Callidus Software Strengthens Its Commitment to EIM Market Leadership

Enterprise Incentive Management (EIM) Leader Acquires SourceCode for TruePerformance and Promotes Daniel Welch to SeniorVice President and General Manager

Bracknell, Berkshire January 21, 2004 Callidus Software(R),the industry leader in Enterprise Incentive Management (EIM)solutions, today announced it has acquired the source code forits TruePerformance solution, a total compensation managementsoftware that extends the benefits of EIM beyond sales andchannel to all employees across the entire organization. Thisacquisition rounds out the TruePerformance product offering,propelling it further into the EIM marketplace and affirms thecompanys commitment to market leadership. To ensure it capturesthe large revenue opportunity, the company also announced todaythe promotion of Daniel Welch to Senior Vice President andGeneral Manager for TruePerformance, European Sales and Service.

Released in February 2003, Callidus TruePerformance providesthe planning, analysis and performance management functionsneeded by global enterprises to access and administer variablecompensation plans. With TruePerformance, Callidus is addressingthe major pain points of customers that need to successfullyalign their global compensation plans to business strategies,align employee pay to performance, forecast awards and payouts,define budgets and control costs. TruePerformance was quicklyrecognized as a leading solution and was recently named by HRExecutive Magazine as HR Product of The Year for itsintuitiveness and robust modeling and drill-down capabilities.

To further drive customer adoption of TruePerformanceproducts, Callidus announced today the promotion of Dan Welch toSenior Vice President and General Manager for TruePerformance,European Sales and Service. Mr. Welch who joined Callidus inearly 1998, has been a member of the executive team and has beeninstrumental in driving the companys success. While at Callidus,Mr. Welch has held a number of senior management positions, mostrecently as vice president of Client Services. Under hisleadership, Callidus professional services organizationsuccessfully implemented Callidus solutions at over 100 globalcorporations. In his new role, Mr. Welch will be responsible forthe development, support and delivery of CallidusTruePerformance product, and will spearhead all sales andservices in Europe.

The purchase of source code for TruePerformance is a naturalnext step in the evolution of our suite of products, said ReedTaussig, president and CEO of Callidus Software. We arecommitted to strengthening our product offerings to extendCallidus value proposition to customers and give them thecompetitive advantage and bottom-line results they need. Dansproven track record of success coupled with his unique expertiseand keen understanding of the EIM market makes him the bestchoice to lead the development and delivery of ourTruePerformance product in Europe.

About Callidus Software Founded in 1996, Callidus Software(http://www.CallidusSoftware.com) is a leading provider ofenterprise incentive management (EIM) systems to globalcompanies across multiple industries. Callidus' EIM systemsallow enterprises to develop and manage competitive incentivecompensation linked to the achievement of targeted businessobjectives. Through its TrueComp Grid (TM) architecture, Callidusdelivers the industrys only EIM solution that combines the powerand scalability of grid computing with the flexibility of rules-based interface. Customers/Partners include Airborne Express,Inc., Allstate, Apple Computer, AOL Time Warner Corporation,AT&T Wireless, Citizens Bank, CUNA Mutual, DIRECTV, Dun &Bradstreet, IBM, Intuit, JP Morgan Chase & Co., Pennzoil-QuakerState Company and Sun Microsystems. Callidus is publicly tradedon the NASDAQ under the symbol CALD.

1998-2004 by Callidus Software Inc. Callidus Software logosand all other Callidus Software product or service names areregistered trademarks or trademarks of Callidus Software Inc.All other trademarks or registered trademarks belong to theirrespective companies. All Rights Reserved.

Contacts:

Daniel Welch Callidus Software +44 (0) 1344 666029dwelch@callidussoftware.com

Wendy Marshall WMPR Consultancy +44 (0) 20 8560 1437wendy@wmpr.com

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