Strategic Focus Research Shows High Developer Productivity with Process Commander When Building, Deploying, Testing and Maintaining a Java-Based BPM Application

Pegasystems Inc. (NASDAQ: PEGA), a leading provider of rules-based, smart business process management software (BPM), today announced the results of a white paper from Strategic Focus, which conclude that using PegaRULES Process Commander will help accelerate Java development when building, deploying, testing and maintaining applications. Strategic Focus (http://www.strategicfocus.com)(a/) is a Milpitas, California-based software evaluation and strategy consulting firm.

Strategic Focus, experts in evaluating development tools and software products, recently conducted an independent and objective comparison of the developer productivity of building and changing a business process application with Process Commander and a typical Java IDE coding development approach(b). According to the research, it takes 38 percent less time to build, deploy and test a Java-based BPM application with Process Commander and 58 percent less time to maintain the application once it is built, suggesting significant productivity increases.

When evaluating the purchase of technology to build BPM applications, increased agility is one of the most critical factors to consider. Strategic Focus identified several features that support the use of Process Commander to increase productivity. These features include: rule and workflow-based development process built on an easy and extensible framework, personalized process flow, a reusable rule base and a rules resolution and inference engine.

Using Process Commander can help accelerate Java development - replacing hand-coded Java with Java dynamically generated by the PegaRULES rules engine. Developers can also incorporate their own Java (including their pre-existing Java) into Process Commander applications, taking advantage of the rules engine to dynamically select the right code at the right time.

Ease of use is also a critical issue to consider when assessing how to build an application. According to Strategic Focus, using Process Commander's forms-based approach to rules and process design, changes are easier to make than with Java custom code alone, which is more prone to human errors. "Unlike the custom-code Java environment, where code changes, database changes and recompilation are involved in making any modifications to the business process, we found this to be a very easy task with Process Commander, as it only involved making modifications to rules forms and the Visio flow diagrams," said Jay Prakash, president of Strategic Focus. "In fact, this is so easy that even business users can make many of the changes. We find this capability to be the core strength of Process Commander."

According to Strategic Focus, "It is our opinion that companies in general are likely to experience significant productivity improvements if they use Process Commander for building their decision-intensive business process applications, particularly those which require frequent changes to rules and process flows in real-time."

Pegasystems, recently positioned in the leader quadrant in both Gartner's 2003 BPM Magic Quadrant Report and 2003 Business Rule Engine Magic Quadrant Report(c), extends best practices throughout a company in the form of automated business rules - the practices and procedures that define how an organization works. Process Commander supports traditional BPM activities such as routing and monitoring work and, with its integrated rules-based engine, PegaRULES, also makes decisions and resolves work, automating previously manual tasks.

"Process Commander is an industry-leading BPM solution that will help organizations increase quality, agility, productivity, flexibility and ROI," said John Gillis, executive vice president, Virtusa. "We believe it is easier to build solutions with Process Commander than custom Java code alone." Virtusa, a US-based global provider of Productization(TM) services, has been working with Pegasystems since the second quarter of 2002 to design and implement Process Commander solutions for mutual customers.

"By combining a sophisticated rules engine with BPM technology, Pegasystems is poised to lead the BPM market with applications that are easier to build, change and maintain," said Paul McNulty, vice president, Pegasystems. "Combining both practice and process rules in a single object model, Process Commander is helping organizations build more intelligence into their BPM applications, while empowering business people to use technology to manage and improve those practices and processes needed to run their business."

About Pegasystems

Pegasystems Inc. (NASDAQ: PEGA) provides rules-based, smart business process management (BPM) software to large organizations, helping to deliver significant ROI and providing them with the flexibility and agility to respond to changing business needs. With annualized revenues of approximately $100 million and a blue-chip customer base, the company offers applications for the financial services, healthcare, insurance and government markets, as well as a cross-industry BPM application. Pegasystems is headquartered in Cambridge, Mass., and has regional offices in North America, Europe and the Pacific Rim. For more information, visit http://www.pega.com/.

Forward-Looking Statements

Certain statements contained in this press release may be construed as "forward-looking statements" as defined in the Private Securities Litigation Reform Act of 1995. The words "believe," "expect," "hope," "anticipate," "plan" and similar expressions identify forward-looking statements, which speak only as of the date the statement was made. The company does not undertake and specifically disclaims any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These statements are based on current expectations and assumptions and involve various risks and uncertainties, which could cause the Company's actual results to differ from those expressed in such forward-looking statements. These risks and uncertainties include impact of pending regulatory proceedings, difficulty in predicting the completion of product implementations and consequently the timing of revenue recognition, the inability to attract and retain key employees, reliance on key third-party relationships, management of the Company's growth, and other risks and uncertainties. Further information regarding these and other factors which could cause the Company's actual results to differ materially from any forward-looking statements contained in this press release is contained in the Company's Quarterly Report on Form 10Q for the quarter ended June 30, 2003 on file with the Securities and Exchange Commission. Investors are cautioned not to place undue reliance on such forward-looking statements and there are no assurances that the matters contained in such statements will be achieved.

NOTE: Pegasystems is a registered trademark of Pegasystems Inc. Other product and company names may be trademarks of their respective owners.

(a)Strategic Focus, 500E. Calaveras Blvd., #321, Milpitas, CA 95035 info@strategicfocus.com

(b)The complete white paper can be downloaded for a limited time from: http://www.pega.com/productsservices/rulestechnology/ rulestechnology.asp (Due to the length of this URL, it may be necessary to copy and paste this hyperlink into your Internet browser's URL address field.)

(c)"Magic Quadrant for Pure-Play BPM, 2Q03," by J. Sinur, J. Thompson, June 2, 2003. "The Business Rule Engine 2003 Magic Quadrant," by J. Sinur, April 7, 2003.

The Magic Quadrant is copyrighted June 2003 and by Gartner, Inc. and is reused with permission, which permission should not be deemed to be an endorsement of any company or product depicted in the quadrant. The Magic Quadrant is Gartner, Inc.'s opinion and is an analytical representation of a marketplace at and for a specific time period. It measures vendors against Gartner defined criteria for a marketplace. The positioning of vendors within a Magic Quadrant is based on the complex interplay of many factors. Gartner does not advise enterprises to select only those firms in the "Leaders" quadrant. In some situations, firms in the Visionary, Challenger, or Niche Player quadrants may be the right matches for an enterprise's requirements. Well-informed vendor selection decisions should rely on more than a Magic Quadrant. Gartner research is intended to be one of many information sources including other published information and direct analyst interaction. Gartner, Inc. expressly disclaims all warranties, express or implied, of fitness of this research for a particular purpose.