Press Release: Record Orders in 2004

PGP CORPORATION ANNOUNCES RECORD ORDERS IN 2004 AND CONTINUES ENCRYPTION LEADERSHIP IN FORTUNE 100

Enterprise Adoption, Industry Recognition, Technology Partnerships, Channel Expansion, and Product Innovations Highlight 2004 and early 2005

Palo Alto, CA/01 March, 2005 – PGP Corporation, a global leader in enterprise encryption solutions, today announced record orders for its award-winning encryption solutions in calendar year 2004, further solidifying its position as the encryption market leader.

"2004 was the most successful fiscal year in the 10-year history of commercial PGP products," said Alex Doll, PGP Corporation's CFO and vice president of business development. "In addition, we have made the proper long-term investments in 2004 to position ourselves for continued growth in 2005 and beyond. In 2004, we doubled our headcount, accelerated our infrastructure and operations investments, expanded the size of our California headquarters, opened a new facility in Utah, grew our European infrastructure, and significantly increased our engineering resources and expertise--all while producing a positive cash flow for the year."

"Analysts, the media, and our customers have all voted for PGP Corporation," said Phillip Dunkelberger, president and CEO. "Throughout 2004 and early 2005, our company was repeatedly recognized as an innovator by major industry associations and publications. Most important, customers recognized the value of our solutions and the need for pervasive encryption by increasing the size and type of PGP deployments. We continued to enhance our encryption suite through new enterprise technology partnerships with leaders in the messaging gateway, content filtering, and instant messaging security market segments. Our FIPS 140-2 validation and newly issued patents further demonstrated our technology expertise. We also expanded our channel organization as well as our global presence, giving us the broadest reach of any company in our sector."

Enterprise Adoption
The fourth quarter of 2004 was the best quarter in PGP Corporation's history. In 2004, major accounts was the fastest-growing segment of PGP business, with enterprise customers representing nearly half of all orders. More than 90% of the Fortune® 100 and 74% of the Forbes® International 100 use PGP products. Sales were led by PGP Universal, the automatic, network-based encryption solution designed specifically for enterprise markets. The company believes much of its success in 2005 will come from continued acceptance of encryption solutions by large enterprises and their business partners and customers. Business partners increasingly require companies to standardize on PGP solutions to ensure interoperability-- without the need to purchase additional, non-proprietary solutions--and to meet customer demands to secure social security numbers, financial information, health records, and other personal information. Business partners also want to do business with a global company. PGP Corporation currently has customers in more than 90 countries that benefit from its established global sales teams, reseller network, and support infrastructure.

Regulatory requirements for securing confidential and personal information in transit via email, across the Internet, and in storage continue to drive the need for encryption throughout the extended organization. "Enterprises are turning to us for help in addressing their compliance issues as well as a variety of supply-chain and customer requirements," added Mr. Dunkelberger. "They have discovered that VPNs, hosted systems, and even SSL/SSH are not secure enough to meet their needs. Instead, they want to purchase solutions from a company with a history of securing mission-critical data for global enterprises."

PGP Corporation's ongoing dialog with customers has allowed the company to develop the broadest integrated encryption suite in the industry. The PGP encryption product suite includes network (PGP Universal), desktop (PGP® Desktop), FTP/batch transfer (PGP® Command Line), and SDK solutions. With more than a decade of experience solving real-world security problems, PGP Corporation has both an enviable track record and a growing list of global enterprise users.

Industry Recognition
PGP Universal continued to garner broad industry recognition. In addition to being named Best Encryption Solution by SC Magazine, the innovative encryption solution was a finalist in both the Information Security Product and Product of the Year categories of Europe's influential Information Management Awards. PGP Universal was also named a Best Open Source Product or Service 2005 Codie Awards finalist by the Software & Information Industry Association (SIIA).

In addition, PGP Corporation joined Computer Associates, McAfee, Qualys, RSA Security, Symantec, and Trend Micro as a finalist in the coveted Best Security Company category of the SC Magazine Awards. PGP Corporation was also selected for inclusion in the AlwaysOn (AO) Top 100 Private Companies List for the second consecutive year.

Technology Partnerships
PGP Corporation continued to expand its Alliance Program during the year with new technology partners Clearswift Ltd., IMlogic Inc., IronPort Systems Inc., MailFrontier Inc., Mirapoint Inc., Proofpoint Inc., Research in Motion Ltd., Sendmail Inc., and Vontu Inc. PGP Corporation's enterprise-ready encryption solution, PGP Universal, features two-way, policy-based security that provides a significant competitive advantage to its partners. "There's great value in partnering with another best-in-class provider to create a joint solution that meets a broader range of messaging security needs," said Anne Bonaparte, president and CEO of MailFrontier.

According to the META Group, merging encryption and digital signature technology with gateway email hygiene deployments increases email security without placing further burdens on users, while minimizing IT involvement. "With PGP Universal, we now provide enterprise customers a complete solution that combines encryption with our industry-leading MTA platform, policy enforcement, and preventive and reactive security measures, including sender reputation, virus outbreaks, spam blocking and virus detection," confirmed Tom Gillis, senior vice president worldwide marketing at IronPort™ Systems.

In 2004, PGP Corporation formed an alliance with Research in Motion (RIM) that will expand existing compatibility between PGP Universal and BlackBerry Enterprise Server™. The companies are working together to provide seamless integration for customers deploying both enterprise-wide PGP Universal email security and the BlackBerry® wireless platform. "The alliance with RIM reflects our commitment to support all protocols, email standards, and platforms required to achieve universal enterprise email security and policy compliance," said PGP President and CEO Phillip Dunkelberger.

