26% Growth Revenue for Sepaton From 2Q08 to 3Q08

SEPATON, Inc. announced strong results for the third quarter of 2008 ending September 30. Third quarter sales for the company were up 26% compared to the previous quarter, Q2 2008. Margin dollars grew 59% and overall product margins grew 15% points from the previous quarter due to growing data deduplication software demand. SEPATON’s install base now totals more than 1,000 customers of its enterprise-ready data protection platform.

Significant growth was experienced through both direct sales channels and via resellers and distributors. Especially notable was the winning of the largest public sector deal in the company’s history for its data deduplication software and virtual tape library (VTL). This deal totals several million dollars and is indicative of the much larger deals in the pipeline as data deduplication technology is proven to provide significant cost savings.

"We’re very pleased with the accelerated growth of our sales directly to enterprise users and via the channel," said Mike Worhach, president and CEO, SEPATON, Inc. "We recognize that while the outlook for capital expenditures will be constrained given the stark economic realities around the globe, the one bright spot is cost-containment technologies like SEPATON’s deduplication software that requires no new training, yields unmatched cost-savings compared to alternative approaches, and comes with an industry-first guarantee to eliminate buyer risk."

Gartner continues to forecast significant growth for the disk-to-disk backup and recovery market as well. "In early 2006, Gartner stated that ‘Disk-to-disk backup and, therefore, disk-based recoveries will be the most significant technology impact on recovery in the next five years’," said Dave Russell, research vice president, and John P. Morency, research director, Gartner, in the March 20, 2008 report entitled Cool Vendors in Data Protection, 2008. "In 2008, Gartner reiterates that this trend will continue. In fact, we have seen a significant uptake in the adoption of disk-based recovery solutions in 2007 and early 2008. End-user inquiry and conference polling results show that disk-based backup, heterogeneous replication, deduplication and VTL offerings are being considered and deployed at an accelerating rate."

SEPATON’s suite of VTL and data deduplication products built upon its unique ContentAware architecture is the foundation for the company’s vision to enable data risk management and provide enterprise-class data protection. In June, SEPATON unveiled the S2100-ES2 Series 1000 VTL and released Version 5 DeltaStor software with enhanced deduplication performance and scalability. Together, these solutions enable large enterprises to back up, restore, and deduplicate petabytes of data at unmatched speed and efficiency. These enhancements have been applauded by customers and partners. For example, in June SEPATON and HP renewed its OEM agreement. The contract now contains terms to reflect new HP products that bring SEPATON’s ContentAware deduplication to market as accelerated deduplication.

SEPATON is also ramping up partners in its recently strengthened channel program to take its enhanced data protection platform to market. The SEPATON Catalyst Partner Program provides financial and technical advantages to qualified channel partners worldwide to respond to the demand for advanced data protection solutions. Since launching this program, SEPATON has succeeded in bringing together the most skilled, full-service storage resellers intent on delivering comprehensive enterprise-ready VTL and data deduplication solutions. The FastStart Plus data deduplication guarantee has helped fuel the success of this channel, winning business for partners around the globe including South Africa, United Kingdom, China and the U.S.