Trends amaze me, because sometimes they fade as quickly as they appear -- and not just in fashion and music. I've seen many technology trends flop, as well, but the need for increasing data storage solutions is exponentially growing and will probably not be going away anytime soon.

After all, ours is an Information Age, resplendent with high-tech gizmos and gadgets that continue to produce mind-boggling piles of bytes. Big storage players like EMC (NYSE:EMC), IBM (NYSE:IBM), and Hewlett-Packard (NYSE:HPQ) may be well positioned to dominate, but lately I've been watching a much smaller company, FalconStorStorage (NASDAQ:FALC).

Why FalconStor? Well, it's a leading developer of innovative storage software solutions, with products like IPStor Enterprise Edition software, VirtualTape Library (VTL), and iSCSI Storage Server. And with many industries focusing in on continuous real-time data protection, storage, and affordability, FalconStor's VTL has been a big success. FalconStor's award-winning IPStor and VTL technologies have attracted many first-tier original equipment manufacturers (OEMs), as the new features provide data protection across the entire enterprise, from remote offices to individual desktops and notebooks.

FalconStor has signed OEM agreements with three out of the seven largest spenders in disk storage and has been singled out by Microsoft (NASDAQ:MSFT) and Hewlett-Packard in initiatives that will complement Microsoft's Data Protection Manager. FalconStor continues to impress, attracting big partners like Cisco (NASDAQ:CSCO) and its SANTap venture. To boot, FalconStor was recently featured in Deloitte's prestigious Tech Fast 50 program for New York as one of the area's fastest-growing tech companies.

FalconStor's products have performed very well so far. In fact, from 2001 to 2004, FalconStor's revenues have increased fivefold, from $5.59 million to $28.71 million. The company recently reported third-quarter earnings with revenues increasing 35% to $10.1 million -- nearly the same amount generated during all of 2002. For the first nine months, revenues have increased 45% to $27.9 on a net income of $0.6 million ($0.01 per share), compared to a net loss of $6.2 million ($0.13 per share), during the same period last year. FalconStor's most recent quarter was striking, showing continued profitability, improving gross margins, and the fourth straight quarter with positive cash flows from operations.

Although I'm storing away my shares for the long haul, I encourage investors to do a bit more research on FalconStor before taking the plunge. With a forward P/E of over 40, this stock is no bargain. But if data storage trends continue and FalconStor's innovative storage solutions continue to attract customers, FalconStor could prove to be a winner.

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Fool contributor M.D. Mitchell is down the street at the local junkyard looking for some good trash. M.D. owns FalconStor, but none of the other companies mentioned.