ALADDIN KNOWLEDGE SYSTEMS LAUNCHES PRIVILEGE 6.1.

Aladdin Knowledge Systems Ltd. (NASDAQ:ALDN) has launched Privilege 6.1, the latest version of its electronic software distribution (ESD) platform that offers publishers unmatched security, reduced development costs and the flexibility to effectively and efficiently manage all aspects of software marketing and sales online.

According to a recent IDC forecast, electronic software commerce spending will grow at a compound annual growth rate of more than 30% by 2006, reaching well-past $22 billion that year. Privilege 6.1's flexible architecture means publishers can capitalize on the market's potential with the freedom to define all elements of the purchase, download, and license environment to ensure revenue streams and the best possible customer purchase experience. Privilege 6.1 also energizes physical distribution channels with versatile software activation features (introduced with version 6.0) that allow publishers to develop flexible, customer-friendly licensing schemes and fresh marketing models that resonate powerfully with software consumers.

"Software distribution is moving out of the shrink-wrapped box. Whether you are selling software B2B or B2C, on-line or off-line, our new technology provides strategic options for securing, marketing, and controlling the purchase of software," says Yanki Margalit, CEO of Aladdin Knowledge Systems. "Privilege 6.1 gives software publishers the flexibility to sell everything from high-end accounting applications to the latest first-person shooter games through the channels of their choice. They can even safely leverage peer-to-peer networks with our technology."

Proven Features Enhance Revenue Potential, Deliver Customer Value

Privilege 6.1 builds on Aladdin's 18 years of software protection experience and market-proven anti-piracy technology by providing the software developers with an array of efficient, performance-oriented features that create, maintain, and preserve revenue streams, reduce development and operational costs, and contribute to end-user value:

-- Secure Distribution, Flexible Licensing - Privilege enables secure distribution without constraining license flexibility. This inherent flexibility allows publishers to explore new license/marketing models such as "Try-Before-You-Buy" which allow consumers to evaluate a limited version of the product then direct them to a web storefront where they can purchase a software key to unlock the fully-featured version. With Privilege's integrated activation features, developers need no longer fear pass-along copies -- illicit CDs now become trialware demos that direct consumers to the web store. Unlicensed copies of software operate in trial mode -- with use periods and limited feature sets defined by the publisher -- and so create "Super Distribution" channels that become the ultimate sales tool for new titles.

-- Complete Interface Customization - Privilege lends publishers complete latitude when it comes to designing and managing trial and download interfaces. Publishers can extend branding to reach consumers at the activation or download interface, optionally capture user registration information, co-brand with the storefront, cross-market related products, and associate the interface with specials and other marketing strategies.

-- Manifest-Driven Downloads - Privilege provides for manifest-driven downloads which easily permit publishers to bundle products and deliver supporting collateral. This simplifies co-branding and target marketing initiatives.

-- Detailed Reports - Privilege produces detailed reports so publishers now have the means to identify their most effective channels and understand key metrics like what percent of sales are "turned on" and how soon consumers activate their titles after purchase. By identifying emerging distribution patterns publishers are equipped to make better business decisions.

-- Performance-Oriented Architecture - Privilege's architecture is designed to be reliable, scalable, and fast, able to process more than 65,000 activations per hour. That means publishers can enjoy revenue assurance across their offerings at a lower overall cost.

-- Easy Storefront Integration - Privilege easily integrates with existing storefront/shopping cart environments and provides a secure link from the storefront to the publisher's license activation key database. This feature is valuable to software vendors because it can reduce pilfering and preserve revenue margins.

-- Non-Intrusive Security - Privilege security is transparent, free from any negative impact on system behavior. The license management process runs only when the protected application is active -- which promotes better end-user acceptance and reduces overall support costs.

-- Protect Updates and Upgrades - Privilege simplifies licensing administration by allowing secure updates and upgrades remotely. Publishers can protect titles that have already been shipped because the update looks for the license already in place. Now publishers can deliver new licenses -- to enable greater functionality for example -- and lengthen the revenue stream in the process.

-- End-User Convenience - Privilege's archive capability gives end-users confidence in the ESD experience by allowing them to download a tangible copy to a CD. This convenient feature allows users the flexibility to download from one source (a computer with a faster connection) then download it via CD onto another computer if so desired, or simply retain a backup copy. Privilege also permits interruptible downloads so purchasers can stop and resume downloads conveniently, recover seamlessly from a dropped connection or spread large file downloads over several sessions.

For more information on the entire family of Privilege software distribution solutions, visit: http://www.ealaddin.com/privilege/

Aladdin Knowledge Systems

Aladdin (NASDAQ:ALDN) is a provider of digital security solutions for software commerce and Internet security since 1985. Aladdin serves over 30,000 customers worldwide. Aladdin's products include: the USB-based eToken device for user authentication and e-commerce security; the eSafe line of content security solutions that protect PCs and networks against malicious, inappropriate and nonproductive Internet-borne content; HASP and Hardlock, hardware-based software security systems that protect the revenues of developers; and Privilege, a software licensing and distribution platform.

Aladdin Knowledge Systems can be found on the World Wide Web at http://www.eAladdin.com .

For more information, call 212/896-1251.