webMethods Announces OEM Agreement with OAT

Extended Partnership Delivers Proven Solution for RFID Integration

FAIRFAX, Va. and Waltham, Mass. – September 28, 2004 – webMethods, Inc. (Nasdaq: WEBM), the industry’s first Web services infrastructure company, and OATSystems, Inc., the recognized RFID framework leader, today announced an OEM agreement in which webMethods has licensed the OAT Foundation Suite to provide a comprehensive RFID framework solution to its customers. webMethods will make it easier for customers to add RFID technology to their existing infrastructures by embedding the OAT Foundation Suite into the latest version of the webMethods RFID Starter Pack™.

webMethods will OEM the OAT Foundation Suite to provide customers with a complete RFID framework solution that enables them to leverage RFID technology to derive strategic operational benefits from their automated supply chain operations. The OAT Foundation Suite is a proven, industrial-strength solution for centrally managing an RFID deployment across manufacturing, distribution and retail operations.

“OAT has deployed RFID solutions for some of the world’s largest businesses because they require a solid foundation that can support their RFID initiatives as they grow in size and complexity,” said Prasad Putta, CEO, OATSystems, Inc. “Integrating RFID data with enterprise applications and trading partners is a key element to any RFID solution. By embedding the OAT Foundation Suite into webMethods’ leading integration technology, customers will have the ability to incorporate their RFID initiatives within an integration infrastructure to ensure that they’re delivering the right product to the right customer at the right time. By extending this partnership, webMethods will be able to provide customers with a solid foundation to successful RFID implementations.”

webMethods' comprehensive approach to enabling integration of RFID data with information technology systems and resources allows customers to optimize their supply chain by automating a wide range of shipping, receiving, and inventory processes; more accurately follow the flow of goods from production to the store shelf; and, in cases where product tracking is critical, such as product recalls, save time and potentially minimize losses.

The webMethods RFID solution enables companies to seamlessly integrate their RFID data with core ERP applications, warehouse management systems and databases in order to automate their supply chain and achieve increased efficiencies in their business processes. The webMethods RFID Starter Pack continues to include one week of webMethods' professional services and a pre-built sample business process package to accelerate customers' deployment of their RFID projects.

“The OEM agreement with OAT is an extension of the work that we have already done together, including the development of a live RFID pilot and the momentum we have gained among our joint customers in planning near-term RFID implementations,” said Tom Roberts, vice president, Industry Solutions, webMethods, Inc. “webMethods continues to be the only pure-play integration vendor showcasing full commitment and leadership to the RFID market. Through our status as a founding subscriber to EPCglobal, our partnerships with leaders in RFID including OAT, and the initial success of our RFID solution with some one of the world’s largest organizations, webMethods is helping to eliminate the technology barrier for customers to implement RFID solutions.”

About OAT

OATSystems, Inc. is the recognized RFID framework leader, with software that empowers businesses to achieve competitive advantage from radio-frequency identification (RFID). As pioneers in the development of RFID technology, OAT has been setting the standard in RFID for over half a decade and is responsible for industry firsts that include the largest scale and largest cope of deployments, as well as the most innovative approaches to providing enterprise-wide RFID solutions. OAT’s multinational client base, which includes companies such as Hewlett-Packard and Gillette, consists of over 30 customers in retail, CPG, consumer electronics, manufacturing, life sciences, aerospace and defense. Headquartered in Waltham, MA, OAT has offices in Chicago, London and Bangalore and is on the Web at www.oatsystems.com.

About webMethods, Inc.

webMethods (Nasdaq: WEBM) is the industry’s first Web services infrastructure company. webMethods’ innovative integration, Web services, portal and analytic solutions enable more than 1,200 enterprise customers worldwide to run, measure and optimize their business. Recognized in 2003 as the fastest growing software company in North America by Deloitte, webMethods is headquartered in Fairfax, Va., with offices throughout the U.S., Europe, Asia Pacific and Japan. More information about the company can be found at http://www.webMethods.com.

webMethods is a registered trademark, and Global Business Visibility and the webMethods RFID Starter Pack are trademarks, of webMethods, Inc. in the USA and certain other countries. All other company and product names are the property of their respective owners.

This press release may contain various remarks about the future expectations, plans and prospects of webMethods that constitute forward-looking statements for purposes of the safe harbor provisions of U.S. securities laws. The actual results of webMethods may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed under the heading "Factors That May Affect Future Operating Results" in the Business section of webMethods' Form 10-K for the year ended March 31, 2004 , and in the “Management’s Discussion and Analysis” section of webMethods’ Form 10-Q for the quarter ended June 30, 2004, which are on file with the U.S. Securities and Exchange Commission and may be accessed at www.sec.gov or webMethods' investor relations web page at www.webMethods.com/investors/. webMethods disclaims any obligation to update or correct any forward-looking statements made herein due to the occurrence of events after the issuance of this press release.