Lancope® PRESS RELEASE

Lancope Accelerates Growth and Leadership
with Record 2004 Performance

StealthWatch’s Accuracy, Performance and Scalability Solidify Technology Leadership, Secure 50 New Customers and Achieve Industry Awards and Recognition

ATLANTA, JANUARY 26, 2005 - Lancope, Inc., the leading provider of network behavior anomaly detection (NBAD) solutions, today announced record performance in 2004, driven by its strong sales growth, key competitive wins and several industry awards recognizing the outstanding technology of its StealthWatch™ System. The year was marked by the addition of 50 new enterprise customers who selected Lancope to defend their internal networks against zero-day attacks, misuse and security exposures. Other highlights of Lancope’s 2004 performance include:

  • 600 percent increase in quarterly revenue run-rate from 2003 through 2004
  • 100 percent enterprise customer retention
  • 167 percent growth in partner business
  • 66 percent revenue growth from new customers
  • Launch of StealthWatch Xe, the first successful commercially available Netflow-based security product

Solidifying Lancope’s leadership of the NBAD market, Lancope increased its customer base by 50 percent and grew quarterly revenues as high as 133 percent over the same quarter of the previous year. Due to new and current customer deployments of StealthWatch in record numbers throughout 2004, Lancope now protects 15 million hosts worldwide.

"Lancope closed a record number of large enterprise deals during 2004 and gained significant momentum in the market," said Harland LaVigne, chairman, president and CEO of Lancope. "StealthWatch’s ability to demonstrate 300% Return-On-Investment is a driving force in our success. Our focus on protecting enterprises against zero-day, hidden and unknown threats continues to gain traction as more and more customers turn to Lancope to overcome challenges associated with traditional network security approaches."

LaVigne added,"Increasingly the industry is recognizing StealthWatch’s ability to act as the eyes and ears of the network and to provide customers with previously unavailable network visibility and contextual awareness. The launch of StealthWatch Xe, with native Netflow compatibility with Cisco®, Juniper® and Foundry® enterprise networking infrastructures, not only accelerates customer deployments and performance, but also significantly increases our price performance versus our competition. We look forward to another record 2005."

2004 Highlights
New Customers, Competitive Wins

Lancope secured 50 new customers in 2004 across a variety of industry verticals, including the Federal Government, Financial Services, Healthcare, Higher Education, Manufacturing and Energy. Among Lancope’s key competitive and customers wins were several agencies within the U.S. Departments of Defense and Energy, a Fortune 100 consumer food products company, a Fortune 150 property and casualty insurance company, a Fortune 300 commercial bank, a $10B private utility, a $4.4B hotel resort&casino, a $2.5B telecom, one of the leading semiconductor manufacturers and Dartmouth College.

Winning Product Reviews and Recognition

Throughout 2004, StealthWatch earned top honors from numerous stand-alone and competitive product reviews. Kicking off the year, StealthWatch was named a finalist for Network Computing’s 2004 Well-Connected Awards. In June, Computer Reseller News awarded StealthWatch 5-stars for superior technology. In August, InfoWorld featured StealthWatch in a cover story on intrusion detection systems and named it "first choice" over competitive solutions from Arbor Networks and Snort. The same week, eWeek awarded StealthWatch highest honors for Security and Capabilities. Gartner also recognized Lancope as the Visionary with the greatest Ability to Execute in its Magic Quadrant for the Intrusion Detection System (IDS) market. Most recently, InfoWorld named StealthWatch 2005 Technology of the Year for Best Network IDS.

Industry Partnerships and Certifications

In 2004, StealthWatch and StealthWatch+Therminator™ (SW+T) achieved the prestigious Common Criteria Evaluation Assurance Level 2 (EAL2) certification, successfully completing an extensive, rigorous testing process and conform to standards sanctioned by the International Standards Organization. Additionally, Lancope secured OPSEC™ (Open Platform for Security) certification from Check Point Software Technologies Ltd. (NASDAQ: CHKP) in order to significantly improve network availability and reduce remediation efforts for StealthWatch customers. Lancope also announced technology partnerships with leading Security Incident Management (SIM) vendors, such as GuardedNet.

About StealthWatch System
The StealthWatch System, which includes StealthWatch, StealthWatch Xe, SW+T and StealthWatch Management Console™, is the leading NBAD system that defends internal networks against zero-day attacks, internal misuse, and unnecessary network exposures. Expanding beyond the capabilities of traditional network security products, StealthWatch collects, categorizes and analyzes network traffic to create comprehensive security intelligence at both network and host levels. Providing a cost-effective, single point of reference for optimizing security and network operations, StealthWatch enables organizations to improve the network health and security posture of their networks.

About Lancope
Lancope is the leading provider of network behavior anomaly detection solutions that defeat Zero-day worms, internal network misuse and other anomalies that compromise network integrity. Lancope’s StealthWatch integrates security and network management technology to reduce network risks and maximize network availability by rapidly identifying, prioritizing, mitigating and resolving critical threats, whether new or well-known. Both OPSEC and Common Criteria certified, StealthWatch was named a finalist in Network Computing Magazine’s 2004 Well Connected Awards and has received outstanding reviews from InfoWorld, eWeek and CRN magazines. Defending the networks of Global 2000 organizations, academic institutions and government entities, Lancope’s StealthWatch protects over 100 enterprise customers and 12 million hosts worldwide. Lancope is a privately held, venture-backed company headquartered in Atlanta, Georgia. For more information, visit www.lancope.com.