eLoyalty Joins Pegasystems Alliance Program; eLoyalty to Design and Implement Customer Loyalty Solutions Based on PegaRULES Process Commander

CAMBRIDGE, Mass. & LAKE FOREST, Ill., Mar 3, 2003 — Pegasystems Inc. (NASDAQ: PEGA), a provider of smart business process management (BPM) software, today announced that it has signed eLoyalty, a leading enterprise CRM services and solutions company (NASDAQ: ELOY), as a Services Partner to support the sale and implementation of PegaRULES Process Commander. Under the terms of the agreement, both companies will participate in joint sales and marketing initiatives focused on providing PegaRULES Process Commander solutions. eLoyalty will design and implement client specific customer loyalty solutions using PegaRULES Process Commander. Currently, both organizations are working to deliver rules-based, customer service solution to one of the nation's largest publicly held financial services companies.

With deep expertise in customer service and marketing, eLoyalty helps clients develop and implement leading-edge customer relationship management capabilities. eLoyalty's Loyalty Value Analytics (LVA) methodology enables clients to quantify, prioritize and track the economic impact of a company's customer management initiatives across the enterprise. Using its LVA methodology, eLoyalty can quantify the impact that rules-driven BPM will provide for a client.

"Thanks to our partnership with eLoyalty, our alliance program is gaining significant momentum," said Paul McNulty, vice president, PegaRULES, Pegasystems. "eLoyalty has both the depth of experience and knowledge in BPM and Java-based technology to quickly implement our rules-driven BPM software for our joint customers, for their ultimate gain."

"Effective implementation of business rules is critical to creating value from customer initiatives. Pegasystems' technology will help our clients ensure that they are managing each customer interaction in the manner they desire to optimize their relationship," said Jay Istvan, vice president of Strategy and Marketing for eLoyalty. "Furthermore, Pegasystems' rules technology allows customers to rapidly respond to changes in business demands, which will give our customers added agility."

Pegasystems' has built an extensive Alliance Program, comprised of three types of partnership: Services Partners, Solution Partners, and Technology Partners. Services Partners are system integrators and consultants that scope, design, build, deploy, and/or manage client specific Pegasystems-based implementations. Solution Partners are software development companies that develop repeatable market-specific solutions, based on a combination of partner and Pegasystems technology. Technology Partners are companies that interact with, complement, or add value to Pegasystems technology.

PegaRULES Process Commander enables companies to develop, implement and manage a horizontal set of BPM solutions. It combines a patented enterprise rules engine with application tools designed for developing, deploying, managing and evolving enterprise-wide business processes.

About eLoyalty

eLoyalty is a leading management consulting, systems integration and managed services company focused on optimizing customer interactions. With professionals in offices throughout North America and Europe, eLoyalty's broad range of enterprise Customer Relationship Management (CRM) related services and solutions include creating customer strategies; defining technical architectures; selecting, implementing and integrating best-of-breed CRM software applications; and providing ongoing support for multivendor systems. The combination of eLoyalty's methodologies and technical expertise enables eLoyalty to deliver the tangible economic benefits of customer loyalty for its Global 2000 clients. For more information about eLoyalty, visit www.eloyalty.com or call 877-2ELOYAL.

Forward-Looking Statements

Certain statements contained in this press release may be construed as "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. The words "believe," "expect," "hope," "anticipate," "plan" and similar expressions identify forward-looking statements, which speak only as of the date the statement was made. Pegasystems and eLoyalty do not undertake and specifically disclaim any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These statements are based on current expectations and assumptions and involve various risks and uncertainties, which could cause either company's actual results to differ from those expressed in such forward-looking statements. These risks and uncertainties include impact of pending regulatory proceedings, difficulty in predicting the completion of product implementations and/or services engagements and consequently the timing of revenue recognition, the inability to attract and retain key employees, reliance on key third-party relationships, management of growth, and other risks and uncertainties. Further information regarding these and other factors which could cause either company's actual results to differ materially from any forward-looking statements contained in this press release are contained; with respect to Pegasystems, most recent report on Form 10-Q or 10-K on file with the SEC and other recent filings on file with the Securities and Exchange Commission; in respect to eLoyalty, its recent SEC filings, including, without limitation, its most recent annual report on Form 10-K and quarterly reports on Form 10-Q, as well as those identified under "Risk Factors" in the Registration Statement on Form S-3 filed on September 24, 2002. Investors are cautioned not to place undue reliance on such forward-looking statements and there are no assurances that the matters contained in such statements will be achieved. The forward-looking statements contained in this press release represent the Company's views as of March 3, 2003. Although subsequent events may cause the Company's view to change, the Company does not undertake and specifically disclaims any obligation to publicly update or revise these forward-looking statements whether as the result of new information, future events or other wise. The statements should therefore not be relied upon as representing the Company's view as of any date subsequent to March 3, 2003.

NOTE: Pegasystems is a registered trademark of Pegasystems Inc. Other product and company names may be trademarks of their respective owners.

About Pegasystems

Pegasystems (NASDAQ: PEGA) develops strategic applications for marketing, sales, service, and operations. Pega’s applications streamline critical business operations, connect enterprises to their customers seamlessly in real-time across channels, and adapt to meet rapidly changing requirements. Pega’s Global 3000 customers include many of the world’s most sophisticated and successful enterprises. Pega’s applications, available in the cloud or on-premises, are built on its unified Pega 7 platform, which uses visual tools to easily extend and change applications to meet clients’ strategic business needs. Pega’s clients report that Pega gives them the fastest time to value, extremely rapid deployment, efficient re-use, and global scale. For more information, please visit us at www.pega.com.

All trademarks are the property of their respective owners.

The information contained in this press release is not a commitment, promise, or legal obligation to deliver any material, code or functionality. The development, release and timing of any features or functionality described remains at the sole discretion of Pegasystems, Pegasystems specifically disclaims any liability with respect to this information.


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