Zanett Federal Solutions Subsidiary Expands 'Structured' Facilities...Additional Space to Provide Increased Capacity for Defense and Classified National Security Work...


NEW YORK and AURORA, Colo., May 24, 2007 (PRIME NEWSWIRE) -- Zanett, Inc. (Nasdaq:ZANE) announced today that its Paragon Dynamics Government Solutions subsidiary has signed an agreement to increase its "structured" space, in order to expand its systems design & development capabilities. The four-fold increase in "structured" space will enable Paragon Dynamics to better serve current Federal customers, while positioning the Zanett Government Solutions segment for future growth connected with anticipated contracts centered on their specialized defense and national systems subject matter expertise in systems engineering services and solutions development.

"We have the national asset caliber talent, and relocating to a facility of this size will enable us to be more flexible and aggressive in providing these assets and capabilities in support of our customer mission," said Doug Hartmann, President of Paragon Dynamics.

The agreement illustrates how Aurora, Colorado is benefiting from the increase in the government's defense work since both 9-11 and the war in Iraq. It is paramount for government contractors like Paragon Dynamics to be in proximity to defense related activities along the Front Range.

The company is expected to move into its new space by July 2007.

NEW PLATFORM FOR FEDERAL COMMERCIAL OPPORTUNITIES

In addition to serving its national systems defense and intelligence community customers, Zanett plans to leverage the capabilities of its Commercial Solutions segment. With this expansion, the company expects to step up its pursuit of federal contracting opportunities that can utilize the Oracle enterprise resource planning and core business systems expertise of Zanett Commercial Solutions (ZCS) with the federal contracting and government customer relationships of Paragon Dynamics.

"Our increasing exposure to defense-related, transformational projects based on the Oracle platform provides a natural link between the U. S. Government and commercial Zanett businesses," said Hartmann. "This additional space will also serve us as we pursue and win these types of projects," concluded Hartmann.

Commenting on the expansion, Zanett CEO Claudio Guazzoni noted, "This expansion of our Zanett Government Solutions facilities is evidence of our continuing commitment to the growth of this market segment. It also establishes a new center for the collaborative efforts between our two operating segments that will allow us to serve the growing needs of the federal government to modernize, update and in many cases, migrate to Oracle its many business systems. With PDI's expertise in national systems engineering, federal contracting and strong relationships in the Departments of Defense, Homeland Security and Intelligence Community, and ZCS's Oracle expertise, we believe we can respond comprehensively and effectively to the significant opportunities we see with our federal customers."

About Paragon Dynamics, Inc. (www.paragondynamics.com )

Paragon Dynamics, Inc. (PDI), a wholly-owned subsidiary of Zanett, Inc. and is a Systems, Software and Analytical Engineering Services company that provides technical expertise and engineering solutions to national systems and aerospace programs. The dedicated professionals at PDI consist of highly qualified engineers with direct experience in government and commercial satellite, DoD Intelligence, and IT infrastructure programs.

Our projects -- past and present -- include: on-orbit space programs; ground based processing programs; command, control, communication and computer system development programs; and analysis, design and integration programs. The PDI staff of professional engineers, scientists, and project managers possess extensive experience in all aspects of systems development from conception to implementation of major national and international IT satellite systems. We are currently performing system engineering and integration, software development, strategic planning and program management, and mission operations and engineering tasks on several DoD Intel contracts.

We are strategically located in major defense and mission operational hubs -- Nationally and internationally -- to completely serve our customer segments.

ABOUT ZANETT (http://www.zanett.com)

Zanett is an information technology ("IT") company that provides customized, mission-critical IT solutions to Fortune 500 corporations, mid-market companies, and classified government agencies involved in Homeland Defense and Homeland Security. The Company operates in two segments: Government Solutions and Commercial Solutions. The Government Solutions segment specializes in providing advanced software and satellite engineering services with domain area expertise in the realm of classified geospatial data exploitation and representation as well as IT infrastructure related to Homeland Defense and Homeland Security.

The Commercial Solutions segment provides Management Consulting services and delivers custom business solutions that integrate and implement Oracle's full suite of product offerings -- Oracle, JD Edwards, PeopleSoft, Seibel, together with associated Oracle Fusion technologies. A wide range of delivery expertise is provided to clients, including Managed Services, Business Intelligence, Web and Portal Development, and Middleware Technologies.

Zanett also provides full infrastructure and application hosting, utilizing both local resources and international resources, remote and onsite DBA support, all on a 24x7 basis.

Zanett currently employs over 232 people nationwide, is headquartered in New York City, and operates out of 9 offices (Atlanta, Boston, Cincinnati, Detroit, Indianapolis, Jacksonville, New York City, Philippines, and Denver). Founded in 2000, Zanett is listed on the NASDAQ Capital Market under the symbol ZANE.

DISCLAIMER AND FORWARD-LOOKING STATEMENTS

(PLEASE READ THE FOLLOWING 3 PARAGRAPHS CAREFULLY)

Certain statements in this news release regarding projected results of operations or, projected results of financial plans or future strategies and initiatives, including, but not limited to, projections of revenue, projections of profitability, any and all future expectation, and plans for future activities may and should be regarded as "forward-looking statements" within the meaning of the Securities Litigation Reform Act. These statements involve, among other things, known and unknown risks, uncertainties and other factors that may cause Zanett, Inc.'s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Zanett currently is considering, but in reality may or may not in the future implement any or all of the items and issues listed in any planned budget or strategic initiative, due to, among other things, known and unknown risks, uncertainties and other factors.

Circumstances do change, and if and when the landscape changes, Zanett shall endeavor to remain as flexible as possible, and adjust its strategy accordingly. Zanett, Inc. undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, change in strategy, or otherwise. The above mentioned listing of risks and uncertainties is not inclusive. For a more detailed discussion of some, but not all, of the risks and uncertainties that may affect Zanett, Inc., see Zanett, Inc.'s filing with the Securities and Exchange Commission, including its Annual Report on Form 10-K, for the fiscal year ended December 31, 2006 and its Quarterly Report on Form 10-Q for the quarter ended March 31st 2007.

Neither Zanett, Inc. nor Zanett Oracle Solutions is a part of, a division of, nor a subsidiary of, nor in any other manner connected with, Oracle Corporation, and no implication is made what-so-ever to suggest as such.



            

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