Arch Coal Standardizes on Packeteer(R) to Optimize WAN Capacity and Application Performance; Leading Coal Producer Eliminates Expensive WAN Upgrades With PacketShaper Systems.

CUPERTINO, Calif. -- Packeteer(R) (NASDAQ:PKTR), the global leader in WAN Application Optimization, today announced that St. Louis-based Arch Coal, Inc. (NYSE:ACI), the nation's second largest coal producer, is deploying and standardizing on Packeteer PacketShaper(R) systems to improve application performance and avoid significant ongoing costs.

Adopting PacketShapers more than doubled the bandwidth of Arch Coal's existing wide area network (WAN) and eliminated the need for circuit upgrades projected to cost roughly $120,000 annually. In addition to realizing a rapid return-on-investment forecast at less than 12 months, Arch Coal is benefiting from significantly improved performance for strategic financial reporting, revenue tracking, and mine operations management applications made possible by Packeteer's industry leading compression and Quality of Service capabilities.

Providing U.S. utilities with the fuel for roughly seven percent of the nation's electricity needs, Arch Coal operates numerous remote mining sites in several western and southern eastern states. To manage its rapidly expanding operations, the company connects its remote sites via Frame Relay links (256, 512, or 768 kbps) to its St. Louis-based data center with an ATM DS-3 circuit. Because of the company's rapid growth, however, increased network traffic at existing sites and new mining complexes placed a significant strain on network capacity and application performance.

According to Don Staten, manager of technology support with Arch Coal, the company initially responded by adding more bandwidth at one location only to discover this new capacity was quickly consumed by increased Internet traffic. No performance gains were realized for lower volume, but higher priority application traffic, despite the additional bandwidth. "It became imperative to know which applications or business processes were using the added bandwidth," said Staten. "We attempted to use network monitoring tools which proved to be fruitless because these tools do not provide the application-level monitoring necessary to determine the source of unacceptable bandwidth consumption."

Recognizing that the prohibitive cost of additional bandwidth and the deployment headaches to upgrade WAN links wasn't the long-term solution for handling its network growth, Arch Coal reviewed several alternative solutions and accepted the recommendation of long term reseller partner Results Technology, Inc. to evaluate WAN application optimization solutions from Packeteer.

Initially, Arch Coal deployed a PacketShaper 6500 at the headquarters site to prioritize outbound WAN traffic for the core financial and operations management applications. It soon became clear that application performance could be further improved -- and WAN bandwidth used more efficiently -- if PacketShapers were also deployed at the remote mining complexes.

PacketShapers control bandwidth allocation on each WAN link, prioritizing the core applications that require real-time data exchange. Staten reports that the PacketShaper compression applied to email and Web traffic effectively increased network bandwidth by at least 200 percent for critical applications. The result is better throughput for all data traffic, regardless of the application priority.

Arch Coal has realized two notable benefits from its use of the PacketShapers: significant ongoing cost avoidance and improved, predictable application performance. By using existing WAN links more efficiently, the company has eliminated the need to add capacity even though data volumes have increased. According to Staten, "We estimate we're saving a minimum of $10,000 per month because the PacketShapers help us use our existing bandwidth so much more efficiently."

PacketShapers are currently deployed at 18 remote sites, and will be part of the standard equipment that Arch Coal deploys at six new locations planned for the network this year.

Arch Coal also plans to use PacketShapers to control allocated bandwidth for new applications such as voice-over-IP (VoIP) and video. With more sites and more applications to manage, the Arch Coal network staff will also benefit from the centralized reports and administration tools in the Packeteer ReportCenter and PolicyCenter software. "The Packeteer System is designed to scale well which is really important to us as these new, bandwidth-demanding applications are added to the WAN," said Staten.

About Packeteer

Packeteer, Inc. (NASDAQ:PKTR), is the global market leader in WAN Optimization and Application Traffic Management for wide area networks. Deployed at more than 7,000 companies in 50 countries, Packeteer solutions empower IT organizations with patented network visibility, control, and acceleration capabilities delivered through a family of intelligent, scalable appliances. For more information, contact Packeteer at 408-873-4400 or visit the company's web site at www.packeteer.com.

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The statements contained in this press release that are not purely historical are forward-looking statements within the meaning of Section 21E of the Securities and Exchange Act of 1934, as amended, including statements regarding Packeteer's expectations, beliefs, intentions or strategies regarding the future. Forward-looking statements include express or implied statements regarding future revenues and profitability, spending levels by existing and prospective customers, new product development, liquidity and macro economic conditions. All forward-looking statements included in this press release are based upon information available to Packeteer as of the date hereof. Packeteer assumes no obligation to update any such forward-looking statements. Forward-looking statements involve risks and uncertainties, which could cause actual results to differ materially from those projected. Actual results may differ materially due to a number of factors including the perceived need for our products, our ability to convince potential customers of our value proposition, the costs of competitive solutions, continued capital spending by prospective customers and macro economic conditions. These and other risks relating to Packeteer's business are set forth in Packeteer's Form 10-K filed with the Securities and Exchange Commission on March 16, 2005, and Packeteer's Form 10-Qs and other reports filed from time to time with the Securities and Exchange Commission.