FalconStor Software, Inc. today announced a comprehensive upgrade of its suite of data protection solutions. Version 7 (V7) of FalconStor’s product family offers the fundamental solutions for implementing next-generation backup and disaster recovery (DR) today – making it simple and cost effective to maintain uptime of critical IT services in the face of exponential data growth, widespread use of virtual servers and business demand for high availability.

Version 7 of FalconStor’s data protection suite synchronizes the product line and offers customers a complete set of solutions that provides everything needed to optimize legacy backup systems, migrate to disk-based backup and DR and guarantee fast recovery of essential systems and applications, while also laying the foundation for service-oriented data protection.

“Legacy backup and recovery methods are severely challenged as the pressing demand for IT service availability is compounded by shrinking budgets and complexities caused by remote offices and mobile users,” said Fadi Albatal, vice president of worldwide marketing for FalconStor. “With V7, FalconStor’s data protection solutions have been optimized to deliver a holistic approach to backup and recovery that helps data centers of all sizes overcome obstacles to continuous service and data availability.”

FalconStor data protection solutions enable customers to:
- seamlessly migrate to scalable, high-performance, disk-based backup with FalconStor’s deduplication technology, eliminating inefficient backup and recovery from tape.
- optimize backup of both file and block data across a highly available, scalable global deduplication repository.
Protect more data in less time with fast restoration, consolidating recovery point objectives (RPO) to mere seconds.
- combine highly available virtualized heterogeneous storage environments with improved I/O performance, robust failover, data migration and automated DR to ensure data availability and business continuity.
- extend the value of VMware vSphere by supporting VMware vStorage APIs for Array Integration (VAAI) across heterogeneous storage platforms while integrating physical server failover and failback with VMware vCenter Site Recovery Manager support.

Key V7 enhancements

FalconStor® Virtual Tape Library (VTL): very high-performance deduplication with pre-parsing of data; real-time dashboards for full operational visibility; scales to more than one petabyte of storage; global deduplication repository.

FalconStor® File-interface Deduplication System ( FDS): high availability; shared global deduplication repository with FalconStor VTL.

FalconStor® Continuous Data Protector (CDP): 1,000 snapshots per volume for highly granular points of recovery and longer retention time; multi-threaded architecture accelerates performance of replication, compression and encryption.

FalconStor® Network Storage Server (NSS): supports VMware vSphere and VMware VAAI and extends VMware functionality in heterogeneous SAN environments that may not offer native VAAI support; accommodates greater volume scalability, larger drive sizes and virtual machine density.

Version 7 of FalconStor’s data protection product suite is available immediately.

About FalconStor Software
FalconStor Software, Inc. (NASDAQ: FALC) is the market leader in disk-based data protection. The company’s mission is to transform traditional backup and disaster recovery into next-generation service-oriented data protection. Built upon an award-winning platform, FalconStor solutions deliver disk-based backup, continuous data protection, WAN-optimized replication and disaster recovery automation. FalconStor solutions are available through a worldwide network of partners, including solution providers, top-tier strategic partners and major OEMs. Thousands of customers worldwide, from small businesses to Fortune 100 enterprises, entrust their data to FalconStor solutions. FalconStor maintains headquarters in Melville, N.Y., and offices throughout Europe and the Asia Pacific region. For more information, visit www.falconstor.com or call 1-866-NOW-FALC (866-669-3252).

“Diamond Point is very excited to become a FalconStor partner” said John Vaines, managing director at DPI. “As the main distributor for Violin Memory in Europe, I can see great advantages marrying the two technologies together. The FalconStor NSS gateway gives us a certified connection to a virtualised environment and a level of sophistication that power users of Violin high-performance solid state storage arrays have come to expect.”

Thomas Barrett, regional director for northern Europe, FalconStor, said: “Using FalconStor NSS SAN Accelerator, a solid-state layer of 1 percent of a SAN´s total storage capacity will increase overall SAN performance by more than 100 percent. With solid state disk prices falling, we think this is a solution that more and more customers will look at in order to squeeze more value and performance, cost-effectively, from their SANs. Working with DPI is an entirely logical step for both parties, and we look forward to a productive relationship.”

Diamond Point International is a distributor and manufacturer of computer equipment and GPS devices, headquartered in Rochester, Kent, UK, and servicing a mix of OEMs and system integrators.

