Latest VPN Study Confirms Leading Market Position for V-ONE — First Among 19 Vendors

Business Wire, Nov 12, 1998

GERMANTOWN, Md.--(BUSINESS WIRE)--Nov. 12, 1998--

Overall Software VPN Market Compound Annual Growth Rate

for 1997-2004 Projected at 76%

V-ONE(R) Corp. (Nasdaq:VONE), the industry leader in client/server Virtual Private Network (VPN) technology, Thursday announced that the most recent data compiled by the analyst firm of Frost & Sullivan shows that V-ONE's SmartGate(R) VPN product holds a dominant market position.

The Frost & Sullivan study, titled U.S. Virtual Private Network Markets, shows V-ONE with 60% market share of the Encryption and Authentication category of the Software VPN market, first among the 19 vendors in that space.

The study forecasts years of strong growth for the overall Software VPN market, which is expected to continue expanding at a Compound Annual Growth Rate (CAGR) of 76% between 1997-2004. The total market for VPN products is expected to reach $1.26 billion by 2004.

"This study confirms what we're experiencing in the field - organizations are moving past the evaluating and testing phase to actually deploying SmartGate VPN," said David D. Dawson, chairman and CEO of V-ONE Corp. "Holding such a prominent place in the market today puts us in an excellent position to continue expanding in concert with the growing corporate and government demand for VPNs."

"This study covers only the domestic market, so it doesn't include our international successes with distributors such as Integralis and customers like Singapore Telecom," Dawson added, noting some of V-ONE's recent wins in Europe and Asia.

The study breaks the Software VPN market into two categories: Firewall VPNs, and Encryption and Authentication VPNs. Although V-ONE's SmartGate VPN works with all commercial firewall technology, it doesn't require a firewall, so it is considered an Encryption and Authentication Software VPN for purposes of the study.

Frost & Sullivan projects that the Encryption and Authentication Software VPN category will account for 72% of Software VPN revenues by the year 2004, noting, "While firewalls are traditional products, greater security offered by encryption and authentication software will likely motivate more customers to invest in the latter."

Of the 19 vendors included in the Encryption and Authentication market space, V-ONE was the dominant vendor with 60% market share, nearly three times as much as its nearest competitor. Axent Technologies (Nasdaq:AXNT) was second with 22% share, followed by Security Dynamics (Nasdaq:SDTI) with 11%.

Other vendors with less than 5% market share include: Aventail Corp., Check Point Software Technologies (Nasdaq:CHKPF), Compaq's AltaVista (NYSE:CPQ), Cyberguard (Nasdaq:CYBGE), Cylink (Nasdaq:CYLK), Data Fellows, Frontier Technologies, Information Resources Engineering (IRE) (Nasdaq:IREG), Intel Corp. (Nasdaq:INTC), Microsoft (Nasdaq:MSFT), Network Associates, Inc. (Nasdaq:NETA), Network Telesystems, Inc., Northern Telecom's Bay Networks (NYSE:NT), Secure Computing (Nasdaq:SCUR), Sun Microsystems (Nasdaq:SUNW) and TimeStep.

Another Frost & Sullivan study, U.S. Encryption Application Markets, examined the overall Software VPN market, including both Firewall-based and Encryption and Authentication VPNs. In comparing 10 major participants in the Software VPN space as a whole, Check Point was first with 30% market share, followed by V-ONE with 18%.

Both studies used the same methodology: "Primary market research is the heart of every Frost & Sullivan study ... obtain(ing) primary data directly from industry participants." Frost & Sullivan "Calculates market forecasts and market sizes by interviewing each industry competitor and deriving each company's annual shipments to - or revenues from - the defined market."

Both studies include updated information released this week. Further information on the reports is available at the Frost & Sullivan World Wide Web site at http://www.frost.com or from Frost & Sullivan's Telecommunications Industry Sales Manager, Joe Stoken, at 650/237-6511.

About V-ONE Corp.

Providing enterprise-level security products since 1993, V-ONE(R) Corp.'s flagship product is SmartGate(R), an award winning, client/server VPN technology. Major financial institutions, sensitive government agencies and large health care corporations use SmartGate for its integrated authentication, encryption and access control features.

SmartGate is ideal for establishing secure intranets to slash remote access costs and deploying secure business-to-business VPNs in extranet environments to make meaningful electronic commerce between partners a reality. V-ONE is headquartered in Germantown.

Product and security information, white papers and the company's latest news releases may be accessed via V-ONE's World Wide Web site at http://www.v-one.com.

This release, other than historical financial information, may consist of forward-looking statements that involve risks and uncertainties. These statements may differ in a material way from actual future events. For instance, factors, which could cause results to differ from future events, include rapid rates of technological change and intense competition, among others.