Pegasystems Joins New IBM Initiative for Business Performance Management; Expands Pegasystems' Presence in Rules-Based BPM Market

CAMBRIDGE, Mass., March 22, 2004 — Pegasystems Inc. (NASDAQ: PEGA), a leading provider of smart, rules-based business process management software, recently announced at IBM's PartnerWorld 2004 that it has joined IBM's new Business Performance Management (BPM) Business Partner Program. The news follows closely on Pegasystems' announcement earlier this month that it has joined IBM's ISV Advantage Initiative to help deliver "smart" business process management for on-demand computing needs, and that it has entered into an agreement with IBM Business Consulting Services (BCS).

Pegasystems will complement IBM's BPM initiative by continuing to develop and enhance its rules-based solutions for key vertical markets such as financial services and healthcare. IBM's new initiative offers Business Partners a set of BPM "frameworks" for information, processes, events, business rules, and workplace and business systems. The frameworks include tools for software developers, core IBM middleware technology, and technical education and support to enable Business Partners to provide customers with solutions unique to their industry.

"BPM combines business intelligence, integration, business-service management, and intelligent orchestration — all areas where IBM has demonstrated clear technology leadership in the industry," said Marie Wieck, general manager of Industry Solutions and Business Integration, IBM. "We believe that our new BPM open standards framework and supporting partner program will help accelerate the market for these capabilities and on-demand benefit that our combined solutions can deliver. We look forward to working with Pegasystems to address the needs of our mutual customers."

"We're not just maintaining our position as a business process management leader, but extending it into new and dynamic arenas," said Alan Trefler, chairman and CEO, Pegasystems. "Not only have we recently been recognized as a leading BPM vendor by Forrester Research in their BPM TechRankings , but we are also positioned in the 'Leaders' quadrant in both Gartner Inc.'s Pure Play BPM and Business Rules Engine Magic Quadrants."

Pegasystems' smart BPM solutions leverage the company's 20 years of expertise with many of the world's largest financial services organizations, including eight of the top 15 card issuers; three-quarters of the nation's top 12 banks, such as Bank of America, Citigroup, and JP Morgan Chase; and all 12 U.S. Federal Reserve Banks. The company provides a comprehensive suite of both horizontal and vertical, industry-specific BPM applications, for full, front-to-back-office integration of critical business processes.

Pegasystems applications support a number of IBM technologies, including IBM WebSphere(1) Application Server, IBM WebSphere MQ, and IBM DB2(1) Universal Database software; and run on the Linux and AIX platforms.

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 including, without limitation, our financial guidance with respect to 2004 revenue, profit before tax, tax rate, earnings per share and cash from operating activities. The words "believe," "expect," "hope," "anticipate," "plan," and similar expressions, among others, identify forward-looking statements, which speak only as of the date the statement was made. The Company does not undertake and specifically disclaims 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 the Company's actual results to differ from those expressed in such forward-looking statements. These risks and uncertainties include volatility of our quarterly operating results, difficulty in predicting the completion of product implementations and consequently the timing of our license revenue recognition, the timing of term software license renewals, customer acceptance of our new PegaRULES Process Commander technology, our ability to develop new products and evolve existing ones, the impact on our business of the ongoing consolidation in the financial services market, historically our core market, our ability to attract and retain key employees, reliance on certain key third-party relationships, and other risks and uncertainties. Further information regarding these and other factors, which could cause the Company's actual results to differ materially from any forward-looking statements contained in this press release, is contained in the Company's most recent report on form 10-K and other recent filings on file with the Securities and Exchange Commission. The forward-looking statements contained in this press release represent the Company's views as of March 22, 2004. 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. 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 otherwise. The statements should therefore not be relied upon as representing the Company's view as of any date subsequent to the date of this release.

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

(1) Denotes a trademark of the IBM Corporation.

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

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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