London, UK – ArcSight, Inc. (Nasdaq: ARST), a leading provider of security and compliance management solutions that intelligently mitigate business risk for enterprises and government agencies, today announced the pricing of its initial public offering of 6,861,919 shares of common stock at $9.00 per share. Of the 6,861,919 shares of ArcSight’s common stock being offered to the public, 6,000,000 shares are being offered by ArcSight and 861,919 shares are being offered by certain selling stockholders. The offering is expected to close on 20th February 2008.

The underwriters have been granted a 30 day option to purchase up to 900,000 additional shares from ArcSight and 129,287 additional shares from the selling stockholders at the initial public offering price less the underwriting discount to cover over allotments, if any. ArcSight’s common stock will be listed on the Nasdaq Global Market under the symbol “ARST” and will begin trading on 14th February 2008.

Morgan Stanley & Co. Incorporated is acting as sole book running manager, Lehman Brothers Inc. is acting as joint lead manager, and Wachovia Capital Markets, LLC and RBC Capital Markets are acting as co managers.

A registration statement relating to this offering was filed with and declared effective by the Securities and Exchange Commission. This offering is being made solely by means of a prospectus. A copy of the prospectus relating to this offering may be obtained from Morgan Stanley & Co. Incorporated, 180 Varick Street, New York, NY 10014, Attn: Prospectus Department; by calling +1 866.718.1649; or by emailing prospectus@morganstanley.com.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.