Leading Market Research Firm Names Watchfire Worldwide Market Share Leader for Second Year Running in Application Vulnerability Assessment Market

Waltham, MA - 16 January 2007

Watchfire's AppScan® Web Application Security Testing Solutions Tops Application Vulnerability Assessment Software Category with the Highest Growth Rate of All Other Vendors in the Category

Building upon another successful year of market leadership and product innovation in 2006, Watchfire is pleased to announce that it has been named the worldwide market share leader in the application vulnerability assessment software category for the second year in a row by leading IT market research and advisory firm IDC. According to the most recent Worldwide Security and Vulnerability Management (SVM) software report[1], Watchfire is not only the top company in the application vulnerability assessment market once again, but the Company has taken market share away from its competition to secure a larger piece of the global market.

In this report, IDC projects worldwide revenue for the SVM software market to reach $3.4 billion in 2010. With a 27.8 percent worldwide market share (increased from 26.7 percent in last year's IDC numbers), Watchfire tops the application vulnerability assessment software sub-category for the second year in a row, further widening the market share gap between its closest competitor by 35 percent. Watchfire was again in the top 10 overall worldwide vulnerability assessment software revenue rankings by vendor, ranking fifth globally overall. Watchfire was also the only application vulnerability assessment vendor to make the top five in the entire vulnerability assessment category. The report shows Watchfire well positioned for the future, commanding the market share lead of the fastest growing segment of the entire SVM marketplace-with application vulnerability assessment projected to increase at a compound annual growth rate of 33 percent through 2010.

Being named as the worldwide market leader in the application vulnerability assessment software category continues the trend of recent industry achievements for Watchfire and its security products:

· Finalist in five categories for the pending 2007 SC Magazine Awards including the Best Security Company--more finalist honors than any other vulnerability assessment company

· Named to Financial IT Security Magazine's "Future Now" list as one of the top 25 innovations of 2007

· "Top Pick" for 2007 in ITDefense Product Directory

· Finalist in Software Test and Performance Testers Choice Awards

· Addition of hundreds of security customers in 2006 ranging from VW Credit to the Department of Veterans Affairs

· Expanded international presence with new offices opened in Dublin and Singapore to support and service EMEA and Asia-Pacific regions

· Recognition from the top two industry analyst firms of Watchfire as the Web Application Security market share leader (more than twice the market share of any competitor in the global application security vulnerability scanning market)

"Watchfire's continued dominance in the web application security market is further validation that our solutions are helping customers efficiently find and fix real security issues. It is no longer enough to simply identify security vulnerabilities. Organizations need help operationalizing web application security," said Peter McKay, president and CEO, Watchfire. "Our ten-plus years of technology innovation and continued market leadership position combined with our extensive client expertise are further validation that this is the right approach and we would like to thank our customers for helping us maintain and grow our global leadership position."

"Government regulations, improved hacker exploits, and new technologies continue to drive the need for web application security vulnerability testing. However, identifying and resolving application-level threats remains difficult. In response to the need, there is significant growth in the applications security market segment. Over the next five years, we expect web applications software to grow faster than any other applications security sub-market," said Charles Kolodgy, research director for Security Products at IDC. "Currently, Watchfire is well positioned as the market share leader in the web application security software sub-market. Recent product announcements show that Watchfire understands that security and vulnerability management products must respond to negative events while supporting a more aggressive, positive security model."

Watchfire provides web application security testing throughout the development lifecycle, easing unit testing and security assurance early in the development stage. Specific Watchfire web application security solutions in this market segment include:

AppScan: the only solution to provide comprehensive remediation tasks at every level of the application. AppScan scans web applications within the infrastructure, tests for security issues and provides actionable reports and fix recommendations. AppScan 7.0 features even more advanced application vulnerability scanning and automation of more testing processes, for penetration testers and security professionals including the industry's only privilege escalation feature. It also helps businesses understand and act upon the web security vulnerabilities found-simplifying the remediation process for developers with little or no security expertise.

AppScan Reporting Console: a powerful web-based management and reporting dashboard that can be used to provide company-wide visibility and manage multiple desktop versions of AppScan as a cost-effective means to establish process and manage security across the SDLC (Software Development Lifecycle).

AppScan Enterprise: the industry's first enterprise-class web application security platform incorporates sophisticated security algorithms from the AppScan technology and combines them with the enterprise scanning, reporting, dashboarding and trending capabilities in a web-based environment to help enable companies to scale application security testing throughout the SDLC.

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