Crossroads Systems Names Larry Sanders Chief Executive Officer; Proven Track Record of Success Positions Company for Growth.

Business Editors and High-Tech Writers

AUSTIN, Texas--(BUSINESS WIRE)--Aug. 21, 2001

Crossroads Systems Inc. (Nasdaq:CRDS) a global provider of connectivity for storage networking solutions, today announced that Larry Sanders, Crossroads' president and chief operating officer, has been named chief executive officer effective Nov. 1, 2001.

Brian R. Smith will remain active with the Company as the chairman of the board and will focus on the company's technology direction.

"Larry has been instrumental in evolving Crossroads from a technology-centric company to a market-driven company," said Brian R. Smith, chairman and chief executive officer of Crossroads. "Over the past year and a half, Larry has been building a stronger management team, improving processes, and driving our new customer-defined product strategy. His focus on the customer satisfaction and quality management ideally positions him to lead Crossroads."

Sanders joined Crossroads in March 2000 from Fujitsu Computer Products of America where he was the president and chief executive officer. While there, he was responsible for the successful re-engineering of the organization and spearheaded its movement toward becoming a leading global supplier of storage and imaging products by increasing revenue 600% to $1.2 billion in four years.

"I came to Crossroads because of Brian's vision and the company's strength in technology," said Larry Sanders, president and chief operating officer of Crossroads. "Under Brian's leadership, Crossroads has become the market leader in storage routing. Building on this foundation, my focus will be to drive the company to profitability."

About Crossroads Systems Inc.

With headquarters in Austin, Texas, Crossroads Systems (Nasdaq:CRDS) is a leading global provider of connectivity for storage networks regardless of technology or location. Crossroads enables protocol-independent connectivity at gigabit speeds for a wide range of devices that scale for small businesses to global enterprises. Crossroads' products are in solutions from ADIC, ATL, Compaq, Dell, Fujitsu Siemens, Groupe Bull, Hewlett-Packard, Hitachi Data Systems, IBM, McDATA, StorageTek, Sun Microsystems, Unisys, ACAL, Bell Micro, Cranel/Adexis, Datalink and Tech Data. Crossroads is a voting member of the Storage Networking Industry Association (SNIA). For employment opportunities and more information about Crossroads Systems, please visit www.crossroads.com or call 800/643-7148.

Forward-Looking Statements

This release may contain forward-looking statements that involve risks and uncertainties. Among the important factors that could cause actual results to differ materially from those in the forward-looking statements are: the quarterly fluctuations of Crossroads' operating results and Crossroads' inability to accurately predict revenues and budget for expenses for future periods; the extent of Crossroads' future operating losses and negative cash flow; the company's ability to maintain its operating margins; the deteriorating economic environment, including in particular related expense reductions by organizations affecting their IT spending and budget; the dependence of Crossroads' business on the storage area network market which is evolving and unpredictable; the possibility that the pending shareholder class action lawsuits could result in an adverse outcome to the company; Crossroads' ability to develop new and enhanced products that achieve market acceptance; the effect of competition; the effect of undetected software or hardware errors, which may affect the company's results or reduce demand for Crossroads' products in the long term; Crossroads' inability to protect its intellectual property rights, including any adverse outcome in the company's pending patent litigation with certain of its competitors; the continuation of Crossroads' successful relationships with its limited number of OEM customers, including its ability to replace revenue from ADIC and Compaq Computer Corporation and/or to realize the benefit of the new agreement with Compaq; Crossroads' ability to retain and recruit key personnel to manage its business successfully; Crossroads' ability to successfully achieve the benefits of the acquisition of Polaris Communications and any subsequent acquisition or strategic relationship; and that Crossroads' stock price could be volatile regardless of Crossroads' actual financial performance and other factors detailed in Crossroads' filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K and Quarterly Reports on 10-Q.