Rackable Systems to Divest RapidScale(TM) Storage Business

Rackable Systems, Inc. (NASDAQ:RACK), a leading provider of servers and storage products for large-scale data centers, today announced it intends to divest its RapidScale™ line of storage solutions. This business line includes patents, hardware assets, a development team and on-going business relationships. The RadipScale solution delivers high levels of performance while improving capacity and performance scalability, ease of data management and capacity utilization. RapidScale’s clustered file system solutions provide high performance I/O connectivity between servers and commodity-based storage subsystems. The product highlights include: Truly parallel architecture for near-linear scaling, making it possible to build very large storage clusters that scale in both capacity and performance, while maintaining simple management and low cost Patent portfolio covering key technology differentiators including the management of local client cache buffers in a clustered computer environment, methods for retrieving and modifying data elements on a shared medium, and methods and systems for network storage device failure protection and recovery Distributed Parity Engine offering high availability which ensures the entire global file system will stay available even during the failure or outage of an entire storage target World-class engineering team with over 200 years of combined experience across clustered file systems, block level storage, backup facilities, iSCSI and open source As discussed on the company’s recent Q2 earnings call, the decision was made to seek strategic alternatives for the RapidScale product and thus Strategic Advisory Services International, LLC has been retained as the financial advisor. Rackable Systems’ storage portfolio also includes Linux and Microsoft Windows™ ready Integrated and Network Storage Servers, which provide incredible configuration flexibility and leading levels of power efficiency and density. Available with a choice of AMD or Intel processors, a variety of chassis profiles including Half-Depth and Standard-Depth, 2U or 3U rack-mount chassis, and up to 18 hot-swap SAS or SATA II disk drives, these solutions significantly lower operational costs at the data center level. Cautionary Statement Regarding Forward Looking Statements This press release contains forward-looking statements, including statements regarding Rackable Systems’ intention to divest its RapidScale line of storage solutions and the announcement of a global partnership. Any statements contained in this press release that are not statements of historical fact may be deemed forward-looking statements. Actual results may differ materially from forward-looking statements due to a number of risks and uncertainties including: Rackable Systems may not be able to find a buyer for the RapidScale line, Rackable Systems operates in a very competitive market, and increased competition has in the past, and may continue, to cause pricing pressure on Rackable Systems' products, which would negatively affect Rackable Systems' gross and operating margins, as well as other financial measures; a significant portion of the company's revenues come from a small number of customers, and so the delay in placing an order, or the failure of a significant customer to place additional orders, could have a significant negative effect on Rackable Systems' financial performance; orders for Rackable Systems' products can be received at the end of the quarter, and so a delay in placing an order in the fourth quarter could have a significant negative effect on Rackable Systems' financial performance for the year; the failure of the RapidScale products to achieve market acceptance; Rackable Systems is unable to control component pricing, such as DDR memory pricing as has happened in the past, and as a result component pricing can rise unexpectedly, negatively impacting Rackable Systems' gross margins as well as other financial measures; Rackable Systems may be required to write-off additional significant amounts of excess and obsolete inventory; and new products by competitors may come on the market, which would decrease the demand for Rackable Systems' products. Detailed information about these and other potential factors that could affect Rackable Systems' business, financial condition and results of operations is included in Rackable Systems' Form 10-K under the caption "Risk Factors", in Part I, Item 1A of that report, filed with the Securities and Exchange Commission ("SEC") on March 13, 2008, as updated by Rackable Systems’ subsequent filings with the SEC, all of which are available at the SEC's Web site at www.sec.gov. You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date of this release. Rackable Systems undertakes no responsibility to update the information in this press release. About Rackable Systems Rackable Systems, Inc. (NASDAQ:RACK) is a leading provider of Eco-Logical™ servers and storage products for large-scale data center deployments. The Company's products are designed to provide benefits in the areas of density, thermal efficiency, serviceability, power distribution, data center mobility and remote management. Founded in 1999 and based in Fremont, California, Rackable Systems is a founding member of The Green Grid and serves Internet, enterprise software, federal government, entertainment, financial services, oil and gas exploration and high performance-computing customers worldwide. To learn more about Rackable Systems visit www.rackable.com