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FalconStor Software: Page 4 of 4

Another thing: Size really does matter. With 120 employees spread across five continents, tiny may no longer be the right word to characterize FalconStor. Still, next to industry giants like EMC Corp. (NYSE: EMC) and Veritas Software Corp. (Nasdaq: VRTS), which have started moving into the virtualization market as well, the company is definitely dwarfed.

"For a decade now, we've been paying lip service to how important storage is," says Enterprise Management's Karp. "And now they're saying that you should trust the most important part of your company to a small company that might not be around in one or two years." [Ed. note: Karp is referring to storage startups in general, not specifically to FalconStor.]

Huai, however, is not breaking a sweat. "All markets have many competitors," he says, insisting that the number of companies offering virtualization only validates the space that FalconStor has chosen for itself. "The fact that Veritas, EMC, and others are competing in this space shows the importance of what we're doing."

The company claims to already have about 300 customers spread across five continents, at least 10 OEM relationships, and numerous other partnerships (see FalconStor Flaps Wings for OEMs). Last week, FalconStor announced its latest reseller partnership, with Dell Computer Corp. (Nasdaq: DELL) (see Dell Resells FalconStor