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Notes to editors
In March 2010, FalconStor and Violin announced FalconStor NSS SAN Accelerator, the first flash-memory-based storage system that simultaneously accelerates reads and writes for mission-critical applications as well as general SAN performance.

FalconStor NSS SAN Accelerator leverages solid-state storage as an on-demand dynamic storage tier to accelerate both writes and reads with two key features: FalconStor’s SafeCache™ and HotZone® technology respectively. Either solid-state disks or solid-state memory resources can be dedicated to specific workloads or can be global to the whole storage environment, allowing efficient allocation of the solid-state storage cache. The intelligent algorithms of SafeCache and HotZone features accelerate and protect applications where performance enhancements are needed the most.

London-based luxury retailer Radley + Co has deployed FalconStor® Continuous Data Protector (CDP) to provide both disaster recovery (DR) and backup services. As a company with an international supply chain and retail outlets, Radley + Co produces a lot of data, in many different formats and across multiple sites. The company’s primary aim was to replicate data from its data center in London to a remote warehouse location that also serves as its DR site.

With Radley + Co’s London infrastructure almost entirely virtualized on VMware ESX Server, the objective was achieved by deploying a FalconStor® DiskSafe™ agent on each virtualized server. The DiskSafe agent synchronizes data back to a FalconStor CDP appliance which, in turn, replicates to the DR site over a leased line. Snapshots are taken every three hours, enabling roll-back, in three-hour intervals, to up to a week before any disaster occurred or was discovered.

However, the company realised that the same FalconStor solution could also meet its backup requirements. “At one time, we had a sizeable window available in which to do our backups,” says Francis Rodrigues, IT support manager, Radley + Co. “However, once the business expanded into the USA, systems were put to use for far longer periods of time, reducing the backup window to the point where it was almost non-existent. But we realised we could use the snapshots generated by FalconStor CDP to solve the backup problem by employing FalconStor® HyperTrac™ Backup Accelerator technology to archive data onto tape.

“FalconStor CDP with HyperTrac Backup Accelerator capability is a completely non-disruptive solution and the business benefit is clear: we have protected the business against failure caused by data loss, however that data loss might occur,” he added.

Previously, the company’s DR provisioning consisted primarily of backing up to tape, with a strategy of restoring from tape and restarting operations as well as possible. Scenario testing – the results of which inspired the FalconStor project – showed that recovery was time-consuming, required the involvement of expensive consultants, and would involve a loss of operations and data.

Radley + Co is a market leader in handbag and accessory design, with operations in several countries.

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About FalconStor CDP
FalconStor CDP combines local and remote data protection into a cost-effective, unified, disk-based backup and DR solution. It enables data to be recovered back to the most recent transaction, shrinking recovery point objectives (RPO) to mere seconds. Using sophisticated technologies including application integration, physical-to-virtual (P2V) recovery, and WAN-optimized replication, FalconStor CDP enables businesses to come back online quickly so entire systems can be restored in minutes. Data is protected in its native format and is instantly accessible. Recovery time objectives (RTO) can change from hours to minutes, minimizing downtime and consequent economic impact.

About FalconStor HyperTrac Backup Accelerator
HyperTrac Backup Accelerator technology works in conjunction with FalconStor CDP to increase tape backup speed, eliminate backup windows, and offload processing from application servers. Data can be backed up at any time without disruption, even during peak production hours, making it ideal for organizations requiring tape backup for archiving or regulatory compliance.

FalconStor today launched PartnerChoice, a three-tiered channel partner program designed to provide optimal channel marketing and sales support based on a partner’s business model, level of engagement and commitment. As an integral part of its new partner program, FalconStor has launched the PartnerPlace Web portal, which allows partners to track opportunities, manage account information and access an extensive knowledgebase of resources.

“The PartnerChoice program is built on three key principles: invest resources to build long-term relationships, increase partner profitability and maintain the highest level of customer satisfaction,” said Brendan Kinkade, vice president of channel management and global alliances for FalconStor Software. “FalconStor has made a firm commitment to nurturing partnerships that will create greater opportunity, synergy and collective strength – and to continue to improve the quality of our processes and products that are the basis of these partnerships. The proof of this commitment is in the launch of PartnerChoice, a profit-rich program created exclusively to help channel partners grow their data protection business with FalconStor.”

With three distinct tiers of engagement, FalconStor’s PartnerChoice program is designed to drive revenue and growth objectives for channel partners through financial incentives, sales and marketing tools, and training and support. All partners can participate in margin building, deal registration and financial incentives with no minimum requirements. FalconStor helps partners earn greater rewards according to their commitment and business goals through market development funds and revenue goal rebates.

