Monday, February 20, 2006

USi reports increased demand for SaaS USi, the largest enterprise application Service Provider (ASP) and a premier provider of Software-as-a-Service (SaaS), today reported financial results for the 2005 fiscal year. Total revenue for 2005 was $99.0 million, a 22 percent increase year-over-year. The company had its first full year of profitability, reporting net income of $1.3 million. EBITDA for the year of $16.3 million represented a 30 percent increase over 2004.

"By all measures 2005 was an extraordinary year for USi," said Andrew A. Stern, chairman and chief executive officer. "We added great new clients, delivered tremendous financial results and introduced new services such as FlexAdvantage(SM) -- USi's on-demand pricing and delivery of support services. As originators of the Software-as-a-Service concept, we've focused on introducing innovations and methodologies that enable us to deliver substantial cost savings and significant business value to our Clients. USi's 2005 performance is evidence that our strategy is paying off."

USi attributes its growth in 2005 to increasing adoption by companies deploying enterprise scale software in a continuously supported, Software-as-a-Service model. The Company's recurring revenue has increased consecutively since the first quarter of 2004. USi expanded its impressive list of enterprise clientele by adding 39 new clients in 2005.

In a recent report issued by Gartner, Gartner on Outsourcing, 2005 (ID number: G00131095, 14 December 2005), the analyst firm notes Application Outsourcing continues to gain momentum. "Organizations are raising the bar on expected application outsourcing results. Price dominates, but processes, people and quality are scrutinized and factored into decisions."

USi has long recognized enterprises demand much more than cost savings. Maximizing the return on IT investments requires companies to unlock the full functional potential of applications. Innovative support and continuous investment in process improvement and automation are critical to satisfying and exceeding client expectations. For example, USiOasis(SM), USi's proprietary automation and monitoring system, has contributed significantly to USi's industry-leading service levels and client satisfaction, including its track record of unqualified SAS70 reports since 2001. In 2005 USi received a patent from the United States Patent and Trademark Office for two key components of USiOasis.

USi's 2005 highlights:

* Introduced FlexAdvantage, an on-demand usage-based pricing program that
gives clients full control of all support services and costs.
FlexAdvantage is available for Ariba, Oracle and PeopleSoft clients.

* Expanded USi's presence in India by opening a new significantly larger
facility, including a redundant Global Enterprise Management Center in
Hyderabad, in addition to the Company's facility in Bangalore.

* Launched new Information Security and Risk Management practice for
managed security and security consulting services. USi's practice
leverages the Company's experience managing core systems, user
identities and access to sensitive data for more than 150 companies to
help enterprises cost effectively meet information security, privacy,
and risk management needs.

* Introduced Business Advisory Services to help organizations achieve
technology-enabled business process improvement. USi's Business
Advisory Services focus on three broad categories: Process Design &
Improvement, Technology Evaluation & Planning and Project Execution &

About USi

USi, the largest independent Application Service Provider (ASP), delivers application outsourcing, remote management, professional services, ISV enablement, eBusiness development and hosting, and information security and risk management services to more than 150 world-class organizations in over 30 countries. USi's clients have access to a broad, diversified portfolio of service offerings, including: Ariba(R), Demandware(R), MarketLive(R), Microsoft(R), Oracle(R), PeopleSoft(R), and Siebel(R), as well as eCommerce solutions developed and delivered by USi. USi's TopLine(ISV)(TM) program gives Independent Software Vendors (ISVs) the immediate advantage of Software-as-a-Service (SaaS) by delivering their software to a larger client base throughUSi's hosted model.

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