Q3 Update

Immediate Release: 25 October 2004                                             

                                  SOPHEON PLC                                  

                                  ('Sopheon')                                  

                         THIRD QUARTER TRADING UPDATE                          

In accordance with the requirements of the Euronext Amsterdam stock exchange,
Sopheon plc issues its trading update for the third quarter of 2003 together
with further information on corporate developments.

During the third quarter, with the successful conclusion of the balance sheet
restructuring and the continued availability of over 90% of the group's €10m
equity line in hand, Sopheon has focused corporate activity on building for the
longer term by securing partnerships on two fronts: strategic alliances in key
markets, and distribution partners in territories outside the existing sphere
of operations. As described below and more fully in other announcements, this
focus has resulted in further collaboration with Siemens, and the opportunity
to be part of Microsoft's Collaborative Product Development ('CPD') program. In
addition, a project to migrate Sopheon's hospital protocol management system to
the Accolade platform is nearing completion, alongside further validation for
Accolade's use for clinical trials management, a key pillar of product
development in healthcare. To underpin Sopheon's development efforts arising
from these initiatives, Sopheon's board has approved a controlled expansion in
R&D resources.

Operationally, we have focused on refilling sales pipelines following the
success of the second quarter, and on building business with existing
customers. A good example of progress in this area is Parker Hannifin
Corporation ('Parker') where Sopheon has assisted with the rollout of Accolade
under an enterprise-wide license agreement concluded in June. As described in a
further non-regulatory announcement made today, Parker reviewed three lifecycle
management software solutions and selected Sopheon based on such considerations
as its ease-of-use, speed of deployment, built-in best-practices content,
capacity to scale, and ability to further leverage Microsoft technologies
already prevalent at Parker. In addition, although the third quarter is
traditionally quiet in the software applications industry, we have continued to
secure new business, with three new customer commitments to purchase a license
and nine pilot, consulting or hosting orders, including extension activity.
Consistent with the partnership focus, two geographical distribution
partnerships were also concluded in the period.

As announced in detail last week, the collaboration with Siemens, supported by
Airbus and Boeing, introduces a web-based application to the aviation industry
to promote standardization around Radio Frequency Identification (RFID) use.
Sales will be subscription-based and will therefore build a sustainable,
recurring revenue base over time.

Microsoft's CPD Program, announced today at the 2004 Product Development and
Management Association (PDMA) conference in Chicago, is designed to help
companies leverage investments in Microsoft technology by using it to improve
product development success rates. Microsoft and Sopheon will team to develop,
promote and deliver solutions based on integrated technologies. Other CPD
participants are Hewlett Packard, Pcubed, Immedient and UGS. As part of this
initiative, Sopheon has today noted in a separate announcement at PDMA that it
will integrate Microsoft Project Server 2003 and SharePoint Portal Server 2003
into Accolade, to further enhance collaborative, information-sharing and
enterprise deployment capabilities. Accolade is built on Microsoft technology
and since inception, has leveraged tools such as Office, NetMeeting and Project
to facilitate information sharing, ease-of-use and fast implementation. The
expanded integration of Microsoft technologies will increase Accolade's
capacity to leverage work repositories and will strengthen its ability to scale
enterprise-wide.

Our sales teams are busy with a substantial number of opportunities slated for
closure in the fourth quarter, and December in particular, and we have
announced partnerships and alliances that should directly impact our ability to
close new business. We continue to be positive about the prospects for
conversion of our pipeline, and upside scenarios for the year remain compatible
with expectations. Nevertheless, our ambitions for the final quarter are high
and if achieved would represent annualized growth well in excess of that
achieved in the first half year. Accordingly, while we continue to make
significant strategic progress, we would emphasize the sensitivity of our
periodic reported performance to the timing and value of individual sales
events.

Sopheon's Chairman, Barry Mence said:

'Today's announcements on our joint activities with Microsoft and our
enterprise license sale at Parker demonstrate a real vote of confidence in our
future, and reinforce our strategic technology bias. Sopheon must balance its
limited resources between investing for the future and building current
business, but we are nevertheless adding development capacity, underscoring our
belief in our potential.'

For further information contact:

Barry Mence, Chairman   Sopheon plc                  Tel : + 44 (0) 1483 685   
                                                     735                       
Arif Karimjee, CFO                                                             
                                                                               
Adam Reynolds           Hansard Communications       Tel : + 44 (0) 207 245    
                                                     1100                      
Andrew Tan                                                                     
                                                     + 44 (0) 7957 203 685     
                                                                               
Barbara Jansen          Citigate First Financial     Tel : + 31 (0) 205 754 010

About Sopheon

Sopheon (LSE:SPE) is an international provider of software and services.
Sopheon's Accolade® product development system automates, gate- or phase-based
product development (PD) processes and provides strategic decision support that
allows companies to improve innovation, cut product development spending waste
and shorten time to market. Sopheon's Monitor software operates as a 'reading
robot' that monitors, filters, analyses and pushes relevant content to
healthcare and engineering professionals to enable effective compliance with
protocols, standards and regulations. Sopheon is listed on the AIM market of
the London Stock Exchange and on the Euronext in the Netherlands. For more
information, please visit www.sopheon.com.