Visit FalconStor’s website for more information about the PartnerChoice program.

Total revenues for the fourth quarter of 2010 were $26.5 million, an increase of 18% compared with $22.4 million in the same period a year ago. GAAP income from operations for the fourth quarter of 2010 was $0.8 million, compared with a loss from operations of $3.3 million for the same period a year ago. GAAP net loss for the quarter was $0.1 million with breakeven earnings per share compared with a net loss of $1.5 million or $0.03 per share for the same period a year ago.

Non-GAAP income from operations was $2.4 million in the fourth quarter of 2010, compared with a loss from operations of $1.2 million for the same period a year ago. Non-GAAP net income was $2.2 million or $0.05 per diluted share in the fourth quarter of 2010, compared with a net loss of $0.8 million or $0.02 per share, in the fourth quarter of 2009. Non-GAAP results exclude the effects of stock-based compensation net of the related income taxes.

For the year ended December 31, 2010, revenues declined 7% to $82.8 million, compared with $89.5 million for the same period a year ago. GAAP loss from operations for 2010 was $17.6 million compared with a loss of $6.3 million in 2009. GAAP net loss was $35.4 million, or $0.78 per share for 2010 compared with a net loss of $3.1 million, or $0.07 per share in 2009. In 2010, the Company concluded that its domestic deferred tax assets could not be realized on a more-likely-than-not basis, therefore a valuation allowance of $16.3 million was required to be recorded on these previously recognized deferred tax assets. This valuation allowance had no cash impact and was recorded within the tax provision during the third quarter of 2010, and is included within the full year 2010 tax provision.

Non-GAAP loss from operations in 2010 was $8.9 million compared with income from operations of $2.5 million in 2009. Non-GAAP results exclude the effects of stock-based compensation expense net of the related income taxes.

The Company closed the year with $37.3 million in cash, cash equivalents, and marketable securities. Cash flow from operations for the fourth quarter of 2010 was $4.2 million and for the full year 2010 cash flow from operations was ($1.7) million. Deferred revenue at December 31, 2010 was $23.5 million, an increase of 6% compared with the same period a year ago.

“We achieved a solid fourth quarter, which was highlighted by record quarterly revenues and significant enterprise wins with our partner Hitachi Data Systems. We are pleased to see the results of our increased focus on partners and channel operations,” said Jim McNiel, president and CEO of FalconStor Software. “We are excited about our new sales team in North America and about delivering on our vision of service-oriented data protection in 2011. FalconStor is on course for delivering the next generation of data protection solutions.”

FalconStor Software, Inc. today announced RecoverTrac™, a disaster recovery (DR) automation tool included as a standard feature of FalconStor® Continuous Data Protector (CDP) – the platform for realizing FalconStor’s vision of service-oriented data protection.

The RecoverTrac tool is the first DR automation solution to bring service-oriented recovery to both physical and virtual server infrastructures. The RecoverTrac feature automates complex, time-consuming and error-prone failover and failback operations of systems, applications, services and entire datacenters, making FalconStor CDP the most comprehensive disk-based data protection system for backup and DR available.

Most DR solutions focus on replicating data to a remote DR site, leaving IT staff with the complex task of reconstituting servers, applications, network configurations and replicated data into a functional set of data center services for business continuity. The RecoverTrac tool not only replicates data, but stages the recovery of complete services – thus facilitating service-oriented data protection (SODP) – by fully automating the resumption of servers, storage, networks and applications in a pre-determined, coordinated process. The RecoverTrac solution works with all operating systems, virtual machines and networks; and it supports physical-to-physical, physical-to-virtual and virtual-to-virtual recovery operations.

In addition to its primary recovery mode, the RecoverTrac technology offers a test mode and cloning capability. Test mode allows every aspect of the recovery process to be executed without impact on production systems. Cloning capability allows a copy of application data to be used for other business purposes.

RecoverTrac is available immediately as a standard feature of FalconStor CDP and FalconStor® Network Storage Server (NSS) at no additional cost.

In his new capacity, McNiel is charged with bringing the company into focus on a single, integrated strategy for defining and delivering the next-generation of data protection solutions. In his previous roles as FalconStor’s chief strategy officer and most recently as interim president and interim CEO, McNiel designed the corporate strategy that now drives product development, worldwide marketing initiatives and strategic alliances that will enhance FalconStor’s market leadership and brand recognition.

