XOsoft Reports Record Growth for 2005

Success Includes 120% Revenue Growth Year-Over-Year; New Products, Customers and Partners

Waltham, MA, December 13, 2005 — XOsoft, a leading provider of continuous application availability software solutions, today announced dynamic growth in 2005; having more than doubled revenues from 2004. In addition to surpassing revenue targets, XOsoft has seen twelve consecutive quarters of growth, released three new products, added substantial customers to its portfolio globally, developed a solid go-to-market partner strategy and increased headcount within multiple business areas, including its sales, support and R&D organizations.

Experiencing 120 percent growth over last year and 30% revenue growth quarter-over-quarter, XOsoft has doubled its sales team for both domestic and international markets, as well as doubled its Support and R&D teams. This outstanding growth was achieved while keeping the company cash flow positive.

"2005 was an exceptional year across the board for XOsoft," said Leonid Shtilman, founder and CEO, XOsoft. "Our strong customer achievements and innovative solution offerings coupled with our financial success enables us to build a stronger leadership position within our marketplace."

Successful New Products

During 2005 XOsoft launched three new products:

• WANSyncCD (Feb 2005) - A branch office solution for consolidation and distribution of enterprise content. Some of XOsoft's largest customers in the financial and media markets have already deployed thousands of licenses this year
• Assured Recovery (May 2005) - XOsoft's revenue success is greatly attributed to high sales of its Assured Recovery solution. Awarded with a patent by the U.S. Patent and Trademark Office in October 2005, Assured Recovery dramatically reduces the cost of testing application recoverability on a replicated system. Since the product's launch, 60 percent of new XOsoft customers have purchased Assured Recovery bundled with the award-winning WANSyncHA
• InMotion for Exchange (Nov 2005) - A new solution to automate upgrades, maintenance and migration tasks associated with Microsoft Exchange Servers. With InMotion, XOsoft expanded its position in the market by providing solutions for planned as well as unplanned downtime

In addition to the new product releases, XOsoft's flagship solution, WANSyncHA, won Storage/SearchStorage.com's Product of the Year Gold Award in the Backup and Disaster Recovery category.

Customer Growth and International Success

In 2005, XOsoft saw a dramatic increase in sales, increasing its market and mind share with customers in 27 countries. The company is slated to exceed 1,000 customers worldwide by the end of Q4 with many Fortune 1000 clients deploying globally.

"We believe our success is based on our understanding that businesses work in document-rich environments where employees must be able to access critical information assets at any given moment," said Tom O'Connell, president, XOsoft. "Our strength has been in delivering these types of solutions that provide consistent service and insurance to guarantee our customers are working at maximum functionality and productivity."

Strengthened Partnerships

In 2005, XOsoft launched the Business Partner Program to provide increased rewards and attention to VARs, systems integrators and consulting companies committed to promoting XOsoft's continuous application availability product suite. The Business Partner Program was designed to demonstrate the collaboration between XOsoft and its partners to deliver best-of-breed continuous application availability solutions to their mutual customers. XOsoft exceeded its goal of recruiting 100 partners worldwide this year.

Additionally, XOsoft significantly strengthened its Microsoft relationship, achieving 283 points out of a possible 300 assigned to Gold Certified partners. This achievement puts XOsoft in the upper-echelon of Microsoft Gold Certified partners. "Solutions Competencies are an important way for Microsoft to better enable ISVs to meet customer needs," said Sanjay Parthasarathy, corporate vice president of the Platform Strategy & Partner Group at Microsoft. "They allow ISVs to keep and win customers with their deep knowledge of solutions-based Microsoft platform technologies."

Keeping the Momentum

"We are very proud of the phenomenal success we achieved in 2005," said Gil Rapaport, executive vice president of Marketing and Strategy, XOsoft. "Not only have we established ourselves as a leader in the market with products that technically deliver what they promise, we're providing real solutions to serious business issues that help keep our customers operational. We're excited about our overall growth and look forward to continued success in 2006."

XOsoft plans to emulate this growth in 2006. The Company intends to double its size in terms of both revenue and employees, with two major announcements scheduled for January and three innovative new product releases for the upcoming year.