Technology Leadership & Innovation
PGP Corporation continues to set the standard for technology leadership in security. In 2004, the PGP Software Developer Kit (SDK) received Federal Information Processing Standards (FIPS) 140-2 Level 1 validation by the National Institute of Standards and Technology (NIST). PGP Corporation's email encryption technology supports both of the two email-related encryption standards recommended by NIST under in its "Guidelines on Electronic Mail Security."

"The return of PGP Corporation and PGP products has invigorated the encryption market," said Richard Clarke, former National Coordinator for Security and Counterterrorism and Special Advisor to the President for Cyber Security, and currently Chairman of Good Harbor Consulting. "Not only has the company validated the widespread need for encryption in an increasingly insecure world, but its success confirms the value of its solutions."

All PGP products are architected to allow for rapid and non-disruptive migration of all encryption, hash, compression, and signature algorithms. When researchers recently revealed that a flaw in a hash algorithm that supports the digital signatures used in popular SSL browser security and encryption could enable a theoretical attack, PGP Corporation was already in the process of migrating to stronger algorithms and a broader range of authentication options. These new capabilities will be delivered in the upcoming releases of PGP Desktop and PGP Universal.

PGP Corporation's technology innovation has also been recognized by two additional technology patents. The first patent (patent number 6,662,299), granted in June 2004, addresses a longstanding issue in public key encryption: how to handle lost passphrases. The second patent (patent number 6,851,049), granted in February 2005, covers various methods to increase message anonymity. PGP Corporation currently has more than a dozen issued and pending patents.

PGP Corporation is committed to standards-based, nonproprietary technologies, ensuring wide compatibility among deployments. Although a number of other email security vendors have promised support for PGP encryption as well as X.509 + S/MIME in future releases, all existing PGP products already employ these open standards for public key formats as well as OpenPGP (RFC 2440).

PGP Corporation continues to lead the industry by developing innovative products. PGP Universal was designed from the outset to provide easy implementation, integration, and interoperation with existing security solutions, mail systems, and network infrastructures. Features such as auto-enrollment of users and secure delivery for recipients without an encryption solution continue to set the benchmark for email security. Its unique proxy architecture provides security without plug-ins, thereby minimizing user training and software maintenance costs, and also delivers an approach for extending that protection beyond email.

Channel Expansion
PGP Corporation's 2-year-old Channel Program now includes 150 partners from 37 countries. The company supports its premier resellers with a wide range of training, sales tools, technical expertise, and cross-selling opportunities. "We"re very particular about the companies with which we partner," said John Freres, president and CEO of Meridian IT Solutions. "We"re continually approached by technology vendors wanting to do business together, but after 6-12 months go by, we often have nothing to show for the partnership."

"In comparison, PGP Corporation focuses on finding 'star" partners and then invests the resources needed to make them successful," continued Freres. "Together, we"ve been able to generate hundreds of thousands of dollars in opportunities within our existing accounts as well as break into new accounts in industries ranging from banking and finance to education."

According to Freres, information security and regulatory compliance are foremost in the minds of the business community today. "Our relationship with PGP Corporation enables us to offer strong information security solutions that help customers leverage technology for greater compliance and at the same time enhances our business. Plus, because of its products" architectural flexibility and the number of premier technology companies with which PGP Corporation partners, PGP encryption solutions fit easily into most environments."

About PGP Corporation
Recognized worldwide as a leader in enterprise encryption technology, PGP Corporation develops, markets, and supports products used by more than 30,000 enterprises, businesses, and governments worldwide, including 90% of the Fortune 100 and 75% of the Forbes International 100. PGP products are also used by thousands of individuals and cryptography experts to secure proprietary and confidential information.

During the past ten years, PGP® technology has earned a global reputation for standards-based, trusted security products. It is the only commercial security vendor to publish source code for peer review. The unique PGP encryption product suite includes PGP Universal—an automatic, self-managing, network-based solution for enterprises—as well as desktop, mobile, FTP/batch transfer, and SDK solutions. Contact PGP Corporation at www.pgp.com or +1 650 319 9000.

Legal Notice Regarding Forward-Looking Statements
Some of the statements in this press release are forward-looking, including the statements regarding the availability, plans, delivery, goals, development, expected features, expected benefits and competitive position of PGP products, including PGP Universal, PGP Corporate Desktop, PGP Workgroup Desktop, PGP Personal Desktop, PGP Mobile, and PGP SDK; and other PGP products implementing or leveraging the PGP technologies. All references made to product feature enhancements, improvements in platform support or additional functionality are subject to change at solely PGP Corporation's discretion. All future descriptions of PGP technology and products are subject to availability only if PGP Corporation decides to build them and when PGP Corporation decides to make them commercially available. Actual results could differ materially from those expressed in any forward-looking statements. Risks and uncertainties that PGP Corporation faces that could cause results to differ materially include risks associated with any unforeseen technical difficulties or software errors related to the final development and launch of any of PGP Corporation's products; any technological or standards changes in the security, encryption and authentications market which could make PGP Corporation's products less competitive or require feature changes in these products; any slowdown in the adoption by businesses of encryption suites, secure email, Internet technologies or related standard. The forward-looking statements contained in this release are made as of the date hereof, and PGP Corporation does not assume any obligation to update such statements nor the reasons why actual results could differ materially from those projected in such statements.

PGP is a registered trademark and the PGP logo is a trademark of PGP Corporation. Product and brand names used in the document may be trademarks or registered trademarks of their respective owners. Any such trademarks or registered trademarks are the sole property of their respective owners.