Virtual IronSoftware raised 20M, Intel Capital coinvested

Virtual Iron Software (www.virtualiron.com), the leading provider of enterprise server virtualization made easy, today announced that it has secured $20 million in new venture equity financing. The funding, provided at an increased valuation, will be used to accelerate product development and expand global sales, marketing and distribution efforts. The investment brings Virtual Iron's total venture funding to $65 million in invested equity capital and includes Highland Capital Partners, Matrix Partners, Goldman Sachs, Intel Capital and SAP Ventures.

"This funding and the increased valuation are a reflection of Virtual Iron's strong market momentum. The server virtualization market is exploding and Virtual Iron is growing faster than the market itself," said Ed Walsh, CEO of Virtual Iron. "Virtual Iron is known for providing enterprise server virtualization made easy. Our clients and partners get all the advanced benefits of server virtualization without the cost and complexity. The company's market momentum is a direct result of the significant value our software delivers for our clients and partners."

Virtual Iron specializes in enterprise-class server virtualization and offers comparable capabilities to market leader VMware but in the industry's easiest-to-use package. The software is currently deployed in over 1,450 organizations worldwide. Recent highlights for the company include:

- Dramatic growth in revenue over the last 12 months
- Strong international expansion; over 40% of Virtual Iron's revenue and customers now come from outside North America
- Approximately 10X growth in the number of channel partners over the last 12 months
- Tier 1 distribution agreements with Tech Data Corporation, Avnet, and expansion of its distribution network in Asia-Pacific and EMEA
- Reseller agreements with Dell, HP and Arrow Electronics
- The December 2007 release of Version 4.2 of its server virtualization platform � the first Xen�-based solution to offer expanded high availability and disaster recovery capabilities to strengthen support for production use cases and workloads
- Broad expansion of its technology partner ecosystem including new and expanded agreements and collaboration with Compellent, Dell, EqualLogic, FalconStor, HP, IBM, Intel, LeftHand Networks, Microsoft, NetApp and PlateSpin, among others
- Participation in Microsoft's Virtualization Validation Program and Interoperability Alliance

"Virtual Iron is the only competitor to VMware in the market that has the features to support the high value use cases for virtualization such as dynamic workload management, fault tolerance, and disaster recovery," said David R. Skok, General Partner at Matrix Partners. "Virtual Iron's product is differentiated from VMware in several important ways including its ease of use, scalability and use of a standard storage architecture. There is a large and important segment of the market looking for an alternative to VMware, and uncomfortable ceding this market to EMC. This demand is allowing the company to grow at a fast rate. We're excited about the potential here, particularly given the talents of the new management team."

The server virtualization software market is growing at 60% per year according to IDC and is expected to reach over $9 billion by the year 2012, but user adoption, only at 6% today, has been hindered by the complexity and high price of established commercial solutions. Virtual Iron addresses this gap by providing customer�proven, enterprise server virtualization capabilities that are both easy to use and afford. The platform combines the Xen� open source hypervisor with robust virtualization services, policy-based management and transparent workload migration capabilities. The software takes full advantage of new hardware�assisted virtualization (Intel VT and AMD-V) to deliver near native performance. Unlike other virtualization solutions, Virtual Iron requires no installation or management of software on physical servers, further simplifying deployment and data center operations. Users leverage Virtual Iron to support a broad range of data center initiatives including server consolidation, development and test optimization, high availability, disaster recovery, capacity management and virtual desktop infrastructure (VDI).

About Virtual Iron Software, Inc. � Enterprise Server Virtualization Made Easy
Virtual Iron provides easy-to-use, enterprise-class server virtualization software solutions. The software enables organizations of all sizes to dramatically reduce the cost and complexity of managing and operating their data centers. Virtual Iron includes advanced capabilities that leverage industry standards, open source economics and built-in hardware-assisted acceleration. The software is available exclusively through Virtual Iron's Channel One partner network. Evaluation copies are available for free download at http://www.virtualiron.com/free. For more information, visit http://www.virtualiron.com or email info@virtualiron.com.