Wave Systems and NTT DATA Sign Alliance MOU for Embassy (R) Technology and Services in Japan.

LEE, Mass. & TOKYO -- Wave Systems Corp. (Nasdaq: WAVX - www.wave.com) announced today that it has signed with NTT DATA Corporation (TOKYO: 9613.T) of Japan a non-binding memorandum of understanding (MOU) to form an alliance to resell Wave's Embassy secure software technology for the trusted computing market. Under the MOU, the parties envision the formation of a distributor and systems integrator relationship to resell Wave's products and solutions and to provide support services to its customers in an effort to introduce such products and solutions to the Japanese enterprise market. Trusted computing markets in Japan that may be addressed by the alliance include financial services, government, health care and consumers.

Wave's Embassy trusted computing features include network policy management, data protection, password protection, strong authentication -- including machine, biometric and smart card authentication of a user's personal computer to a server -- and encrypted email.

"Wave's Embassy trusted computing technology and services solutions address a wide range of security bringing customer value to businesses and consumers today, including authentication of identity and data protection," said Hitokazu Tanabe, senior vice president and senior executive manager, Business Solution Sector, NTT DATA. "The market for security and solutions, such as Trusted Computing, has been accelerated by the Japanese Data Protection Act. There is a growing demand for quality secure solutions in the Japan market. Our intention is to work with Wave in Japan as our preferred partner for innovative trusted computing solutions. We will discuss cooperation with the solution based on the VANADIS(i) architecture which our company provides."

"Wave is delighted to be working with NTT DATA to help address the many personal computer security issues -- including identity and data theft, phishing and insecure passwords -- that challenge businesses and consumers every day," said Steven Sprague, president and CEO, Wave Systems. "We believe our broad range of solutions from single client to enterprise-wide server solutions will give users important tools to have a more secure and trusted computing environment."

Wave's Embassy software is designed to support the next generation, security chip hardware called the Trusted Platform Module (TPM). The computer industry has shipped millions of PCs embedded with the TPM chip. Wave has designed its Embassy technology to take advantage of all commercially available TPMs.

This MOU is a non-binding expression of the parties' current intentions. Both parties hope to complete a definitive agreement by the end of the second quarter of this year.

More information on Wave's Embassy secure software is available at www.wave.com.

About Wave Systems

Wave Systems solves the most critical security problems for enterprises and government with software solutions that are trustworthy, reliable, easy to use, and offer a speedy return on investment. Wave's trusted computing software solutions include strong authentication, data protection, advanced password management and enterprise-wide trust management services. For more information about Wave, visit http://www.wave.com.

About NTT DATA Corporation

NTT DATA traces its roots back to 1967, to the establishment of the Data Communications Bureau within Nippon Telegraph and Telephone Public Corporation (present-day NTT). The Bureau sustained consistent growth based on system development, building, operation, and maintenance across a broad front, ranging from nation wide systems that formed the cornerstones of society to a multiplicity of corporate network systems. In 1988 it began a new chapter in its story when it became NTT DATA Corporation.

Today, NTT DATA has grown into a group comprising 100 subsidiaries and affiliates. It possesses comprehensive strengths and has the best track record of any system integrator in Japan. It harnesses these many strengths to engage in business that is in keeping with its two priority management policies: "Enhancing the Competitiveness of the System Integration Business" and "Creating New Businesses."

In an information network society, it is not enough simply to increase business efficiency and make daily life more convenient. NTT DATA is committed to using IT to shape the affluent society of the future, a place where information can be accessed at any time and in any place. For more information about NTT DATA, visit http://www.nttdata.co.jp/en/index.html.

Safe Harbor for Forward-Looking Statements

Except for the statements of historical fact, the information presented herein constitutes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include general economic and business conditions, the ability to fund operations, the ability to forge partnerships required for deployment, changes in consumer and corporate buying habits, chip development and production, the rapid pace of change in the technology industry and other factors over which Wave Systems Corp. has little or no control. Wave Systems assumes no obligation to publicly update or revise any forward-looking statements.

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(i) "VANADIS" stands for Vertical Advanced Network Architecture for Dynamic Enterprise IT Strategy. It is an IT infrastructure construction service developed and supplied by NTT DATA based on a unified architecture that is designed for the integrated management of individual in-house systems used by companies and other organizations, including IP networks, IP phones, e-mail, portals, and electronic decision approval.