Company

AUSTIN, TEXAS – November 2, 2005 – Pervasive Software® Inc. (Nasdaq: PVSW) today released information from speeches by Gartner analyst Robert Anderson and large software vendors from its recent Metamorphosis 4.0 conference, in Chicago, IL. The conference included leading ISVs, systems integrators, and value-added resellers including Artemis, Eloqua, Epicor, Intuit, and Pivotal.

Anderson’s presentation outlined what he characterized as the “Software Complexity Crisis” and the introduction of a new era called the “Integration Era.” As software vendors continuously add new features and functionality, software grows too complex and costly for customers to maintain and manage. Integration of data has become a critical business challenge because of the massive heterogeneity within organizations and the continued use of legacy applications for the foreseeable future, including diverse formats and structures. In fact, according to Gartner, 50% of the implementation cost of packaged application software is spent on integration alone

“What customers really want,” according to Anderson, “is a single, simple and cost-effective integration platform for the immediate and continuous capture, transformation, and delivery of data from one database to another, regardless of the database type, physical location, or hardware platform.”

“Small businesses have similar integration needs as Fortune 500 companies, but don’t have the time or money for massive integration projects,” said Daniel Beck, product manager, QuickBooks Group at Intuit. “Providing simple and effective ways for these companies to connect and integrate is a massive opportunity for us.”

As industry consolidation reflects software titans’ strategy of blurring the lines between software infrastructure and business applications, ISVs seek vendor partners who will help them integrate in customers’ complex, heterogeneous environments rather than promoting a fixed architecture stack with competing applications. "Oracle’s moves to acquire Siebel and PeopleSoft, like Microsoft’s acquisitions of Navision and Great Plains Software, is further evidence that large infrastructure software players are aggressively expanding into business applications,” said Dave Sikora, president and CEO, Pervasive Software. “While the trend may lead to more scale for the large vendors, it will drive those vendors to compete with their historical ISV partners and push for end-user lock-in. Increased single-vendor dependency hurts end-user flexibility by leaving companies with fewer viable choices and can lead to less innovation and higher prices over the long term," Sikora said.

In his presentation, Anderson noted the emergence of a market delivering more cost-effective and easy-to-use integration solutions. “ISVs, ASPs and integrators can deliver competitive advantage by taking advantage of embedding these solutions in their offerings,” Anderson said.

Pervasive provides data integration, data management and data migration products to thousands of ISVs worldwide, including many focused on serving diverse end users who have built rich applications without fear of “vendor lock-in.” Pervasive integration and migration solutions speed deployment and return on investment for users of both application service provider offerings and traditional software applications, directly addressing customer needs for robust applications with an affordable total cost of ownership. With open source database and cost-effective data integration, Pervasive remains an independent infrastructure value leader.

"Integration doesn't have to be difficult and expensive. It can be fast and affordable, if you have the right partners and tools. Embedded integration technology helps make rapid, affordable integration a reality," said Mike Hoskins, chief technology officer at Pervasive Software.

Pervasive Software remains focused on the infrastructure layer of the software solution stack and on delivering low total cost of ownership. With integration and data migration, Pervasive supports rather than competes with its thousands of worldwide ISVs, helping them provide "best-of-breed" business applications for a wide variety of customer needs. Pervasive also supports open source infrastructure choices to give users the opportunity to deploy world-class applications that allow for open access and independence from monolithic vendors who proclaim value through “one-stop shopping”. With a 20-year track record, flexible go-to-market models and comprehensive data management and integration capabilities, Pervasive is the independent vendor of choice for ISVs and customers.

Pervasive provides easy-to-use, cost-effective software, services, training and partner programs. These programs help ISVs, ASPs and systems integrators focus on creating value by leveraging their own core competencies and domain expertise in business applications, while leaving the data management, migration and integration challenges to Pervasive. The foundation of these partner services is a flexible business model for partners to OEM, resell, or co-market Pervasive technology for a comprehensive customer solution with low total cost of ownership. For more information, visit http://www.pervasive.com/solutions/isv.

About Pervasive Software
Pervasive Software (NASDQ: PVSW) provides data infrastructure software that helps companies unleash the value of their data investments. For more than two decades, Pervasive has delivered an enduring value proposition and the best combination of performance, reliability, functionality, and connectivity. Today Pervasive is leading its chosen markets by defining and accelerating the inevitable transition from high cost to high value. Pervasive's value is proven by the size, diversity and loyalty of its customer base, partners, and channels. Tens of thousands of customers in virtually every industry, in more than 150 countries around the world, rely on Pervasive to manage, integrate, analyze and secure their critical data. For more information, go to www.pervasive.com.

Cautionary Statement
This release may contain forward-looking statements, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All forward-looking statements included in this document are based upon information available to Pervasive as of the date hereof, and Pervasive assumes no obligation to update any such forward-looking statement.

All Pervasive brand and product names are trademarks or registered trademarks of Pervasive Software Inc. in the United States and other countries. All other marks are the property of their respective owners.

¹ “Industry Analyst Presentation” by Robert Anderson, Gartner, presented on 10/21/05