Watchfire Solidifies Leadership in Web Application Security and Online Risk Market

Business Wire, Feb 1, 2006

WALTHAM, Mass. -- 2005 Highlighted by Industry Analyst Recognition, Strategic Acquisitions, Significant Enterprise Customer Wins, Customer Retention, Prestigious Awards and Increased Web Application Security Market Share

Watchfire, the leading provider of Online Risk Management software and services to help ensure the security and compliance of websites, today announced another solid year of growth. Highlighted by a successful acquisition, product releases, prestigious industry awards and high-profile customer wins, 2005 strengthened the company's leadership position in the web application security and online risk market.

Watchfire added more than 170 customers, including HSBC, Albertsons, Nike, U.S. Army, U.S. Air Force Academy, Vodafone and Weight Watchers, while maintaining renewal rates of over 95 percent. Enterprises use the company's solutions to minimize online risk, help ensure web application security and assist with compliance with privacy policies and global legislation for a range of industries, including financial services, government, manufacturing and technology. Watchfire now counts nine of the top 10 banks, seven of the world's 10 largest pharmaceutical companies, eight of the world's 10 largest technology companies and seven of the world's most valuable global brands as customers.

Watchfire also added many of the biggest federal agencies as customers including U.S. Department of Health and Human Services, Social Security Administration, Office of Personnel Management, U.S. Department of the Interior, National Park Service, U.S. Air Force, U.S. Navy, U.S. Coast Guard, U.S. Army, Defense Intelligence Agency, U.S. Department of Transportation, Federal Motor Carrier Safety Administration and the Federal Communications Commission (FCC).

In 2005, the company was notified of its placement as the worldwide market share leader in the web application vulnerability assessment software category in the most recent Worldwide Security and Vulnerability Management (SVM) software report by leading IT market research and advisory firm, IDC.(1)

Also in 2005, Watchfire was the recipient of several industry honors. Watchfire's WebXM(TM) was awarded the prestigious HP/IAPP Privacy Innovation Award for providing quantifiable value and innovative privacy technology resulting in more effective business processes and improving online customer trust and experience. Watchfire's leading web application security testing solution, AppScan(R), was selected as a finalist in two separate categories for SC Magazine's Excellence Awards -- Best Enterprise and Best SME Security Solution -- in addition to being a finalist in Software Test & Performance magazine's Testers Choice Award. Additionally, Computer Reseller News bestowed AppScan 6.0 a "Recommended" rating following a comprehensive evaluation.

In 2005, Watchfire acquired COAST Software, provider of online quality and privacy compliance software. This acquisition brought important global enterprise customers to Watchfire, and the acquired assets aligned strategically with the Company's focus on federal government agencies, particularly the U.S. Department of Defense.

In 2005, Watchfire released new versions of its WebXM(TM) platform, AppScan(R) 6.0 and AppScan for Mercury Quality Center(TM). The company also introduced a new Banking Compliance module to meet the unique regulatory compliance needs of the banking industry and an Intranet solution designed to monitor and report on issues impacting employee productivity, risk, compliance and cost containment on today's complex corporate intranets.

2005 featured a number of additional and important achievements that helped position Watchfire as a market leader:

--International Expansion- Watchfire opened a wholly-owned Japanese subsidiary in Tokyo bringing sales and services support for Watchfire's customers and partners located in the region, and is indicative of the growing international demand for web application security and compliance.

--New Partners- Watchfire introduced a web application security partner program and signed 14 new global resellers, solution providers and technology partners including SiegeWorks, Fujitsu Korea, Mandiant, Stalwart, IBM Global Services, Sapient and Ostfold Software. The company also expanded its technology partnerships with Mercury, F5 and Microsoft.

--Security Zone Website-Watchfire launched a new website designed to serve as a single destination for targeted web application security resources.

"The success of the past year reflects the strength of Watchfire's vision, ability to execute and the increasing market demand for solutions that help organizations solve the critical business problems that impact their bottom line," said Peter McKay, president and CEO. "The results of 2005 highlight the strength of our business model, which has enabled Watchfire to leverage current market trends, our market-leading technology and industry partnerships to deliver consistent growth and leadership in the web application security and online risk market."