ARSENAL DIGITAL SOLUTIONS CAPITALIZES ON GROWING MARKET FOR NETWORK-BASED DISTRIBUTED DATA PROTECTION

Arsenal Digital Solutions®, the leading Storage Management Services (SMS) provider, announced today it capitalized in 2005 on a marked increase in demand for secure, network-based solutions for distributed data protection. Arsenal predicts sustained success in 2006, especially as organizations in financial services, healthcare and government sectors move to mitigate the risk of lost data and meet regulatory requirements such as Sarbanes-Oxley and HIPAA.

In 2005, Arsenal celebrated its 20th consecutive quarter of revenue growth and expanded its footprint dramatically. The company grew its employee base by 12 percent and managed more than 12 Petabytes of data in 2005. It also added several new partners and extended its customer base to more than 900 businesses, spanning five continents.

The industry has noticed Arsenal's success as well. In 2005, Triangle Business Journal named Arsenal the Research Triangle Park region's 13th fastest growing private company. Telecommunications magazine designated Arsenal as one of the "10 Coolest Companies for 2005" for its ability to drive revenue and enhance the competitive advantage of communications service providers. In addition, Arsenal's ViaRecovery TM service gained Honorable Mention in Computerworld's Horizon Award program for important new information technologies, while ViaRemote® was named a midmarket "Product of the Year" by VARBusiness magazine.

"Before Arsenal, the doors that our manual backup process left open had always gnawed at me," said Chuck Ladd, principal engineer, Strahan Associates. "If we had a flood in the computer room, for example, or a fire or theft, we could be out a week's worth of data or more. Now I can sleep at night knowing that we're backing up our data offsite, every day."

"2005 was a significant year for Arsenal," said Frank Brick, chairman and CEO, Arsenal Digital Solutions. "We look forward in 2006 to building on market acceptance of our services that augment internal IT capabilities to ensure better business continuity, disaster recovery and regulatory compliance."

Arsenal Digital Solutions is one of the world's largest and most trusted providers of Storage Management Services. The company's comprehensive portfolio of fully managed, on-demand solutions support the complex storage, data protection, business continuity, disaster recovery and regulatory compliance needs of more than 900 businesses in 62 data centers in 35 cities worldwide, including many Fortune 500 companies. With a 100 percent recoverability record and proven SAS 70 storage processes and methodologies, Arsenal has continuously led the industry in service innovation by simplifying and automating tasks traditionally needed to manage multi-vendor enterprise storage and data protection environments. By outsourcing this essential business requirement, customers reduce costs, optimize performance and increase visibility over their storage and backup solutions. Headquartered in Cary, N.C., Arsenal is a privately held, venture-backed company. For more information on Arsenal, its solutions and services, visit www.arsenaldigital.com.

Arsenal Digital Solutions and ViaRemote are registered trademarks, and ViaRecovery is a trademark, of Arsenal Digital Solutions USA, Inc. All other trademarks and service marks mentioned herein are property of their respective owners.

For more information, contact:
Steve Siegel
Arsenal Digital Solutions
919-466-6707
ssiegel@arsenaldigital.com

Dave Resnic or Robert Skinner
Schwartz Communications, Inc.
781-684-0770
arsenal@schwartz-pr.com