Aladdin Survey: Number One Contributor to High Software Piracy Rates may be Software Publishers

CHICAGO, November 21, 2005 - Aladdin Knowledge Systems (NASDAQ: ALDN), the worldwide leader in Software Digital Rights Management (DRM) and USB-based authentication solutions, and a leading innovator in enterprise secure content management, today announced the results of a major software protection and licensing market survey that suggests the largest contributor to piracy may be software vendors themselves.

The new Software DRM Market Survey conducted by Aladdin included responses from more than 660 software vendors and publishers from North America, the United Kingdom, Germany and other countries. Conducted in the first half of this year, respondents were distributed among a broad spectrum of software publishers and developers serving numerous markets. The survey base included Aladdin HASP customers, organizations that use competitive hardware keys or software-based software protection and licensing solutions, as well as organizations that developed homegrown solutions or do not use any protection or licensing solutions.

The survey found that 66 percent of software vendors not protecting their software against piracy believe no one is stealing their product. Seventy-seven percent of the same group also said they may consider leaving their software unprotected in the future. Three other key findings within the survey include:

• Seventy-five percent of software vendors continue to use perpetual software licensing models, making this the most common licensing model today despite an emerging shift toward other licensing models.
• Nearly 50 percent of software vendors are noticing an upswing in the use of time-based and floating software licenses.
• Seventy-one percent of software vendors using hardware-based protection keys sell their protected software to the enterprise, indicating a solid need for strong protection in enterprise applications.

"Without securing and properly licensing their software, software vendors leave their revenues and intellectual property open to become another statistic in annual piracy rates that continue to soar," said Avi Barir, vice president of Software Digital Rights Management (DRM) at Aladdin Knowledge Systems. "The survey illustrates that a large number of developers continue to take that risk - potentially serving as their own worst enemy."

About Aladdin HASP

The Aladdin HASP family provides a suite of revolutionary hardware and software solutions engineered for software publishers to ensure that their intellectual property is securely protected and that their products are easy to distribute. Aladdin HASP provides the highest level of anti-piracy protection available to combat unauthorized copying and use. HASP also delivers powerful new tools to enable innovative software licensing schemes and flexible pricing models that allow publishers to bring their products to market with confidence while increasing sales and profits:

• HASP for Single-User: A hardware-based (HASP HL) or software-based (HASP SL) solution for protecting and licensing software running on stand-alone computers.
• HASP for Enterprise: A hardware-based (HASP HL Net) solution for protecting and licensing software used by multiple users in network environments and the enterprise.
• HASP for Trialware: A software-based solution (HASP TT) for creating secure, controlled software trialware.
• HASP for Documents: A hardware-based system (HASP DocSeal) for protecting intellectual property and sensitive information in HTML files.

HASP is the worldwide market leader in software DRM solutions and is used by more software developers than any other product. In a recent head-to-head comparison conducted by independent testing lab KeyLabs, HASP finished far ahead of its closest competitor with a large lead in key categories including security, ease-of-use, flexibility of tools and functionality, and compatibility across platforms and environments.

About Aladdin

Aladdin Knowledge Systems Ltd. is a global provider of security solutions that reduce software theft, authenticate network users and protect against unwanted Internet and e-mail content, including spam, viruses and spyware. Its security products are organized into two segments: Software Digital Rights Management (DRM) and Enterprise Security. Aladdin"s Software DRM products allow software publishers to protect their intellectual property and increase revenues by reducing losses from software theft and piracy. Its Enterprise Security solutions enable organizations to secure their information technology assets by controlling who has access to their networks (authentication) and what content their users can utilize (content security). Visit the Aladdin Web site at www.Aladdin.com.

©2002-2005 Aladdin Knowledge Systems, Ltd. All rights reserved. HASP, Aladdin Knowledge Systems and the Aladdin logo are trademarks or registered trademarks of Aladdin Knowledge Systems, Ltd. All other product and brand names mentioned in this document are trademarks or registered trademarks of their respective owners.

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