3Leaf Systems Secures $20 Million in Series B Funding, Adds Former McData Executive to Board of Directors

Intel Capital Leads Investment Round to Fund Product Launch and Accelerate Server Virtualization Technology Development

SANTA CLARA, Calif., May 1 -- 3Leaf Systems, provider of next-generation virtualization solutions for enterprise data centers, today announced the close of its Series B round of private equity financing. The $20 million round was led by Intel Capital; existing investors Enterprise Partners, Storm Ventures, and Alloy Ventures also participated. This latest round, which raises 3Leaf Systems' total funding to $32.5 million, will be used to accelerate product development and expand marketing and sales in advance of the launch of the company's products.

"Next-generation data centers demand more flexibility and efficiency in order to accommodate evolving business and operational requirements," said Bryan Wolf, managing director, Digital Enterprise Sector, Intel Capital. "The server virtualization solutions offered by 3Leaf Systems support key corporate data center initiatives such as improved power management, optimized scale-out architectures, and architectural support for on-demand computing initiatives."

3Leaf's Virtual Compute Environment (VCE) architecture delivers system- level virtualization to enable mainframe-class capabilities for commodity servers. With 3Leaf Systems' server virtualization solutions, organizations can significantly reduce their investments in infrastructure and operations, and rapidly deploy and provision data center resources while ensuring their availability to meet the business requirements of today's applications.

Former McData President and CEO John Kelley Joins Board

3Leaf Systems also announced the addition of John Kelley to its board of directors. Kelley was named president and chief operating officer of McData in 2001, became CEO a year later, and was Chairman of the Board until the company was purchased by Brocade Communications in a deal announced last August and completed earlier this year. Before McData, Kelley served as executive vice president of Qwest Networks and president of wholesale and interconnect markets for US West. Earlier in his career, he held senior positions at Mead Corporation's Zellerbach division, NBI, and Annatech. Kelley has served on the board of directors of Polycom, a provider of voice, video and wireless technologies, since 2000.

"I look forward to serving on 3Leaf Systems' board of directors," said Kelley. "This is an exciting company that is well positioned for a successful future, and I'm thrilled to have the opportunity to be involved at this level and to help guide 3Leaf's evolution into a successful leader of server virtualization solutions for next-generation data centers."

"The additional financing and expansion of our board of directors mark a significant milestone as we enter the next phase of company growth," said Bob Quinn, CEO of 3Leaf Systems. "The support of Intel Capital; the continued commitment of Enterprise Partners, Storm Ventures, and Alloy Ventures; and the deep corporate expertise provided by board members such as John Kelley will be key as we enter a period of rapid growth and innovation, delivering our server virtualization solutions to Fortune 500 global customers."

About 3Leaf Systems

3Leaf Systems provides next-generation server virtualization solutions to support both scale-up and scale-out virtual servers in enterprise data centers. 3Leaf technology simplifies operations by increasing the utilization and availability of large-scale data center resources. A private company based in Santa Clara, California, 3Leaf Systems is backed by investors including Alloy Ventures, Enterprise Partners, Intel Capital, and Storm Ventures. For more information, visit http://www.3leafsystems.com/ or call 408-572-5900.

About Intel Capital

Intel Capital, Intel's venture capital organization, makes equity investments in innovative technology start-ups and companies worldwide. Intel Capital invests in a broad range of companies offering hardware, software, and services targeting enterprise, home, mobility, health, consumer Internet, and semiconductor manufacturing. Since 1991, Intel Capital has invested more than US$6 billion in nearly 1,000 companies in more than 40 countries. In that time, about 180 portfolio companies have been acquired and another 155 have gone public on various exchanges around the world. In 2006, Intel Capital invested about US$1.07 billion in about 163 deals with approximately 60 percent of funds invested outside the United States. For more information on Intel Capital and its differentiated advantages, visit http://www.intelcapital.com/.