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Virtual Iron Secures Financing from SAP Ventures

Market Momentum and Proven Management Team Attracts Financing from World's Largest Business Software Company

Lowell, MA, May 1, 2006 – Virtual Iron Software (www.virtualiron.com), a provider of software solutions for creating and managing virtual infrastructure in the data center, today announced that it has secured additional venture financing from SAP Ventures. The investment brings Virtual Iron’s total venture funding to $31.5 million. SAP Ventures joins Virtual Iron’s prestigious list of blue chip investors - Highland Capital, Matrix Partners, Goldman Sachs and Intel Capital.

“SAP has been evaluating multiple virtualization approaches and solutions and Virtual Iron is an excellent choice for its vision, comprehensive product capabilities and experienced management team,” said Vishal Sikka, Senior Vice President and General Manager of Architecture at SAP. “Virtual Iron is well positioned to drive innovation in a market poised for aggressive growth.”

Virtual Iron specializes in advanced virtualization and policy-based management software solutions. In early April, the company announced the latest release of its software. The new version combines Virtual Iron’s enterprise-class virtualization and management capabilities with the open source Xen hypervisor. With it, Virtual Iron will be the first to deliver native virtualization and simultaneous support for both 32 and 64-bit unmodified Linux and Windows operating systems and applications on Xen. It takes full advantage of new hardware-assisted virtualization capabilities from Intel and AMD, and requires no installation or management of the virtualization services on physical servers. As a result, users streamline data center management and reduce operational costs while preserving investments in their existing software stack. (See press release.)

“The market is calling for more comprehensive, sophisticated capabilities combined with a more cost-effective alternative to proprietary and expensive virtualization solutions,” said John C. Thibault, President and CEO of Virtual Iron. “We are pleased to have SAP’s support and are collaborating on joint initiatives to bring a new level of advanced virtualization to our customers. This news is a testament to the potential of Virtual Iron and that of our vision to offer users choice and flexibility.”

According to IDC, today about 3-5% of all x86-based server workloads are in virtual machines. This is estimated to grow to 20% by the end of 2006. Virtualization is a critical component of the computing environment and it will only increase in its importance as organizations gravitate toward more efficient, flexible IT. A February, 2006 survey conducted by Forrester found that, of 1,221 enterprises with more than 1,000 employees, some 41 percent already had implemented or were planning to implement virtualization software.

About SAP Ventures

Since 1996, SAP Ventures has been investing in companies that offer exciting new technologies and applications. Leveraging years of experience and drawing on a network of powerful business relationships, SAP Ventures helps entrepreneurs and management teams recruit the best people, make the right technology decisions, win new business, and build their own partner networks. The goal of SAP Ventures is to grow businesses that create shareholder value for everyone involved. For more information, visit www.sapventures.com.

About Virtual Iron Software, Inc.
Virtual Iron provides Xen-based software solutions for creating and managing virtual data center infrastructure. Its software enables companies to dramatically reduce the cost and complexity of managing and operating their enterprise data centers. The company is focused on delivering advanced virtualization capabilities that exploit industry standards, open source economics and processors with virtualization technology built-in. Large organizations use Virtual Iron’s software for consolidation, rapid provisioning, business continuity, workload management and policy-based automation to deliver proven improvements in utilization, manageability and agility. Virtual Iron is privately held and based in Lowell, Massachusetts. For more information, visit www.virtualiron.com or email info@virtualiron.com.


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