China Intelligence Information Systems, Inc. Announces Strong Third Quarter Results

"We reported excellent financial and operating results in the third quarter," said Mr. Li Kunwu, President and CEO. "We saw strong demand from diverse industries for our integrated datacenter virtualization solutions and services. We're also increasingly successful in signing additional contracts with our existing clients. This growing customer base supports the rapid revenue increase and solid profit for this quarter."

Mr. Li explained further, "Starting in 2010, we focused on obtaining customers and signing virtualization solutions and services contracts in several strategic industries. We believe these are the critical components of economic growth in China. Penetrating these markets with our virtualization solutions and services is a vital execution for our business' long-term growth. We are pleased to report that we succeeded in gaining several important customers in a number of large-scale industries: healthcare, power supply, education, mining, and the government. Through our alliance program, which was launched earlier this year, we have reached our goals in the four main parts of the Southern Grid system: Guandong, Guizhou, Yunnan and Guangxi grids. To occupy the southern grid market is one of the most important steps for us in reaching our revenue and earnings targets that we set in our 2010 guidance."

The Company's leading virtualization technology solutions and services have the potential to significantly optimize traditional IT infrastructures. Just as important, they can not only help their customers reduce costs and increase energy savings, but also enhance system security. These contracts provide the Company not only with software implementation revenues, but also recurring annual technical support revenues from service contracts.

Mr. Li continued, "We are confident that we can deliver $15 million in revenue and $3.5 million in EBITDA for 2010 based on our virtualization pipelines and existing contracts. In the last couple of months, we have signed virtualization contracts with several high-caliber multinationals including Huaneng Power International Inc., CITIC Group, and China Southern Power Grid. We expect to continue to penetrate these markets and maintain our leadership position."

Mr. Li Kunwu is also pleased with the Company's operating success. He said, "In such a short period, we transformed from a VoIP service provider to a server virtualization solution and services provider. During this short period of time, we have increased our revenues significantly over the previous year and successfully penetrated most of our strategic markets. Our marketing efforts should allow us to aggressively pursue additional customers within these markets to fuel our revenue growth. More importantly, our termination of the convertible debt, a complex financial instrument, should help us to regain focus on the expansion of our virtualization and cloud computing business. We are aggressively pursuing all opportunities available to us to continue our growth objectives."

Mr. Li concluded, "We will continue to strengthen the cooperation with world-class enterprises, research institutions and universities on cloud computing and virtualization, in order to provide the best and most financially rewarding products and services to our clients. I am very pleased to announce that we have successfully won the virtualization project bid of a large-scale enterprise in China, which was highly ranked in the 2010 Global Fortune 500. We competed with several well-known global virtualization venders in the fierce competition to obtain this customer. The project will have a significant impact on our revenue and profit in next two years. This case success fully demonstrated our leading technical and service expertise in China virtualization industry. "

Technology that can benefit anyone who uses a computer

Virtualization is a technology that can benefit anyone who uses a computer, from IT professionals and Mac enthusiasts to commercial businesses and government organizations. Millions of people around the world use virtualization to save time, money and energy while achieving more with the computer hardware they already own.

Cloud computing is a general term for anything that involves delivering hosted services over the Internet. These services are broadly divided into three categories: Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS) and Software-as-a-Service (SaaS). The name cloud computing was inspired by the cloud symbol that's often used to represent the Internet in flowcharts and diagrams.

A cloud service has three distinct characteristics that differentiate it from traditional hosting. It is sold on demand, typically by the minute or the hour; it is elastic -- a user can have as much or as little of a service as they want at any given time; and the service is fully managed by the provider (the consumer needs nothing but a personal computer and Internet access). Significant innovations in virtualization and distributed computing, as well as improved access to high-speed Internet and a weak economy, have accelerated interest in cloud computing