Motive Achieves Customer Wins, Product Successes, Expansion of Indirect Sales Channel in First Half of 2006

AUSTIN, Texas, Aug. 8, 2006 -

Motive, Inc., a leading provider of broadband management software, today announced that in the first half of 2006 it continued to enhance its position with communications service providers as demonstrated by customer wins, product successes and expansion of its indirect sales channel. While these successes support Motive’s business strategy, investments in the company’s new business model, channel strategy and development of intellectual property will continue to impact financial results.

As of June 30, 2006, Motive remains debt free with a cash balance of $44.6 million. Additionally, the company will take a non-cash charge of approximately $64 million in the year ended December 31, 2005, associated with Motive’s annual impairment analysis of goodwill and intangibles.

“With so many changes to the business, we are pleased with the progress we have made this year,” said Alfred Mockett, chairman and chief executive officer. “Notwithstanding the dedicated effort being put into our ongoing restatement process, we have remained sharply focused on operations and delivering value to customers.”

“With proven products, sales execution and professional services, we continued to grow our base among traditional wire line customers, as well as providers of next-generation IP-based services.”

Mr. Mockett said a key to Motive’s accomplishments during 2006 has been its Home Device Manager (HDM) product, a joint development with Alcatel. HDM enables providers of Broadband 2.0 services such as IPTV, VoIP and advanced home networking to remotely activate, support and upgrade customer premises equipment (CPE) in consumer homes, thus streamlining the delivery and ongoing management of triple play services.

In the first half of the year, six customers in North America and Europe licensed HDM, including three new customers, and two of the world’s top ten broadband service providers. In addition, the company continues to be involved in a growing number of device management pilot and proof-of-concept projects, verifying the strength of Motive’s solution in fulfilling demand for next-generation broadband management solutions.

Motive also continued to strengthen its position with service providers in cable, DSL and satellite through sales of its core products for high-speed data. In the first half of the year, the company added four new customers and extended product usage for two existing customers.

Motive continues to utilize indirect sales channels to expand its customer base among tier-two and tier-three service providers in Western Europe and emerging geographies such as Eastern Europe, Asia-Pacific and South America.

Notwithstanding the company’s investments in its new business model, channel strategy and the development of intellectual property, Mr. Mockett said Motive will continue to aggressively manage expenses.

“The company continues to be too dependent on ‘lumpy’ cash flow derived from large transactions, making quarterly cash-flow performance highly variable,” he added. “Such large transaction receipts, anticipated in the third quarter, should bring the company closer to a cash neutral position for the quarter.”

“I am confident about Motive’s future,” said Mr. Mockett. “We have clearly identified our strategy and have the people to meet our objectives. We have a strong board and management team, including the appointments of a new chief operating officer, chief financial officer and general counsel, also announced today.”