SYSTEMS

Rackable Systems, the leading provider of servers for large-scale data center deployments, today announced explosive growth in 2003, with 45 new customer wins in key vertical markets such as life sciences, government laboratories, oil and gas exploration, Web serving and entertainment. New customers include Aechelon Technology, Snapfish, Super Computer International, Inc. and Toshiba America Electronic Components, Inc. Rackable Systems exceeded its financial goals in 2003 and exited the year at a $100 million run rate. Key highlights for 2003 include: -- Accelerated revenue growth and achieving the third straight year of profitability in one of the fastest growing segments of the server market; -- Average sales of 98 servers per customer in 2003; -- Launch of award-winning Distributed DC Power technology, a leading-edge solution for heat and power management in the data center; -- Expansion of the direct sales force throughout new geographies and vertical markets in the United States. "Large enterprises are increasingly interested in cluster computing as the number of cluster-aware applications steadily grows," said John Enck, Vice President, Gartner, Inc. "The price/performance and availability characteristics of a compute cluster often outshine a traditional large system solution." "As the leading online photo service with over seven million members, our feature-rich website requires a data center that will continuously support our large customer base simultaneously accessing our applications," said Bakty Motiram, Director of Information Technology, Snapfish. "Rackable Systems was able to create an innovative, scalable data center design that delivers reliability and manageability, as well as power efficiency and ease-of-installation that lower our overall computing costs." With a flexible build-to-order approach, Rackable Systems server solutions have been shown to reduce Total Cost of Ownership by up to 85% over competitors Dell, HP and IBM. The company's patented server designs in 1U, 2U and 3U form factors feature key competitive differentiators in the areas of density, serviceability, open architecture, remote management, thermal efficiency and power distribution techniques. Rackable Systems holds multiple patents and successfully defended them in 2003, winning injunctions against Einux, HPC and King Star. With the launch of its Distributed DC Power technology in late 2003, Rackable Systems continued to build on its reputation as one of the industry's leading innovators. By using Distributed DC-powered servers, data centers can achieve up to 30% greater server reliability and up to 40% reduction in heat over competitors' AC-based solutions -- generating significant long-term savings in power, HVAC and maintenance costs. Rackable Systems' design improvements demonstrate the company's ongoing commitment to providing innovative and effective solutions to its growing roster of customers who demand superior cluster computing performance and value. In other recent news, Rackable Systems was awarded the 2004 LinuxWorld Conference & Expo Product Excellence Award for Best Cluster Solution, selected over products submitted by IBM, SGI and VERITAS. The award recognized Rackable Systems' Distributed DC Power technology as the best cluster technology available to customers of both Linux and open source. "2003 was an incredibly strong year for Rackable Systems as we continued to deliver innovative server solutions to a growing list of customers," said Tom Barton, president and CEO, Rackable Systems. "Our 100% revenue growth exemplifies the need for servers that meet the demands of large-scale data center deployments, and validates what we're hearing from our customers -- that Rackable Systems is setting the standard for server technology and service, and providing a real alternative to legacy vendors."