ORLANDO, Fla., MERCURY WORLD, Nov. 9, 2004 -- Today, Mercury Interactive Corporation (Nasdaq: MERQ), the global leader in Business Technology Optimization (BTO), announced results from a research survey conducted for Mercury by the Economist Intelligence Unit, and a study commissioned from IDC on the top Information Technology (IT) challenges and priorities. Each report details the IT impact from compliance mandates, strategic sourcing, and application complexity.

The Economist Intelligence Unit report yields data for 21 individual countries throughout Asia Pacific, Europe, and the Middle East. In addition, the report reveals the top IT investment areas and priorities for a cross-section of industries including finance, manufacturing, high-technology, pharmaceuticals, retail, distribution, telecommunications, utilities and business services.

This report is based on a global survey of more than 750 IT executives and is titled, "Driving Business Value from IT: Three key optimization challenges for CIOs." It provides insights into the role of business technology optimization strategies in helping companies to address top IT challenges and initiatives. Key findings include:

-- 64 percent of survey respondents cited IT quality as an important or critical challenge for IT management;

-- Respondents believe the key benefits of compliance are accuracy of financial reporting (61 percent), improvements in their visibility of enterprise risk (56 percent), and better IT governance (50 percent), and;

-- One in every three respondents from large companies (more than US$8 billion) listed application management as their number one investment priority -- and half of all those surveyed ranked application management as their first or second priority in investment plans.

"Increased complexity in the application environment, the impact of regulatory compliance, and new models for IT outsourcing create the need for tighter alignment between IT strategy and business results," said Gareth Lofthouse, European director for executive services at the Economist Intelligence Unit.

The IDC study, based on its global research data, is titled "Optimizing the Business Value of IT - Three Key Challenges." The IDC findings detail IT's ability to manage risk from strategic sourcing initiatives, compliance mandates, and application complexity. IDC findings include:

-- More than 40 percent of IDC survey respondents cited custom, Web, and legacy application development as IT services planned for offshoring;

-- In North American companies with more than 1,000 employees, 44 percent are developing business processes and applications to address compliance requirements, and 27 percent have an IT executive leading the overall compliance efforts, and;

-- The top three reasons why applications fail are lack of project management processes, poor application performance, and failure of applications to evolve with the business.

"The pressure on IT to deliver greater value to the business with flat, or nearly flat budgets is forcing IT executives to rethink the way they prioritize, deliver and manage business applications," said Melissa Webster, research director at IDC. "IT organizations that adopt best practices to improve their operational process will be better able to allocate their IT resources and deliver greater business value."

"This insightful research uncovers the forces behind the rapid adoption of BTO," said Christopher Lochhead, chief marketing officer at Mercury. "Compliance and governance, application change and complexity and new sourcing models are driving the change in the IT agenda for 2005."

Mercury will be making detailed data from the reports available to journalists upon request.

ABOUT MERCURY

Mercury Interactive, the global leader in business technology optimization (BTO), is committed to helping customers optimize the business value of information technology. Founded in 1989, Mercury conducts business worldwide and is one of the fastest growing enterprise software companies today. Mercury provides software and services to govern the priorities, people, and processes of IT; deliver and manage applications; and integrate IT strategy and execution. Customers worldwide rely on Mercury offerings to improve quality and performance of applications and manage IT costs, risks and compliance. Mercury BTO offerings are complemented by technologies and services from global business partners. For more information, please visit http://www.mercury.com.

NOTE: Mercury, Mercury Interactive and the Mercury logo are trademarks or registered trademarks of Mercury Interactive Corporation or its subsidiaries in the United States and/or other countries. All other company, brand and product names are marks of their respective holders.

SOURCE Mercury Interactive Corporation

Web Site: http://www.mercuryinteractive.com