IBM Teams with VMware on Capacity on Demand Service

VMware ESX Server Enables IBM's Virtual eServer xSeries Managed Hosting Offering

PALO ALTO, Calif., September 30, 2003- VMware, Inc., the global leader in virtual machine software for industry-standard systems, today announced that IBM has selected VMware ESX Server to be the platform for its new Virtual eServer xSeries Managed Hosted offering. With the new offering, customers deploy single or multiple applications or services within a VMware virtual machine running on an IBM eServer xSeries server in a secure hosting environment, paying only for the computing power and capacity they require.

"Businesses are demanding increased flexibility in their environments for deploying applications," said Michael Riegel, marketing executive, IBM e-business Hosting. "Together, VMware and IBM will be able to provide customers with a comprehensive, scalable service to help them reduce costs and achieve greater agility."

IBM Virtual eServer xSeries provides customers with a secure, scalable, virtualized server platform to deploy Microsoft Windows-based applications or services. IBM supplies and manages the physical server(s) and the infrastructure that comprise the virtual server environment, using VMware ESX Server to implement a customer's virtual environment. Customers share the infrastructure and each customer's virtual environments are isolated and independent of other virtual environments.

"The combination of IBM eServer xSeries performance and manageability with VMware ESX Server has been a winning combination for thousands of our joint customers," said Diane Greene, president and CEO, VMware. "Now, we're pleased to team with IBM once more to bring cost-effective flexible computing to IBM's eServer xSeries Managed Hosting customers."

About VMware, Inc.

VMware, Inc. is the global leader in virtual machine software for industry-standard systems. With more than 5,000 customers worldwide and 80% of the Fortune 100, VMware provides companies with a proven set of enterprise products and solutions to consolidate their server infrastructure, improve software lifecycle management and provide application compatibility in mixed operating system environments. VMware's products enable companies to flexibly scale and control their infrastructure to quickly respond to business demands, improve return on investment and dramatically reduce total cost of ownership. VMware is based in Palo Alto, California. For more information, visit www.vmware.com or call 650-475-5000.

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