WITS Witness Systems (MM)

Company Furthers Leadership in India, Growing R&D Facility and Customer Support Operation, Expanding Customer Base, and Launching Impact 360 Workforce Optimization Solution Witness Systems (NASDAQ: WITS), a leading global provider of workforce optimization software and services, today announced additional investment in the Indian market. A substantial opportunity for the company both internally and externally, Witness Systems is driving further leadership by increasing its number of local customers and strategic reseller partners, and expanding its Bangalore research and development (R&D) operation and customer support center. In September 2005, Witness Systems launched Impact 360(TM), the industry's most complete workforce optimization solution. Impact 360 delivers a tightly-woven, next-generation solution for workforce management, quality monitoring/full-time recording, performance management and e-learning. Operating in TDM, IP and mixed telephony environments, it provides unprecedented visibility into customer service processes, workforce performance and customer intelligence, enabling organizations to gain a more holistic view of operations across the enterprise for faster, enhanced decision-making. According to industry analysts, the India Interaction Customer Relationship Management market is expected to grow at a compound annual growth rate (CAGR) of 16.2 percent from 2004-2011. This represents a market opportunity that is projected to reach more than $263 million in 2011. One key driver of new opportunities is the uptake of IP technology in call center environments. Another is how Impact 360 is fundamentally changing the way organizations purchase, implement and use full-time recording, quality monitoring and workforce management software. With a leadership position in India's rapidly growing contact center and IP telephony space, Witness Systems is well positioned to exploit this market potential. "India is a significant market for us in two respects. Over the past two years, it has emerged as our fastest growing market - one in which we have the leadership position with more than 58,000 seats and a set of world-class partners. Further, we are expanding our R&D and customer support hub," said Dave Gould, CEO for Witness Systems. India R&D Facility and Customer Support Center Drive Impact 360 Success A key area of investment and continued growth for Witness Systems is its India R&D operation. The company engaged local strategic partners for its initial development operations and is now expanding that effort with its own India-based R&D center. "We are very pleased with our accelerated time to market as evidenced by delivering the market's first workforce optimization solution, and the ability to meet our customers' requirements and changing needs even more effectively," explained Ed Murray, senior vice president, global R&D for Witness Systems. "Key to this was our relationship with FCG India, many of whose employees will soon join Witness Systems' global R&D organization. The initial impact they've had on the business has been significant, and we look forward to many more achievements and successes driven out of this arm of our R&D operation." Key to this transition is that a number of associates who worked on Witness Systems projects will become Witness Systems employees. As part of employment offers and to induce them to join the company, Witness Systems' Compensation Committee has approved an award of options to acquire up to 72,550 shares of common stock. The options will be awarded to approximately 75 people who have been active in R&D activity for Witness Systems. The stock option awards will be made as promptly as possible following the commencement of employment of the individuals.(1) Added Murray, "Our center in India is comprised of a team of highly-skilled and experienced IT professionals producing world-class solutions for the global contact center, IP telephony and enterprise market at affordable prices. We look forward to continuing to expand our R&D operation and creating new employment opportunities to support our growth and dominant position in this market." Another key area of investment and growth for the company centers around its customer support operation. Through its center in India, which supports customers throughout the Asia Pacific region, the company is further investing and adding resources to provide additional support capability for its growing global customer base. To contact Witness Systems in India, call +91 8051 993000, or direct your communications to Witness Systems Software India (Pvt.) Ltd., HM Eleganza, #31, Museum Road, Bangalore 25, India. About Witness Systems Witness Systems (NASDAQ: WITS) is a leading global provider of workforce optimization software and services. The company's Impact 360(TM) solution - which plays a strategic role in the customer interaction centers of Global 2000 and small- and medium-sized businesses (SMBs) worldwide - is also deployed in IP telephony and back office environments, and throughout the extended enterprise, including branch offices. Witness Systems' software is comprised of quality monitoring, compliance, high-volume and IP telephony recording solutions, as well as workforce management, actionable learning and performance management. The company's solutions enable organizations to optimize their people, processes and technology throughout the enterprise. Witness Systems' customers benefit from an integrated business consulting, implementation and training methodology that supports a rapid deployment, enabling them to drive revenue, reduce operational costs, and achieve greater customer retention and loyalty. For additional information about Witness Systems, visit www.witness.com. (1) Witness Systems to Award Options on Approximately 72,550 Shares of Its Common Stock to Approximately 75 People. To induce certain prospects to accept employment with Witness Systems, the Compensation Committee of the Witness Systems Board of Directors has approved an award to approximately 75 people of options to acquire up to 72,550 shares of common stock. The stock option awards will be made as promptly as possible following the employment of those individuals. All of the inducement options to be granted by Witness Systems will have an exercise price equal to the closing price on NASDAQ on the date of the issuance and, subject to standard provisions for termination, forfeiture and acceleration, will generally be exercisable for five years from the date of grant. The inducement options will first become exercisable, as to 25 percent of the total amount, after one year from the date of grant, and commencing 13 months after grant and until the end of the 47th month following grant, the options will become exercisable as to an additional two percent per month. Cautionary Note Regarding Forward-looking Statements: Information in this release that involves Witness Systems' expectations, plans, intentions or strategies regarding the future are forward-looking statements that are not facts and involve a number of risks and uncertainties. They are identified by words such as "anticipates," "expects," "intends," "plans," "believes," "estimates," and similar expressions. These statements are based upon information available to Witness Systems as of the date of this release, and the company assumes no obligation to update any such forward-looking statement. Forward-looking statements believed true when made may ultimately prove to be incorrect. These statements are not guarantees of future performance and are subject to risks, uncertainties and other factors, some of which are beyond our control and may cause actual results to differ materially from our current expectations. Some of the factors that could cause actual future results to differ materially from current expectations include fluctuations in customer demand and the timing of orders; the company's ability to manage its growth; the risk of new product introductions and customer acceptance of new products; the rapid technological change which characterizes the company's markets; the risks associated with international sales as the company expands its markets, including the risks associated with foreign currency fluctuations; the ability of the company to complete and integrate successfully any acquisitions or investments it may make; and the ability of the company to compete successfully in the future, as well as other risks identified under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the company's Form 10-K for the year ended December 31, 2004 and its Form 10-Q for the quarter ended September 30, 2005, as filed with the Securities and Exchange Commission. Witness, Impact 360 and the Witness logo are United States registered trademarks of Witness Systems, Inc., protected by laws of the U.S. and other countries. All other trademarks mentioned in this document are the property of their respective owners.