MontaVista Ends First Full Year of Operation on High Note; Revenues, Design-Wins, Head-Count, Investment, and Alliances Exceed Company's Goals, Validate Open Source Business Model.

Business Editors/Technology Writers

SUNNYVALE, Calif.--(BUSINESS WIRE)--Jan. 31, 2001

MontaVista Software, Inc., developer of the Hard Hat(TM) Linux operating system for embedded applications, announced today that the company ended fiscal year 2000 on a triumphant note, closing 15% over plan, with ten-fold revenue growth over 1999.

In 2000, MontaVista captured over 80 customer design wins and significantly grew its talent pool, organically, without need for acquisition. The company also secured over $30 million in funding from key investors, including Intel Corporation.

In the last twelve months, MontaVista clearly achieved leadership status in embedded/pervasive computing. "Our performance, as measured by revenues, customer acquisition, and head count exceeded every one of our targets," exclaimed Jim Ready, MontaVista Software CEO. "We have demonstrated that our business model is more than viable; our customers, many leading Fortune 100 companies, have validated our approach and continue to do so."

Dave Warner, MontaVista CFO adds, "Today, while many technology start-ups are struggling for their very existence, MontaVista has demonstrated how combining a solid business model, cutting edge technology and a superb team can deliver -- happy customers and happy investors go hand-in-hand."

Hard Hat Linux, from MontaVista, is built entirely on the standard Linux kernel and open-source components. It is royalty-free and optimized for embedded applications, including communications infrastructure and Internet edge device applications. MontaVista Software products streamline pervasive computing development, and Hard Hat Linux targets the broadest range of hosts, targets and boards of any embedded Linux supplier.

Expanding Worldwide Presence

During the year 2000, MontaVista grew its most valuable asset -- human talent -- from a base of 12 to an international team of 160. In 2000, MontaVista opened regional US design centers in Arizona and New Hampshire, as well as a network of US sales offices. MontaVista inaugurated international operations with its European headquarters in France, and opened branch offices in Germany, the United Kingdom, Sweden, and Japan. Further expanding its presence across four continents, MontaVista also established distribution in Benelux, Israel, Korea, Singapore, Malaysia, India, Taiwan, and China.

MontaVista began the year in offices situated only a few feet from Jim Ready's original Ready Systems plant. Quickly outgrowing this locale, MontaVista overflowed into nearby space once occupied by Ready Systems itself. Even this space could not contain MontaVista's growth, and in November of 2000, the company moved into its new corporate headquarters in north Sunnyvale, CA -- a 25,000 square foot facility.

Recognition of Excellence

At Comdex 2000, Hard Hat Linux received Linux Journal and LINUX Business Expo's Penguin Playoff Awards for Best Embedded Solution, from a field of more than 60 exhibitors at the Linux Business Expo in Las Vegas. Moreover, Hard Hat Linux was chosen as the platform of choice by global semiconductor and consumer electronics giants like Intel Corporation, NEC, 3Com, and Hitachi.

During the year, MontaVista also closed alliances with over three-dozen companies, including semiconductor manufacturers, system and board vendors and software suppliers to the embedded market place.

Looking Forward

At its recent international sales meeting in Palm Springs, CA, MontaVista's management team expressed satisfaction and lauded the progress made during the year 2000. Brian Grega, vice-president of worldwide sales vowed, "We will not rest on our laurels, but instead strive for even higher achievement in 2001."

The embedded systems software market is forecasted to exceed $1 billion in 2001, according to Venture Development Corporation. MontaVista is poised to leverage Linux into this lucrative space as the new platform of choice for embedded development.

MontaVista will exhibit at Linux World and Expo in New York City from January 31 through February 2, 2001 in Booth No. 403 and on the same dates at the Linux Expo in Paris, France in Booth No. B12. At both events the company will demonstrate an unprecedented range of products and capabilities to address critical customer needs, and will feature offerings from MontaVista and key alliances and customers, such as Intel, IBM, Motorola, 3Com, and Ziatech.

Intel Corporation and MontaVista will offer a joint reception on Jan 31, 2001, the first evening of the New York event, to showcase fruits of the growing alliance between the two companies.

Availability

The Hard Hat Linux CDK 1.2 is available immediately for all platforms via ftp at ftp://ftp.mvista.com. For information regarding MontaVista Hard Hat Linux subscriptions and services, including out-sourcing of porting, configuration, source maintenance, please contact a MontaVista associate. For additional information about Hard Hat Linux subscriptions and services contact [e-mail] or call 408/328-9200.

About MontaVista Software, Inc.

MontaVista Software Inc. is a leading provider of open-source software solutions for pervasive computing environments. Founded in 1999 by real-time operating system pioneer James Ready, MontaVista's principal offering is the Linux(R) operating system tailored for embedded software applications. MontaVista products include Hard HatTM Linux(R), a standard off-the-shelf binary distribution of Linux for x86/IA-32, PowerPC, StrongARM, MIPS and other microprocessor architectures. Hard Hat Linux offers developers a family of open source solutions for embedded design, with targeted offerings for applications ranging from communications infrastructure to thin-client and edge applications.

Headquartered in the heart of Silicon Valley in Sunnyvale, California, MontaVista Software is a privately-held company funded by leading investors such Alloy Ventures, US Venture Partners, RRE Ventures, WR Hambrecht + Co, and Intel. For more information about MontaVista, please visit http://www.mvista.com or call [phone].

Linux is a registered trademark of Linus Torvalds. Hard Hat is a trademark of MontaVista Software Inc. All other names mentioned are trademarks, registered trademarks or service marks of their respective companies.