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NetScreen Leads in Security Appliance Market Share Growth, According to Market Research Report

Report Also Ranks NetScreen as Market Leader for Products Priced under $1,000

Sunnyvale, CA - January 5, 2004 - NetScreen Technologies, Inc. (Nasdaq: NSCN) today announced that an IDC report, entitled "Worldwide Quarterly Security Appliance Server Tracker" (Source: IDC's Worldwide Quarterly Security Server Appliance Tracker, Q3 2003), reveals that NetScreen was the only security appliance vendor among the top 5 to grow worldwide factory revenue market share year-over-year. NetScreen's 91 percent year-on-year increase in factory revenue resulted in a market share gain of more than five percentage points between Q3 2002 and Q3 2003.

Additionally, the report indicates that NetScreen took the lead position in the security appliance market for products priced under $1,000 by gaining 2.1 percentage points in factory revenue market share between Q2 2003 and Q3 2003, while the prior quarter's leader lost 4.8 percentage points. According to the report, NetScreen also maintained its worldwide factory revenue security appliance market share leadership positions in the $50,000 to $99,999 and over $100,000 price-banded product segments for the third quarter of 2003.

IDC's categorization of the security appliance market includes firewall, virtual private network (VPN), intrusion detection and other security categories. NetScreen attributes its gains in the under $1,000 segment to the great value offered by its purpose-built appliances for broad security protection in enterprise remote and telecommuter environments, the NetScreen-5GT, -5XT and -5XP, that integrate firewall, IPSec VPN, traffic management, denial of service protection.

"NetScreen's success in the market demonstrates enterprise customers' recognition of the value of NetScreen's easy-to-use, purpose-built appliances that offer advanced security functionality as well as operational and cost advantages for highly distributed environments," said David Flynn, vice president of marketing at NetScreen. "These results underscore that our products are meeting real customer needs from the core of their networks to the perimeter and remote sites."

About NetScreen Technologies

NetScreen Technologies, Inc., is a leading developer of network security and access solutions for enterprises and carriers worldwide. NetScreen's solutions offer customers multiple layers of network and application-level protection in purpose-built appliances and systems that optimize performance and reduce total operating costs. NetScreen is located at 805 11th Ave., Sunnyvale, Calif., 94089. More information on NetScreen's products can be found at http://www.netscreen.com or by calling toll free at 1-800-638-8296.

NetScreen and the NetScreen logo are trademarks of NetScreen Technologies, Inc. in the United States and other countries. Other trademarks are the property of their respective owners.

This press release contains forward-looking statements about events and circumstances that have not yet occurred. For example, words such as “will”, “expects”, “provide”, “continue”, and “allows”, or other statements in the future tense, are forward-looking statements. Actual outcomes and results may differ materially from expectations in this press release due to a number of risks and uncertainties. Such risks and uncertainties include whether the market for security products will grow as projected, if at all, whether demand for NetScreen products will continue, whether new products, if and when introduced, will be successful and whether products will perform as expected.