the mid-market.

“We are going to start presenting the ASR at the Altos Cafe' kicking off on the 4th of November in 10 cities in ANZ,” said Bert Noah, Director of Enterprise Systems Group, Acer Oceanic Region. “Our target market is small to medium enterprises, which includes universities, private schools, local councils, small government departments, and mid-tier corporations. These customers have a high level of scrutiny by law, for instance, schools & universities have to maintain archived records for 30 years and councils have to maintain records Near Line even longer.”

“The FalconStor VirtualTape Library is the number one VTL in the world and is OEM’d or resold by most major storage vendors. After extensive evaluation and tests by our team, FalconStor had the best offering across all 4 key functional blocks - optimising backup, tape management, data de-duplication, and global de-dupe replication - for data protection. Acer Altos R7-series servers powered by FalconStor VTL with data de-duplication provide these customers a turnkey backup and recovery appliance that is capable of giving them 60-200 days backup retention on disk with the ability to grow that as their primary storage grows. It also offers the ability to have a DR site with one-to-one or many-to-one replication,” Bert Noah continued. “FalconStor´s proven data protection technology supports both 4Gb FC and 1GbE iSCSI high speed interaction between the backup server and VTL helping backup administrators to overcome the challenges of shrinking backup windows and explosive data growth.”

“We are exceptionally pleased to be the data protection solutions of choice for Acer as it ventures deeper into the SMB and ROBO data storage and data protection market,” said Dr. Eric Chen, General Manager of FalconStor Asia Pacific. “With deep server and storage solutions experience, a nationwide support and service system, and a robust marketing program composed of both direct sales and channel partners, Acer is well positioned to succeed with its new product line.”

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About Acer

Acer ranks as the world's No. 4 branded PC vendor, designing easy, dependable IT solutions that empower people to reach their goals and enhance their lives. Since spinning-off its manufacturing operation, Acer has focused on globally marketing its brand-name products: mobile and desktop PCs, servers and storage, LCD monitors and high-definition TVs, projectors, and handheld/navigational devices. Acer's unique Channel Business Model is instrumental to the company's continued success. The model encourages partners and suppliers to collaborate in a winning formula of supply-chain management, allowing Acer to provide customers with fresh technologies, competitive pricing, and quality service. Established in 1976, Acer Inc. employs 5,300 people supporting dealers and distributors in more than 100 countries. Revenues in 2006 reached US$11.32 billion.

About FalconStor

FalconStor Software, Inc. (NASDAQ: FALC) is the market leader in disk-based data protection. We deliver proven, comprehensive data protection solutions that facilitate the continuous availability of business-critical data with speed, integrity, and simplicity. Our technology-independent solutions, built upon the award-winning IPStor® virtualisation platform, include the industry leading VirtualTape Library (VTL) with Single Instance Repository (SIR) for de-duplication, Continuous Data Protection (CDP), Storage Virtualisation, and Replication for disaster recovery and remote office protection. Our products are available from major OEMs and solution providers including EMC, SUN, Brocade, H3C, and COPAN and are deployed by thousands of customers worldwide, from small businesses to Fortune 1000 enterprises.

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 of FalconStor Software, Inc., in the United States and other countries. All other trademarks are the properties of their respective owners.

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