“This is an auspicious time for FalconStor, with its depth of technical expertise and strong industry partnerships, to lead the way towards addressing IT’s most pressing business continuity challenges,” said McNiel. “Traditional methods of backup and recovery are broken, and we have the opportunity to redefine data protection to match the way IT delivers mission-critical services to its users. We are designing the industry’s first service-oriented data protection solution for private data centers and the cloud, and it is upon this foundation that we intend to build FalconStor’s future.”

Previously an executive vice president of corporate development at Cheyenne Software, McNiel joined FalconStor in 2009 as chief strategy officer. In addition to his role in building Cheyenne into a billion dollar industry leader, McNiel, as a general partner at Pequot Ventures (now FirstMark Capital), led successful investments in Netegrity, NetGear and OutlookSoft. McNiel brings to FalconStor his broad experience in directing venture capital investments, advising promising startups, designing products that address emerging markets, and orchestrating IPOs in the high-tech industry.

“We invited Jim to join FalconStor’s executive team for his demonstrated ability to recognize market opportunities, articulate a vision and lead teams of highly qualified individuals in the pursuit of building successful businesses,” said Eli Oxenhorn, non-executive chairman of FalconStor’s board of directors. “The entire board is behind Jim’s appointment to president and CEO, and we expect to see FalconStor achieve its full potential under his leadership.”

As part of McNiel’s companywide initiative for excellence in every functional area, McNiel has recruited former Symantec sales executive John Turner to join FalconStor as vice president of North American sales.

In addition, McNiel has promoted Walter Curti, who oversaw research and development for the last two years, to the position of chief technology officer and has named Bob Daly, formerly vice president of managed services, as vice president of R&D. Curti has more than 25 years of engineering and management experience in the software industry and before FalconStor held senior executive roles at Cheyenne Software and CA Technologies. Bob Daly is a 30-year veteran of the software industry who joined FalconStor in early 2010 and was vice president of engineering at Cheyenne Software before its acquisition by CA Technologies.

FalconStor Software, Inc. today announced that companies that are deploying virtualization infrastructures based on VMware are implementing FalconStor’s data protection solutions for high availability and disaster recovery (DR) of business-critical applications. With FalconStor solutions, new customers like Rug Doctor, 3t Systems, Alea North America Insurance Company, Illinois Math & Science Academy and Domino North America can enable fully virtualized server and storage infrastructures with high availability while saving money on VMware deployments.

Server virtualization has become the latest technology that allows IT to efficiently use resources; however, it has created challenges and opportunities for data backup and disaster recovery. FalconStor® Network Storage Server (NSS) and FalconStor® Continuous Data Protector (CDP) help reduce VMware management costs, enhance virtual machine mobility and protect data to ensure availability and rapid recovery. Additionally, the following benefits can be realized:
- achieving “five-nines” availability of VMware infrastructure deployments with continuous data protection
- enabling instant recovery of VMware servers and virtual machines
- slashing DR costs with DR automation and physical-to-virtual replication and failover

Through the use of continuous data protection and storage virtualization, companies are able to focus on their business objectives without worrying about downtime. The FalconStor NSS solution helps reduce VMware management and supporting infrastructure costs and enhances virtual machine mobility. Additionally, FalconStor CDP software is essential for companies seeking continuous availability of mission-critical applications and quick file and service recovery.

“Server virtualization is creating an opportunity for companies to improve infrastructure efficiency, enable data mobility and enhance overall business processes. Yet in order to fully capitalize on virtualization, companies need to protect their data to ensure continuous availability and rapid local and remote recovery,” said Fadi Albatal, vice president of marketing for FalconStor Software. “FalconStor’s solutions address the data protection challenges introduced by server infrastructure consolidation by enabling full data protection and mobility of virtual machines and by unifying backup and DR processes.”

As a certified partner of VMware, FalconStor has ensured that its data protectioncapabilities are fully compatible with VMware infrastructure.

Under the terms of the agreement, effective October 1, 2010, FalconStor® Network Storage Server (NSS) software will be used to create new disaster recovery (DR) and business continuity offerings for HP Business Continuity & Recovery Services (BCRS) customers. This agreement enables HP Enterprise Services to add new heterogeneous replication services to the comprehensive offerings of HP BCRS as well as the full data protection capabilities of the FalconStor NSS solution.

