Press Release

Nissho to Sell Azul Systems Compute Pools as Core Utility Computing Technology

MOUNTAIN VIEW, California - October 12, 2004 - Azul Systems, Inc. today announced it has entered into a partnership with Nissho Electronics Corporation to deliver the industry's first network attached processing solution to customers in Japan. Under the terms of the agreement, which covers distribution rights, Nissho will sell and support Azul Systems™ compute appliances in Japan. In addition, Nissho is investing in Azul Systems. The Azul Systems innovative solution provides unbound compute resources for Java™ and J2EE™ platform-based applications and can be added to existing data centers without requiring any changes to applications or existing environments.

Network attached processing, which eliminates the need for capacity planning at the individual application level, will be a core technology solution in Nissho's utility computing strategy, which focuses on providing computing power on demand and outsourcing computing resources. Nissho Electronics has an unparalleled reputation for marketing advanced technologies in information technology, networking and communications, e-business solutions, and advanced electronics. Through this partnership, Nissho will provide to customers in Japan Azul compute pools, made up of compute appliances, as a way to increase efficiency, eliminate complexity and drive down costs in the data center.

"The Japanese market requires high-quality products that reflect Japan's unique needs and that are supported by a world-class sales and support organization," said Matt McLaughlin, vice president worldwide field operations. "Nissho Electronics has demonstrated this excellence repeatedly dating back to a relationship forged between Nissho and our CEO Stephen DeWitt when he was CEO of Cobalt Networks."

"Nissho was one of the earliest evangelists of network attached storage, and we believe that network attached processing will play an equally vital role in our utility computing solutions," said Takashi Fukuda, senior managing executive officer of Nissho Electronics. "The Azul team has developed a truly innovative product that will deliver immediate cost and efficiency benefits to our customers."

The Azul Systems network attached processing solution will be delivered via three unique technologies:

• Mountable pools of compute for Java™ and J2EE™ platform-based applications enabling any application to draw computing resources from the same massive enterprise resource.
• Flexible, policy-based management software provides comprehensive command and control of compute pool resources.
• Transparent virtual machine proxy technology redirects applications to the compute pool without any changes or modifications to applications or the existing infrastructure configuration.

Field trials will begin in Japan starting later this year.

About Nissho Electronics
Nissho Electronics is one of Japan's leading distributors and system integrators of IT related products and services such as server storage, carrier-class backbone networks, software, system components, and peripherals. Nissho's principal role is to provide the Japanese market with advanced products and services incorporating new technologies, as well as to offer new approaches. Working with its customers, Nissho identifies cutting-edge technologies that best meet their current and future needs, and helps them find ways to utilize the technology. For more information about Nissho, visit www.nissho-ele.co.jp or call +81-3- 3544-8448

About Azul Systems, Inc.
Azul Systems is introducing the industry's first network attached processing solution designed to unbound compute resources for Java and J2EE platform-based enterprise applications. Azul compute appliances eliminate capacity planning at the application level and much of the cost and complexity associated with the conventional delivery of computing resources. More information on Azul Systems can be found at www.azulsystems.com.

Legal Notices
Azul Systems, Azul, and the Azul arch logo are trademarks of Azul Systems, Inc. in the United States and other countries. Microsoft is either a registered trademark or trademark of Microsoft Corporation in the United States and other countries. Java and all Java based trademarks and logos are trademarks or registered trademarks of Sun Microsystems, Inc. in the United States and other countries. Other marks are the property of their respective owners and are used here only for identification purposes.

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