Zenoss Adds $11 Million

Zenoss Inc., an Annapolis, Md.-based provider of commercial open source network and systems management software, has raised $11 million in Series B funding. Grotech Capital led the round, and was joined by return backers Intersouth Partners, Boulder Ventures and the Maryland Department of Business and Economic Development.

PRESS RELEASE

Zenoss, Inc., the leading commercial open source network and systems management software provider, today announced the achievement of a series of key company milestones including an $11 million round of financing, 500,000 downloads of its flagship product and a tenfold annual increase in its commercial customer base. The company enters 2008 with tremendous momentum towards its mission to deliver powerful yet affordable IT management software leveraging the advantages of open source.

“Companies are eager for alternatives to the costly and cumbersome network and systems management tools offered by HP, IBM, CA and BMC,” said Bill Karpovich, CEO of Zenoss. “Our 500,000 downloads and the rapid growth of our commercial customer base — many of whom are large, publicly traded companies — exemplify this desire for a new approach.”

Zenoss emerged in 2007 as a leading alternative to the large proprietary vendors that have traditionally dominated the IT management software market, a market that the Gartner Group estimates at $15 billion annually. In an October 29 Network World article, Forrester Research referred to Zenoss as “a strong competitor for large frameworks. [The company has] a complete solution that monitors all components, including applications, at the event, performance, and configuration level.”

In addition to strong commercial momentum, Zenoss' open source community thrived in 2007, growing to over 25,000 registered members. Zenoss ended 2007 as the most-downloaded and highest-ranked product in its category on SourceForge.net, the world's largest open source software distribution website.

To drive continued global adoption and product innovation, Zenoss announced the closing of a Series B investment of $11 million. The investment was led by Grotech Capital, a leading venture firm with more than $1 billion under management. Existing investors Intersouth Partners, Boulder Ventures and the Maryland Department of Business and Economic Development also participated in the financing round along with several prominent industry figures including: Frank Bonsal, founder of NEA; Andre Boisvert, Chairman of Compiere and Pentaho; Mark Tolliver, CEO of Palamida and former Chief Strategy Officer for Sun Microsystems; Marty Frederickson, former Sun Microsystems and IBM/Tivoli executive; and Michele Perry, CMO of Sourcefire.

“Zenoss has emerged as a leader in a large software segment that is ripe for disruption,” said Don Rainey, General Partner, Grotech Capital Group. “The market opportunity is compelling and Zenoss has the right team, strategy, product and presence to have a substantial impact.”

About Zenoss, Inc.

Zenoss Inc. delivers open source IT management solutions to organizations across the globe. Flagship product Zenoss Core is a complete network monitoring and systems management platform that discovers networked IT resources, monitors them for performance and availability, and tracks changes through a configuration management database (CMDB). One of the ten most active projects on SourceForge.net, Zenoss software was downloaded over 350,000 times in 2007. Recent product accolades include Network World's Clear Choice Award, Enterprise Open Source Magazine Readers' Choice Award, and a nomination for Best Technical Design in the SourceForge 2007 Community Choice Awards. Zenoss' customers include some of the world's largest corporations as well as Federal and State government agencies. Zenoss, Inc. is privately held and headquartered in Annapolis, MD. For more information, please visit www.zenoss.com.