Aladdin Knowledge Systems Introduces Next-Generation, Secure USB Authentication Token.

Business & Technology Editors

CHICAGO--(BUSINESS WIRE)--May 30, 2000

New Encryption Algorithm and Improved Mechanical Design Make New

Etoken R2 a Secure and Effective Two-factor Authentication Solution

Aladdin Knowledge Systems (NASDAQ: ALDN), a global leader in the field of Internet content and software security, today announced the launch of its new USB security token--eToken R2.

It's the first USB-based hardware device that can be used to encrypt information, store user passwords, private keys and digital certificates for authentication solutions for local area networks (LANs), virtual private networks (VPNs), e-commerce and mobile computing.

Aladdin's new eToken R2, which underwent nearly 18 months of research and development and extensive international market research, is a USB token about the size of a normal house key. Its underlying technology is based on the robust DESX symmetric encryption algorithm with a key length of 120 bits. Aladdin's previous USB token - a proof-of-concept device introduced at the January 1999 RSA Security Conference - utilized the MD5 hashing algorithm which no longer stands up to today's sophisticated security challenges.

The eToken R2 also incorporates an improved USB connector and a redesigned one-piece plastic housing which provides enhanced tamper evidence and increased reliability. The product's USB functionality and strong two-factor authentication enable companies and organizations to eliminate costly implementation and installation issues normally associated with deployment of smart cards and biometric devices. According to computer industry sources, more than 250 million desktop and laptop computers are already fitted with at least one USB port.

"The eToken R2 is an ideal security solution for Web based e-commerce where merchants, banks and online traders want to manage and control customer access to their revenue-generating Web sites," said Joe Krull, Vice President, eToken, Aladdin. "Possession of an R2 token coupled with its user-defined password is significantly more manageable and secure than old-fashioned passwords. In a corporate setting, the eToken R2 can easily be deployed as a low-cost, hardware-based, two-factor authentication tool tied to solutions from dozens of security vendors."

Because the eToken R2 contains no proprietary protocols and uses a published and tested encryption algorithm, it can be integrated easily into security solutions that currently support smart cards and other types of authentication devices. The ability to securely store private keys and digital certificates on the token position it well for integration with existing Public Key Infrastructure (PKI) products from all major PKI vendors. To underscore this capability, Aladdin actively participates in the PKI Forum (www.pkiforum.org) to further the development and acceptance of USB tokens as a key enabler for PKI solutions.

"The eToken R2 is our first true commercial product in the important USB token product group," said Yanki Margalit, Aladdin's Chairman and CEO. "Aladdin has distributed thousands of evaluation tokens and Software Development Kits around the globe to solicit user feedback and independent analysis. We are very pleased with the level of support we've received from our volunteer testers."

The eToken R2 is complemented by a feature-rich and intuitive Software Development Kit (SDK) which enables solutions providers, systems integrators and applications developers to integrate the R2 into their projects and products. Later this year, Aladdin plans to add further functionality to the token with eToken Enterprise, an off-the-shelf package of simple-to-use solutions which utilize the eToken R2 for secure e-mail, groupware password replacement, VPN integration and full integration with Windows 2000's enhanced security features. The Enterprise product is currently being tested as a beta product in more than 20 countries.

Aladdin is also recruiting companies and organizations for its eToken Technology Partner Program. Program participation offers companies who integrate with eToken or promote its implementation with streamlined technical support and joint sales and marketing opportunities. Additional information on the program can be obtained by e-mailing [e-mail].

About Aladdin

Aladdin (NASDAQ: ALDN) is a global leader in securing digital content, from applications software to Internet use and access. Aladdin's products include HASP and Hardlock, software security systems that protect the revenues of developers and publishers; Privilege, a software licensing platform for the Internet; the eSafe line of anti-vandal, anti-virus and content filtering software for PCs and networks connected to the Internet; and eToken for Internet security and authentication. Aladdin serves its customers through eight offices located in the world's major software markets as well as a network of 50 distributors serving more than 100 countries.

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