Metastorm Reports Breakaway Growth in 2005

Record Sales Revenues and Acquisition Growth Propel BPM Leader up Market Share Charts

COLUMBIA, MD – January 31, 2006 – Metastorm, a leading provider of Business Process Management (BPM) software for modeling, automating, integrating, and improving both human and system-based processes, today announced financial results for its year ended December 31, 2005. The privately held company posted record total revenues with 61% growth in the fourth quarter over the same quarter last year and 34% total year-over-year growth in 2005. The Q4 2005 results include the effect of the [October 2005] acquisition of CommerceQuest. The company also experienced a significant increase in the number of enterprise-level BPM software license sales and a continued rise in investment from its existing customers, who contributed 40 percent of the company’s revenue during the year as they continued to expand their use of the company’s BPM software across the enterprise – a strong indicator of the value that Metastorm’s software is delivering to organizations worldwide.

Metastorm’s growth was driven by sales to both new and existing customers with 110 new customers added to the company’s portfolio for the year. New customers added to the company’s global listing in 2005 included Ernst & Young (U.S.), Homebuy (U.K), KPMG (U.S.), Patni (India), Saudi Ministry of Foreign Affairs (Saudi Arabia), and Telenor (Norway). Existing customers expanding their use of Metastorm’s BPM software this year included AmerisourceBergen (U.S), Chubb Insurance (U.S. & Asia), CIT Group (U.S.), London Underground Limited (UK), Thomson Elite (U.S.), UK Home Office (UK), and the Washington Wizards NBA Team (U.S.). Metastorm’s growth enabled the company to surpass 1200 customers further strengthening the company’s position as a BPM software market leader.

Metastorm established itself as the breakaway BPM vendor in Q4 of 2005 when it acquired fellow BPM vendor CommerceQuest. The combination of the two companies enabled Metastorm to become the largest pure-play BPM vendor and to be the only BPM vendor able to address the complex interactions of both people and system-based process activities with a single solution.

“Metastorm maintained its focus throughout 2005 on delivering robust BPM solutions and helping organizations deliver efficiency, control and agility across the enterprise. At the same time, we took the strategic steps necessary to break away from the pack in an increasingly competitive market,” stated Robert Farrell, president and CEO of Metastorm. “We executed the CommerceQuest transaction in order to extend the breadth of our BPM Suite and to add the scale in revenue and resources necessary to remain a leader in 2006. Our continued profitability from quarter to quarter is a reflection of our commitment to performance and the focused execution of our strategy. With the steadily increasing demand for our BPM technology and a solid vision in place, we believe we are well positioned to extend our leadership position even further in 2006 and beyond.”

Metastorm’s achievements in 2005 included being recognized by IDC as one of the Top 10 BPM worldwide business process automation deployment software vendors in 2004 market share(1), as measured by BPM software revenues, and making the Deloitte & Touche Fast 50 list of the fastest growing software vendors for the third consecutive year. Metastorm continued to lead the market in product innovation, establishing the definition of “roundtrip BPM” and subsequently releasing a complete BPM Suite to address the entire roundtrip process lifecycle – including design, integration, automation, monitoring, analysis, simulation and improvement – on a near real-time basis. Key to completing its BPM Suite were the release of Metastorm Envision – for complex process modeling, simulation, and cost analysis – and the rapid post-merger integration of its human-centric BPM products with the robust integration and system-to-system process management capabilities it gained from CommerceQuest.

Metastorm also expanded its OEM channel partnerships – extending its agreement with Thomson Elite for the Legal vertical and establishing a new agreement with Thomson Financial for the Financial Services industry. The company continued to realize the benefit of a strong global partner network with over 100 channel partners selling Metastorm-based solutions and services in North America, Europe, the Middle East, Africa, and Asia-Pacific. Metastorm finished 2005 with a significant worldwide presence that includes customers in over 41 countries.

(1) IDC's measurement of 2005 market share will be released in March 2006, after the completion of the 2005 data collection process.

About Metastorm
As the first breakaway BPM vendor, Metastorm is a leader in business process management (BPM) software and best practice methodologies for modeling, automating, integrating, and improving both human and system-based processes. Metastorm BPM™ is a complete solution for roundtrip process improvement, designed specifically to address complex processes that are unique to organizations. Metastorm’s 1200+ global client base in manufacturing, retail, financial services, business services, healthcare and government are achieving rapid ROI and Enterprise Process Advantage® in customer service, supply chain operations, risk management, and internal operations. For more information visit www.metastorm.com.

Copyright 2006, Metastorm, Inc. All rights reserved. Metastorm BPM and Enterprise Process Advantage are either trademarks or registered trademarks of Metastorm, Inc. Other product, service and company names mentioned herein are for identification purposes only and may be trademarks of their respective owners.

THIS NEWS RELEASE CONTAINS ARCHIVAL INFORMATION, WHICH SHOULD NOT BE CONSIDERED CURRENT AND MAY NO LONGER BE ACCURATE.

Press Contact Information:
Gina Karr
Metastorm
T: +1 443-874-1260
T: +44 (0) 208 971 1519
gkarr@metastorm.com

Shahed Ahmed
Merritt Group
T: +1 703-390-1515
ahmed@merrittgrp.com