ExaGrid Systems Posts Record Sales in Q1 2007.

Company Achieves 6th Consecutive Quarter of Sales Growth

WESTBOROUGH, Mass. -- ExaGrid Systems, Inc. (www.exagrid.com), the leader in cost-effective and scalable disk-based backup solutions, today announced record sales for the first quarter ending March 31, 2007. First quarter sales for the company were up 66% compared to Q4'06. ExaGrid's compound quarter-over-quarter average growth rate, Q4'05 to Q1'07, is 54%.

Along with record sales results, the company continued to execute in a variety of important areas during the quarter. Key achievements in Q1 2007 include the following:

* Strong repeat business: More than 20 percent of ExaGrid's customers have now made follow-on purchases adding to their initial ExaGrid deployments.

* Many new competitive customer wins in key industry verticals: ExaGrid continues to win against its competitors, gaining new customers in key industries such as, Healthcare; Banking; Engineering Services; Architectural Firms; Manufacturing; Legal; Transportation and Education. For more customer-related information visit: http://www.exagrid.com/products/success_stories.html.

* Increased adoption of onsite and offsite solution: Nearly 60 percent of ExaGrid's customers have now adopted the ExaGrid disk-based backup solution for onsite and offsite backups - many of them eliminating tape from their backup process.

* Government contract addition: The ExaGrid system was added to a major government contract acquisition vehicle in Q1'07. ExaGrid is now a featured Contract Line Item Number (CLIN) via the Air Force sponsored Network-Centric Solutions (NETCENTS) contract. For more information on ExaGrid's availability via government contracts visit: http://www.exagrid.com/partners/federal.html.

* Expanded sales channels: In Q1 ExaGrid launched sales and marketing efforts into the Canadian market and also launched a value added reseller recruitment program to aggressively expand the sales and marketing reach of the ExaGrid solution.

* Expanding industry partnerships: In Q1 ExaGrid began joint sales and marketing campaigns with several backup software leaders, including: CA, CommVault and Symantec. A joint ExaGrid and CommVault on-demand Webcast is available now via: http://www.eseminarslive.com/article2/0,2144,2106485,00.asp. ExaGrid also announced that it has been named a Symantec Technology Enabled Partner, delivering test-certified interoperability with Backup Exec and NetBackup. For more ExaGrid and Symantec-related information visit: http://www.exagrid.com/news/pr_031907.html.

"ExaGrid is a fast-growing leader in the disk-based backup market," said Bill Andrews, president and CEO of ExaGrid Systems. "ExaGrid's sales to a diverse set of mid-market and small enterprise companies increased substantially in Q1 '07. About half of the customers use an ExaGrid system onsite and continue to use tape offsite. What's more interesting is that more than half of ExaGrid's customers have also implemented an offsite ExaGrid system, eliminating both onsite and offsite tape."

About ExaGrid's Technology

The ExaGrid system is a turnkey, plug-and-play solution that sits behind existing backup applications and enables faster and more reliable backups and restores. Customers report that backup windows are reduced on average by 30 to 80 percent. ExaGrid's unique byte-level data de-duplication technology and last backup compression, coupled with high quality SATA storage, is on average 25 to 30% the price of standard storage without data reduction. This unique approach reduces the amount of disk space needed to at least 20 to 1.

About ExaGrid Systems, Inc.

Located in Westborough, Massachusetts, ExaGrid is the leader in cost-effective and scalable disk-based backup solutions. A highly scalable system that works with existing backup applications, the ExaGrid system is ideal for mid-market and small enterprise companies looking to quickly eliminate the hassles of tape backup while reducing their existing backup windows. ExaGrid's innovative approach minimizes the amount of data to be stored by providing standard data compression for the most recent backups along with byte-level delta data reduction technology for all previous backups. Customers can deploy the ExaGrid system at a primary site and at a second site to supplement or eliminate offsite tapes with a live data repository or for disaster recovery. For more information, contact ExaGrid at 800-868-6985 or visit www.exagrid.com.

ExaGrid is a registered trademark of ExaGrid Systems, Inc. All other trademarks are the property of their respective holders.