Aladdin Strengthens Market Leadership with Release of Advanced eToken Authentication Solutions

World leader in USB-based authentication to accelerate development and deployment of new products throughout 2007 to meet widening global demand for full, flexible strong authentication and password management solutions; will demonstrate new solutions at RSA Conference 2007

CHICAGO, January 31, 2007 - Aladdin Knowledge Systems Ltd.
(NASDAQ: ALDN), the leader in Software DRM, strong authentication, and content security solutions, today announced a number of far-reaching new products for the award-winning Aladdin eToken™ family of authentication tokens, applications and management system. The new solutions are to be launched throughout 2007 in response to the explosive demand for authentication technologies that can address complex scenarios, new regulatory requirements, digital signature laws, and broader PKI deployments.

Aladdin's enhanced eToken product offering further improves companies' ability to implement full eToken authentication solutions tailored to their needs - offering the lowest total cost of ownership and the flexibility for future solution expansion. These product releases reinforce Aladdin's position as a complete, one-platform provider of powerful authentication solutions that are uniquely manageable, flexible, and easy to deploy and use. Aladdin's new eToken products will be on display at the RSA Conference in San Francisco
February 5-9.

According to Ant Allan, research vice president at Gartner Inc., "We will see passwords yielding to stronger authentication methods in most organizations during the next seven years. Within the next two years, we will see that the threat of malware in remote access situations will make passwords totally obsolete."¹

The new products and enhancements to be released in the coming months include:

• New eToken authentication devices - New devices will further expand and complement Aladdin's USB smart-card-based offerings, including a new one-time password token (eToken PASS), providing lower TCO to organizations by allowing them to deploy any mix of devices to best meet specific needs. eToken PASS complements the broadest selection of authentication devices on the market today, now including the eToken PRO (smart-card-based authentication device in both USB and card form factors), eToken NG-OTP (hybrid USB and OTP token), and eToken NG-FLASH (USB authentication token with flash memory) - all fully manageable by Aladdin's Token Management System.
• Broadest client platform support for PKI - eToken extends the industry's broadest client platform support for PKI deployments, featuring added Windows® Vista®, Linux®, Intel®-Mac® and Mac® Keychain support -- providing unparalleled flexibility for customers with multi-platform IT environments.
• Introducing a full Single Sign-On solution - As organizations continue to struggle with password security and management issues, Aladdin introduces eToken SSO, a full-fledged Single Sign-On application, providing secure credential management and strong authentication in a single solution that is easy to deploy and use. eToken SSO supports both secure portable storage of user logon credentials on-board the eToken devices, and secure local storage of credentials on users' PCs. Featuring centralized management and backup of credentials using eToken TMS, eToken SSO provides highly secure exception handling, including scenarios when an employee loses a token while on the road.
• Enhanced authentication management tools - Aladdin will unveil the latest version of its Token Management System (TMS), version 2.0, managing the full life cycle of eToken devices and associated security applications from one centralized system. TMS 2.0 expands on an open, standard-based architecture to offer enhanced scalability through a three-tier, Web-based architecture; new and improved Web-based user self-service and administrator management; handling of exceptions such as "employee-on-the-road lost token" scenarios; and full reporting and auditing. Additionally, TMS capabilities are expanded to specifically cater to the requirements of managed security service providers.

"Throughout 2007, Aladdin will be affirming our leadership in the strong authentication arena through the introduction of innovative security solutions and hardware devices," said Shlomi Yanai, vice president of the Aladdin eToken Business Unit. "Our rapidly growing customer base has made it clear that Aladdin's focus on providing cutting-edge products that remain practical and easy-to-use for both administrators and end users is making us the number one choice among enterprises."

Aladdin's complete and flexible offering was pointed out by the University of Wisconsin-Madison as a significant factor in choosing the eToken solution. "We selected Aladdin eToken because of its unparalleled functionality, as well as its ongoing acceptance at other major universities," said Nicholas Davis, PKI project leader for the University of Wisconsin-Madison. "We look forward to making Aladdin eToken available throughout our numerous schools, as it has proven to be a manageable, cost-effective solution for storing digital certificates."

(n)Code Solutions, a division of GNFC Ltd. and one of India's leading licensed certifying authorities, also cites quality and ease of use as differentiators that have led them to select Aladdin eToken for the storage of customers' digital credentials. "The quality of the Aladdin eToken solution was the key differentiating factor for our selection of the solution," said J.S. Kochar, CEO of (n)Code Solutions. "We also highly value eToken's FIPS certification and its overall ease of use - a trait that sets eToken apart from the competition. With thousands of eTokens already deployed, our certificate authority continues to benefit from intuitive technology as well as solid, reliable local support."

About Aladdin eToken

Aladdin eToken is the world leader for USB-based authentication solutions. It provides strong user authentication and cost-effective password management solutions enabling organizations to easily and effectively expand business opportunities with secure network access, improve data security through enhanced encryption and digital signing, and reduce costs and vulnerabilities through superior password management. For more information, please visit www.Aladdin.com/eToken.

About Aladdin

Aladdin Knowledge Systems Ltd. (NASDAQ: ALDN), founded in 1985, is a global provider of security solutions. Its security products are organized into two segments: Software Digital Rights Management (DRM) and Enterprise Security. Aladdin's Software DRM products allow software developers and publishers to protect their intellectual property, increase revenues through licensing, and reduce losses from software piracy. Aladdin's Enterprise Security solutions enable organizations to secure their information technology assets by controlling who has access to their networks (identity and password management) and what content their users can utilize (proactive content security). Aladdin has offices in 10 countries, a worldwide network of channel partners and holds numerous industry awards for innovation and reliability. For more information, please visit the Aladdin Web site at www.Aladdin.com.

1. Gartner, "Passwörterdämmerung: Twilight of the Passwords - Solving User Authentication" by Ant Allan, presented at Gartner IT Security Summit 2006, September 18-19, 2006.

©2007 Aladdin Knowledge Systems, Ltd. All rights reserved. eToken, 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.

####

All trademarks and registered trademarks are the property of their respective holders.