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Basingstoke, UK – 9th October 2007 - FalconStor Software, Inc. (NASDAQ: FALC), the market leader in disk-based data protection solutions has opened its first VirtualTape Library Competence Centre in Toulouse, France. The VTL Competence Centre will serve FalconStor’s partners and customers worldwide, and will provide one of the most advanced environments in the world for the development of storage and data protection skills and best practices.

The Competence Centre will provide a laboratory environment for building enterprise-class VirtualTape Library (VTL) and Single Instance Repository (SIR) solutions, as well as proof of concept (POC) configurations to customer specifications. It will also be used to write specifications for new VTL features, for testing and stressing those features, and will also develop best operating practices and white papers.

ReiJane Huai, FalconStor’s chief executive officer, said: “FalconStor delivers the best VTL solutions in the world and has unrivalled expertise in this whole area of storage and data protection. Our new facility provides us with the perfect environment to drive our development forwards, while enabling our partners and customers to extract every last ounce of value from their investment in our solutions.”

The centre comprises a fully functional test environment for experimentation, development, deployment and demonstration and is equipped with all the hardware and accessories needed to replicate typical and atypical VTL configurations.

Garry Veale, Worldwide Chief Sales Officer, COPAN Systems - a strategic FalconStor partner said: “We are very pleased with this announcement as it demonstrates FalconStor’s continued commitment to its partners and customers to provide state of the art solutions together with related services such as testing capabilities and training. We are convinced this will re-enforce FalconStor's ability to strategically partner with companies such as COPAN Systems to take enterprise-class VTL solutions to market.”

Guillaume Imberti, president and general manager, EMEA, for FalconStor, said: “The location of this centre in the heart of Europe is a tremendous asset to FalconStor’s EMEA operation. We have many large customers with complex environments and stringent requirements, and the centre will enable us to develop the optimal solution for them before even approaching their data centre.”

For further information, contact FalconStor’s EMEA headquarters in Paris: telephone +33 1 39 23 95 50

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About FalconStor Software, Inc.

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).

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FalconStor and FalconStor Software are registered trademarks 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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