“The FalconStor NSS solution’s heterogeneous replication feature provides HP’s Business Continuity & Recovery Services a critical capability that allows HP to replicate between any brand of storage to and from the customer site and the BCRS recovery site,” said Bernie Wu, vice president of business development for FalconStor. “We look forward to working with HP and providing leading products in the growing market for cloud-based replication and DR solutions.”

FalconStor Software today announced FalconStor® Network Storage Server (NSS) SAN Accelerator for VMware View™, an SSD-enhanced storage solution that increases the performance of VMware virtual desktop environments while delivering integrated, multi-tier data protection. FalconStor NSS SAN Accelerator for VMware View performs backup and recovery for the entire virtual desktop environment and for each virtual desktop – and, for the first time, enables integrated self-service file recovery for individual virtual desktop users.

VMware View delivers tremendous efficiencies in the deployment and management of enterprise users’ desktop and laptop computers. Virtual desktop operation and management can be enhanced by storage capabilities to maximize performance, availability and efficiency. FalconStor NSS SAN Accelerator for VMware View dramatically enhances the efficiency of virtual desktop management throughout the virtual desktop lifecycle – accelerating virtual desktop booting, login, operation, logoff, patch/update and security management through 10x storage performance improvement.

Virtual desktop deployments also require advanced data protection and storage efficiency features for storing desktop images, user data and settings that need to be backed up and recoverable in the event of a system failure, user error or data center disaster. The FalconStor NSS SAN Accelerator for VMware View employs snapshots, thin clones, replication and file-level protection to enable a three-tier data protection service:

- entire VMware View environment – comprehensive, enterprise-class continuous data protection that allows IT managers to recover locally or from a DR site in the event of system-wide failure

- all VMware View user data repositories – complete data protection for user data located within the VMware View environment and redirected folders on a separate NAS appliance

- self-service file-level recovery – users can recover their own individual files as needed, saving storage administrators significant time and expense.

“Virtualization in general and virtualization of desktops in particular have amplified I/O unpredictably as read/write I/O storms occur frequently without warning; the only solution to date has been to add more disk drives,” said David Vellante, chief research advocate, Wikibon. “Wikibon has been emphasizing the requirement for different architectures to exploit the potential of flash to improve I/O performance. We are very pleased with the innovation that FalconStor has shown with its flash-on- storage-controller implementation, which is much more efficient for VDI than SSDs. The FalconStor NSS SAN Accelerator neatly exploits the VMware I/O separation improvements to offer a solution that combines low-cost SATA with 2 to 3 percent high-performance flash as a cache that can adapt in real-time. Wikibon believes this is a best-of-breed solution for high-performance workloads.”

“The rapidly adopted paradigm shift of virtual servers and desktops ushered in by VMware’s innovation has created the need for storage environments with integrated data protection designed for the new virtual data center,” said Jim McNiel, chief strategy officer for FalconStor. “Virtual environments not only demand flexible, scalable virtual storage environments, but also require backup and DR systems that work with the unique characteristics of virtual machines. We designed the FalconStor NSS SAN Accelerator for VMware View™ to deliver the kind of storage environment that virtual desktops require – improving performance and data protection in one elegant solution.”

Pricing and availability
The FalconStor NSS SAN Accelerator for VMware View is available immediately through FalconStor’s network of channel partners. The average cost for an implementation of up to 5,000 users is $35 per virtual desktop.

About FalconStor Software
FalconStor Software, Inc. (NASDAQ: FALC) is the market leader in disk-based data protection. FalconStor delivers proven, comprehensive data protection solutions that facilitate the continuous availability of business-critical data with speed, integrity and simplicity. The Company’s TOTALLY Open™ technology solutions, built upon the award-winning IPStor® platform, include the industry leading Virtual Tape Library (VTL) with deduplication, Continuous Data Protector (CDP), File-interface Deduplication System (FDS), and Network Storage Server (NSS), each enabled with WAN-optimized replication for disaster recovery and remote office protection, and the HyperFS™ file system. FalconStor products are available as OEM or branded solutions from industry leaders, including Acer, Data Direct Networks, Dynamic Solutions International, EMC, Fujitsu, Hitachi Data Systems, Huawei, Pillar Data Systems, SGI, SeaChange and Spectra Logic 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 region. FalconStor is an active member of the Storage Networking Industry Association (SNIA). For more information, visit http://www.falconstor.com.