SAN DIEGO, CALIFORNIA, and MELVILLE, NEW YORK, March 21, 2001 - BakBone Software (TSE: BKB, OTC: BKBOF), a global provider of storage management software, and FalconStor Software, a network storage infrastructure company, today announced an alliance that will result in the worldwide bundling of BakBone's NetVault™ backup/restore software with FalconStor's IPStor™.

The agreement covers a previously un-addressed requirement in the rapidly growing field of storage via IP. With today's announcement, companies will be able to run NetVault on IPStor servers to locally backup and restore their data with unprecedented speed, while at the same time relieving application servers on an IP-based SAN from the processing burdens imposed by traditional backup methods.

"Our customers are interested in the promise that IP storage represents and are seeking ways to take advantage of it throughout their organizations," said Derek Gamradt, Chief Technology Officer of StorNet, one of North America's largest storage services providers. "They have expressed the need for pre-certified solutions, removing a barrier to adoption. Today's announcement between BakBone and FalconStor is a major step in that direction. Both companies have worked together to enable a faster and surer implementation, which represents a clear advantage to our clients and StorNet."

FalconStor officials said they will provide a customized version of NetVault with every copy of IPStor. The agreement between the two companies allows users to combine the advanced storage features of IPStor with NetVault's unparalleled performance and simplicity in one cohesive bundle. Each IPStor software disk will empower users to seamlessly integrate IPStor's Zero-Impact Backup and Restore Facilitator with NetVault's proven ability to help enterprises quickly and powerfully manage their corporate-critical data.

In addition, the two companies have agreed to collaborate on product testing to maintain the highest degree of compatibility and performance. Officials from the two companies said they will jointly demonstrate their products at Storage Network World, April 9-11, 2001, at Palm Desert, California. The companies have also agreed to jointly develop network and product architecture solution sets and certifications, as well as actively pursue cooperative marketing programs to increase industry awareness of Linux-based solutions in data storage networking environments.

"IPStor provides a real benefit to people running corporate storage networks," said Tony Cerqueira, BakBone's Chief Executive Officer. "FalconStor's software enhances NetVault's backup and restore capabilities by providing a unique, transparent interface to perform live snapshot backups of data, without involving the application server. Working together, NetVault and IPStor will extend NetVault's power and simplicity with the benefits of virtual localized storage that IPStor offers, optimizing both data transfer and data integrity."

ReiJane Huai, the CEO/President of FalconStor sees additional advantages. "We see NetVault as a natural complement to IPStor's disaster recovery functions. Systems administrators have the right to insist on a higher level of dependability and reliability in their data backups, something not always possible in today's complex, networked environments. The combination of IPStor and NetVault achieves that goal."

BakBone's NetVault represents a radical departure from software solutions offered by other firms, which require substantial upgrades and intensive technical support for companies seeking to grow their storage capabilities from direct-attached storage through NAS and SANs. It continues BakBone's tradition of offering software that combines powerful performance with unparalleled ease of use. In addition, the software is designed so that it can be installed within minutes or hours, instead of the days or weeks required by competing products.

IPStor is the industry's first, software-only solution to allow users to construct an IP-based network storage infrastructure using off-the-shelf components such as Gigabit Ethernet, SCSI, and Fibre Channel. The software allows for a convergence of storage and networking while providing the full array of storage services: high availability, mirroring, replication, snapshot, LAN-free serverless backup facilitator, and zero-impact backup and restore facilitator.

About FalconStor

FalconStor Software, Inc., is a storage infrastructure company bridging the divide between storage and IP networking. FalconStor's IPStor is the first software to centralize, virtualize and provision storage over IP using standard industry components such as Gigabit Ethernet, Fibre Channel, and SCSI, with future support for iSCSI and InfiniBand. Unlike network storage products that focus either on FC-to-IP tunneling or storage management, IPStor is the only product to combine IP-connectivity with essential enterprise-class storage services: virtualization, high availability (active-active failover), mirroring, replication, snapshot, and transparent integration with standard industry backup/recovery software. In addition, IPStor software unifies Storage Area Networks (SAN) and Network Attached Storage (NAS) under a common management umbrella, delivering both block and file level sharing to application servers and workgroup users.

About BakBone Software, Inc.

BakBone Software (TSE: BKB, OTC: BKBOF) is an international storage management software company that develops and globally distributes industry-leading storage management solutions to the open systems markets, providing data protection and management solutions scalable from workgroup to enterprise that will grow with a company's needs. BakBone's core products include nearline optical and archival, as well as tape backup and restore software for a full suite of storage management solutions to the corporate data center.

BakBone's corporate headquarters is located at 10145 Pacific Heights Boulevard, San Diego, California 92121. Its stock is listed on the Toronto Stock Exchange and is included on the TSE 300 Composite, S&P/TSE Canadian SmallCap and TSE 200 indices. For more information on BakBone products, call 858-450-9009, e-mail sales@bakbone.com, or access BakBone's web site at www.bakbone.com.

Safe Harbor

The statements contained in this press release that are not historical in nature are forward-looking statements. Forward-looking statements are not guarantees since there are inherent difficulties in predicting future results, and actual results could differ materially from those expressed or implied in the forward-looking statements.

BakBone Software, the BakBone logo, and NetVault are all trademarks or registered trademarks of BakBone Software, Inc., in the United States and/or in other countries. All other brands, products or service names are or may be trademarks or service marks of, and used to identify, products or services of their respective owners.