"Byte" Magazine Highlights the Smart Card and "ASE" -- the Aladdin Smartcard Environment -- as One of 1998's Top Technologies.

TEL AVIV, Israel and NEW YORK--(BUSINESS WIRE)--Jan. 5, 1998--

Predicts "Smartcard Invasion" of the USA

and Names ASE as a Leading Development Platform

Aladdin Knowledge Systems Ltd. (NASDAQ: ALDNF, www.aks.com), a global leader in information security and licensing, announced today that ASE(R) -- The Aladdin Smartcard Environment -- has been singled out in Byte Magazine's key January feature, "1998's Top 25 Technologies."

In a feature entitled "The Smartcard Invasion," Byte predicts that the United States is about to be "hit" by the "ubiquitous" smartcard, at last catching up with Europe where they have been in use in for over a decade.

Byte highlighted Aladdin's ASE development platform as part of the Smart Card Forum, the industry's consortium which includes major card producers Schlumberger and Gemplus. The Smart Card Forum also includes Microsoft, who have approved Aladdin's technology as a development partner for PC/SC, the interoperability standard for PC-based smart card applications.

"Smartcard technology has been singled out as a mainstream technology in the USA, and we are pleased our pioneering role in the development of easy-to-use tools for smart card applications has once again been recognized," says Aladdin's Director of Smart Cards, Eyal Manger. "The response to our launch of ASE-II in November has been very encouraging. The market is ready for PC-based smart card applications, and so are we!"

Aladdin's ASE II is invaluable for designers of virtually all kinds of smart card applications and Internet-based commerce. Successful applications developed and deployed with the first generation of ASE products include access control, prepayment vending systems, authentication, digital signature, health care, electronic purse, biometric recognition systems and software distribution. Further details of such applications can be seen on Aladdin's Web site -- www.aks.com.

The key components of ASE II are:

- ASEDrive Pro, the most versatile PC-based smart card drive on the

market with highly secure architecture supporting industry

standards, internal and external connection interfaces and various

power options. Other new features include support for additional

memory card protocols, optional real-time clock for time

signatures, and a new ergonomic design.

- ASESoft, the smart software environment is PC/SC compliant.

ASESoft offers same host multi-drive and multi-application support,

asynchronous tracking of reader/drive events, a comprehensive

library of administrative, diagnostic and script tools as well as

card editing utilities. ASESoft is designed so that even a

relatively inexperienced programmer can easily develop applications

and bring them rapidly to the market.

- ASECards include memory, protected memory, CPU and cryptographic

cards, all of which can be accessed via a single base Application

Programming Interface (API). This facilitates the easy integration

of various card types into user applications.

Aladdin Knowledge Systems is a global leader in the secure licensing, management and distribution of digital content. Aladdin's product range includes HASP(R) and Hardlock(R), key-based software security systems which monitor software licensing and prevent unauthorized use of computer programs; Privilege(TM), a suite of software licensing and metering tools for developers and corporate IT managers; and ASE(R) -- The Aladdin Smartcard Environment -- a set of smart card application development tools for integrating smart cards with PCs. Aladdin is an ISO 9002 accredited company with headquarters in Tel Aviv, Israel, 5 international offices and distributors in more than 40 countries, serving over 20,000 clients worldwide. For more information, visit the Aladdin home page at http://www.aks.com.

CONTACT: Aladdin Knowledge Systems Inc. (USA)

Tom Crowley - ASE Marketing Manager

Phone [phone]

Fax [phone]

E-mail [e-mail]

or

Ruder Finn Inc.

Dov Smith

Phone [phone]

Fax [phone]

E-mail [e-mail]

or

Aladdin Knowledge Systems Ltd. (Int'l)

Lisa Appelson - Marketing Communications Manager

Phone [phone]

Fax [phone]

E-mail [e-mail]