Dell Leads $20 Million Strategic Investment Round in VMware

Palo Alto, Calif., May 24, 2000 -- VMware, Inc., the leading provider of application and service delivery platforms based on innovative virtual machine technology, today announced the closing of a $20 million strategic financing round led by Dell.

VMware launched its first product in May 1999 - software for desktop personal computers that enables a single PC to simultaneously run multiple, protected sessions with any combination of Linux, Windows NT, Windows 2000 and other Intel based operating systems. Today, VMware has more than 385,000 registered users, and is licensed in 5,000 corporations, in more than 100 countries. The company will use the funds to accelerate the development and deployment of server-based products for providers of hosted applications and services over the Internet or corporate intranets.

"We see VMware as a significant emerging technology in the computing industry," said Jim Totton, Dell's vice president of worldwide software development. "Dell continues to invest in technologies that show strategic potential in the marketplace."

"This financing positions VMware to move into the next phase of growth and evolution of our business strategy: deploying VMware virtual machine technology as a platform for Internet commerce and infrastructure," said Diane Greene, a co-founder and chief executive officer of VMware. "We expect the investment to have a huge impact on our current desktop business as well as speeding time to market for our server products."

VMware's server products will address some of the most critical issues facing providers of hosted applications and services. These include how to guarantee security on shared servers, maintain the stability of existing servers when adding new applications and services and overcome the incompatibility of Linux, Windows NT and Windows 2000. "Today's solution - a server for each application, service or customer - is not only expensive, but creates enormous systems administration and management problems," said Greene.

In addition to Dell, the investment round also includes funding from Azure Capital Partners, Chase H&Q Capital Partners and Goldman Sachs Group, Inc.

About VMware

VMware is a leading provider of application and service delivery platforms for desktop personal computers and servers. Based on innovative virtual machine technology developed at Stanford University, VMware products allow single computers to run multiple, protected sessions on any combination of Linux, Windows NT and Windows 2000 simultaneously, offering new levels of flexibility, safety and security. VMware's customers include developers, information technology professionals and providers of hosted applications and services over the Internet or corporate intranets. VMware's software was selected as an InfoWorld analyst pick for 1999 Product of the Year. VMware is a privately held company based in Palo Alto, California. For more information, please visit the web site at http://www.vmware.com.

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VMware is a trademark of VMware, Inc. Linux is a registered trademark of Linus Torvalds. Microsoft and Windows are registered trademarks of Microsoft Corporation. All other trademarks and names mentioned herein are the property of their respective holders.