Watchguard Increases Market Share

SEATTLE -- WatchGuard Technologies, Inc. (Nasdaq:WGRD), a leading provider of Internet security solutions, today announced that it was ranked the fastest growing major firewall and VPN appliance-focused vendor across all small-to medium-sized enterprise (SME) segments and has expanded its market share for the second consecutive quarter in the SME market for firewall and VPN appliances. According to the Infonetics Research report, "VPN and Firewall Products Quarterly Worldwide Market Share and Forecasts, Q3 2002," WatchGuard grew its revenues 20.8%, increasing its revenue market share 1.2 points over the previous quarter in the SME market (appliances priced below $10,000 USD). The company also grew its revenues 16.5% and increased its revenue market share by 1.2 points in the key mid-range segment of the SME market (appliances priced between $1,500 and $9,999 USD) and maintained its number two position in this segment based on unit volumes. In addition, WatchGuard also grew its revenues 39.8% and increased its revenue market share 1.6 points in the category of appliances priced between $490 and $1,499 USD. "We anticipate that the firewall and VPN appliance market will continue its steady growth and that products for the middle of the market will continue to dominate unit shipments," said Jeff Wilson, executive director at Infonetics Research. "WatchGuard made excellent revenue gains overall this quarter and looks to continue the trend of increasing market share in the key mid-market segment. In addition to enhancing the depth and breadth of their SME product line, their acquisition of RapidStream is beginning to bear fruit in the larger distributed enterprise." "Our continued increase in market share is a validation of the strength of our product line, service offering and commitment to customers," said Jim Cady, chairman, CEO and president of WatchGuard. "In response to customer demand, we are continuing to enhance our existing Firebox III line for the SME market and introduce innovations in our Firebox Vclass models for the larger distributed enterprise and in the RapidStream "Secured by Check Point" solutions for the Global 1000." WatchGuard Technologies Inc.