San Jose, Calif. — January 20, 2003 — Alacritech®, Inc., the innovator of network accelerator solutions that enable fast and efficient servers and storage systems, today announced a strategic relationship with FalconStor Software, Inc. (Nasdaq: FALC), a leading provider of network storage infrastructure software. FalconStor has certified Alacritech's new TCP/IP accelerated drivers for Linux as fully interoperable with its leading IPStor® software, and together, the companies will provide network-attached storage (NAS) customers with Alacritech's Gigabit Ethernet Accelerator and IPStor for a high-performance storage management architecture with high availability and reliability in business-critical environments.

"FalconStor and Alacritech share the vision of providing continuous uptime and reliability for customer networks," said ReiJane Huai, CEO, FalconStor, Inc. "The Alacritech accelerator provides an ideal, single, universal interface for customers deploying IPStor for NAS or a storage area network. The combined solution provides our mutual customers with considerably greater performance and value in both NAS and SAN environments."

"Storage consolidation in NAS environments will continue, and management, scalability and greater performance are key enablers," said John Webster, CEO and Founder, Data Mobility Group. "To remain competitive, vendors are having to provide top-of-the-line storage management and performance acceleration."

Alacritech TCP/IP accelerators are well known as the highest-performing TCP offload and acceleration technology in the industry and are the only cards capable of moving both file- and block-level traffic. The company's new Release 3 Linux drivers provide acceleration, link aggregation and failover for leading throughput and scalability in NAS and IP storage environments.

"As the provider of the industry's leading TCP/IP offload products, our alliance with FalconStor further executes upon our business strategy and our vision for NAS," said Larry Boucher, president and CEO, Alacritech, Inc. "Alacritech's SLIC Technology® provides optimum price/performance for NAS and iSCSI storage environments as it enables the most efficient data movement. Together, FalconStor and Alacritech deliver upon the promise of high availability and business continuity in servers and networks requiring capabilities such as continuous backup and rapid data recovery."

About FalconStor IPStor
IPStor Software delivers an intelligent SAN/NAS infrastructure across heterogeneous environments by providing a comprehensive set of storage services for enterprise applications — simplifying management, ensuring data availability and recoverability, and maximizing performance.

About Alacritech Acceleration Technology
Alacritech's Gigabit Ethernet Accelerators are based on the company's patented SLIC Technology, and are the only Integrated Storage Network Interface Cards (IS-NICs) capable of significantly accelerating both IP storage and standard Ethernet traffic. Alacritech's complete line of TCP/IP accelerators are based on SLIC Technology, a TCP/IP offload and acceleration architecture proven to deliver the most efficient, top-performing server and storage traffic acceleration possible. To eliminate the network throughput, compatibility and scalability issues associated with other TCP/IP offload engines, Alacritech's data-path TCP/IP offload enables data movement to be performed by the custom ASIC on the adapter, and TCP/IP connection management and error handling to be handled by the host software.

About FalconStor Software, Inc.
FalconStor Software, Inc. (Nasdaq: FALC) is a leading developer of network storage infrastructure software solutions designed to optimize the performance and availability of today's complex IT infrastructures. Deployed by a wide range of Fortune 1000 enterprises, FalconStor's flagship product, IPStor, optimizes storage utilization, accelerates backup and recovery, maximizes I/O performance and ensures business continuity via sophisticated data replication services. It is available and supported through major OEMs, system integrators and resellers worldwide.

Founded in 2000, FalconStor is headquartered in Melville, NY, with offices throughout Europe and the Asia Pacific regions including Paris, Tokyo and Taiwan. FalconStor is an active member of the Technical Support Alliance Network (TSANet), Storage Networking Industry Association (SNIA) and Fibre Channel Industry Association (FCIA). For more information visit www.falconstor.com or call 1-631-777-5188.

About Alacritech, Inc.
Alacritech, Inc. was founded by Larry Boucher, creator of the SCSI interface, to deliver upon his vision of eliminating the server bottleneck. Today, Alacritech is the innovator of network accelerator solutions that enable fast and efficient servers and storage systems. Alacritech's complete line of high-performance TCP/IP accelerators is based on the company's patented SLIC (session-layer interface control) Technology to optimize the performance of servers, network-attached storage and iSCSI storage devices. SLIC Technology is the first fully compatible and scalable technology to offload network protocol processing, primarily TCP/IP, from software on the host system to silicon on the adapter. Based in San Jose, California, Alacritech is privately held. Alacritech is a member of the 10 Gigabit Ethernet Alliance and the Storage Networking Association (SNIA) and a founding member of the SNIA IP Storage Forum. For more information about Alacritech and its products, please visit the company's Web site at www.alacritech.com.

Alacritech, the Alacritech logo, SLIC Technology, and the SLIC Technology logo are registered trademarks of Alacritech, Inc. in the United States. FalconStor Software and IPStor are registered trademarks of FalconStor Software, Inc. All other marks are the property of their respective owners.

Press Contacts: