May 11, 2004
KeyComputing Introduces Xkey 2.0 - Exchange Edition - the First and Only USB Device That Enables Users of Microsoft Exchange to Work From any PC
USB Device Becomes a Personal Server, Securely Transforming any PC into a Corporate Workstation

LAS VEGAS--(BUSINESS WIRE)--May 11, 2004-- Mid-market enterprises faced with constrained IT budgets are acutely aware of the costs associated with purchasing and maintaining a fleet of notebook PCs, as well as the security risks when employees access corporate data remotely. KeyComputing, an M-Systems business unit (Nasdaq:FLSH - News), addresses these issues with Xkey(TM) 2.0 Exchange Edition, an ideal solution for companies that want to let their office-based employees extend their workday - without the physical and financial burden of a dedicated laptop.

Xkey 2.0 allows professionals to easily work on their Exchange messaging data - mail, calendar, contacts - and other corporate documents from any PC, for secure, productive work outside the office. Xkey does more than merely replicate users' Outlook data; it actually synchronizes directly with an Exchange server from any computer. The first solution of its kind, Xkey digs deep into the Exchange environment, making all the capabilities and features of Exchange available to users wherever they are - securely and effortlessly. Employees can now access Public Folders, schedule meetings, reserve conference rooms and interact with business associates while they are out of the office, improving overall company productivity. With a sophisticated suite of technologies including an embedded microprocessor, relational database, SSL engine, Java application server, suite of security applications and a cryptographic core, Xkey is the only solution that delivers the robust security features and support for the Exchange messaging environment that corporations require.

"For businesses relying on Microsoft® Exchange, Xkey 2.0 is a cost-saving solution that acts as a personal server and replicates an employee's Exchange-related work environment. It enables them to be productive from any computer in any network state and eliminates the need for businesses to purchase and maintain a notebook for every employee," said Daniel Schreiber, managing director of KeyComputing. "Furthermore, risks associated with using non-company issued PCs are mitigated with our leading security features."

Convenient, Simple and Secure

Xkey 2.0 is ideal for the "day extender" who works a few hours outside of the office. Users simply plug their Xkey into any PC, enter their password, and their complete Exchange environment appears ready for immediate work online or offline. Xkey can also hold other corporate data such as spreadsheets, presentations and documents.

With Xkey, corporations can confidently let users work from non-company issued PCs, such as home computers, without compromising confidential passwords or corporate data. Xkey blocks malicious spyware applications such as key-logging, and removes all traces associated with a Web browser, such as cookies, history and temporary files.

Users need not worry if their device is lost or stolen, as Xkey encrypts all information, and without the user's password, data on the device cannot be accessed.

"Web access to e-mail is a nightmare of usability issues and security exposures," said Rob Enderle, principal analyst for the Enderle Group. "Typical security methods drive up support calls and you still have to worry about what passwords and IDs are left behind on the borrowed PC. The Xkey addresses both of these problems, it makes secure e-mail access very simple and it removes the sensitive information from the borrowed PC. Frankly I don't know why any CIO would allow corporate Web based e-mail without something like the Xkey."

Easy to Deploy and Manage

Convenient for the IT department, Xkey's self-provisioning deployment and zero server-side changes make it effortless to manage - there is no server-side installation or configuration required. Providing a total work-from-home solution, Xkey addresses the challenges traditionally associated with authentication, securing communications and end-point security that are inherent with work from non-company-issued computers.

Robust security features also help IT managers "sleep better at night" when employees are working from non-company issued computers and connecting to their Exchange servers via Outlook Web Access (OWA). Xkey establishes a safe working environment that provides secure SSL VPN connections using two-factor authentication and all communications to and from an Exchange server are encrypted. In addition Xkey addresses the security threats closely associated with working via OWA:

         Security Threat                      Xkey Solution
---------------------------------- -----------------------------------
Sensitive information left on un- Xkey's 'Stealth Mode' ensures no
trusted PC: unintended traces are left behind.
---------------------------------- -----------------------------------
Keystroke recorders capture Xkey neutralizes all keystroke
passwords or data: recorders.
---------------------------------- -----------------------------------
Weak authentication from unknown Xkey is a token for two-factor
machine: authentication.
---------------------------------- -----------------------------------
OWA's vulnerability to open Removing Xkey ensures all Exchange
browser sessions & cached sessions are securely terminated.
---------------------------------- -----------------------------------
Eavesdropping to communications: Xkey secures communications with
---------------------------------- -----------------------------------

The Size and Simplicity of Xkey Belies its Technological Prowess

Behind the intuitive user interface lies the processing power of a PDA, the cryptographic engine of a smartcard and up to a gigabyte of storage. On top of that, Xkey runs a full Exchange client, a database for securely storing Exchange data, a synchronization engine that connects to the corporate Exchange server and a host of security applications. It works in any network state, online, offline and behind firewalls, and it performs well on slow or intermittent connections.

Pricing and Availability

Xkey 2.0 Exchange Edition is available now in capacities of 256MB (U.S. MSRP $300) and 512MB (U.S. MSRP of $450). Pricing for 1GB devices is available upon special request.

About KeyComputing

KeyComputing, an M-Systems business unit, is a leading provider of corporate solutions based on the Smart DiskOnKey platform. KeyComputing creates enterprise-grade solutions which, in conjunction with the processing power and security capabilities of the Smart DiskOnKey, offer unique solutions for corporations looking to increase their employee mobility and business continuity. More information is available at

NOTE: This press release includes forward-looking statements as defined in the private Securities Litigation Reform Act of 1995. Readers are cautioned not to place undue reliance on these forward-looking statements, as they are subject to various risks and uncertainties which may cause actual results to vary significantly. These risks include, but are not limited to, risks related to: the effect of global economic conditions in general and conditions in the company's industry and target markets in particular, shifts in supply and demand, market acceptance, the impact of competitive products and pricing, product development, commercialization and technological difficulties, and capacity and supply constraints including dependence on flash component suppliers; changes in the company's and its customers' inventory levels; timely product and technology development/upgrades and the ability to manage changes in market conditions as needed; market acceptance of new products and continuing product demand; the impact of competitive products and pricing on the company's and its customers' products and markets; development, release and sales of new products by strategic suppliers and customers; development and growth of anticipated markets for the company's and its customers' products; and other risk factors detailed in the company's most recent annual report and/or in any of its other filings with the Securities and Exchange Commission. The company assumes no obligation to update the Information in this release. Reference to the company's Web site above does not constitute incorporation of any of the information thereon into this press release.

     O'Leary and Partners Public Relations for KeyComputing
Gina Ray, 949-224-4023
Ruth Rosene, 949-224-4090
KCSA Worldwide for M-Systems
Jeff Corbin (Investors), 212-682-6300
Lee Roth (Investors), 212-682-6300

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