COUNTERPANE INTERNET SECURITY'S GROWTH DRAMATICALLY INCREASES IN SECOND QUARTER OF 2002

Counterpane expands its Managed Security Monitoring (MSM) customer base, penetrates new markets, and adds successful new resellers

CUPERTINO, Calif., July 30, 2002 - Counterpane Internet Security, Inc., developer and acknowledged leader of Managed Security Monitoring (MSM), today reported impressive growth for the second quarter of 2002. Despite the sluggish economy, the company experienced its greatest quarter for customer acquisition. The number of new Counterpane Certified Resellers (CCRs) has increased, the sales cycles have dropped dramatically, and the company's sales penetration strategy into the government sector is showing very strong results.

"We now have customers in over 25 countries including foreign companies and the overseas offices of US-based customers," said Tom Rowley, Counterpane's CEO. "We are very pleased with our continued growth and with the repeat business from our existing customers. It is an excellent indication that we are offering the right services for their information security needs."

Counterpane sells its monitoring service exclusively through its CCRs. Today Counterpane has over 65 regional, national, and global CCRs selling MSM worldwide. The company has more than doubled customer contracts through its CCRs in the last quarter, and has almost doubled the number of CCRs who are now closing customers.

"Our CCR strategy has given us the ability to penetrate new markets and to quickly bring new customers on-line," said John Bruce, Executive Vice President for Counterpane. "Our previous record for acquiring new contracts was set in December of last year, traditionally a strong time for security vendors. We grew 200% over any previous quarter. June was another record at 130% over December. Our government sector business in particular has increased considerably since we added CCRs who are focused on selling into that environment."

"Our technology and the services we developed continue to offer the most robust information network monitoring services available," said Rowley. "With Counterpane's assistance our customers have maintained a solid, uncompromised information infrastructure within their companies."

Counterpane's financial performance remained solid during this period of rapid growth. "While the economy continues to show signs of sluggishness, we have nearly doubled our revenues from Q2 of the previous year, and expect this trend to continue throughout the balance of 2002," added Rowley.

About Counterpane

Counterpane Internet Security, Inc. is the innovator and acknowledged leader in providing Managed Security Monitoring (MSM) services. MSM combines people and technology to safeguard businesses. Working from a network of technically sophisticated Secure Operations Centers (SOCs) and using progressive analysis tools, Counterpane has built the most advanced analysis, correlation, detection, and diagnosis technology, comprising a Sentry monitoring probe on the customer's network and the Socrates knowledge base inside the SOCs. Using this technology, Counterpane's expert Security Analysts are able to detect security incidents-both external intrusions and insider attacks-in real time, and tailor immediate, effective responses for its customers. The company is funded by Accel Partners, Amerindo Investment Advisors, Inc., Bessemer Venture Partners, Dell, Deutsche Bank, Goldman Sachs, and Morgan Stanley Dean Witter Equity Fund. Headquarters are located at 1090 La Avenida, Mountain View, California, USA. Phone: 650-404-2400, Fax: 650-903-0461, Website: www.counterpane.com.

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Counterpane is a trademark of Counterpane Internet Security, Inc. All other companies, brand names or products are trademarks or registered trademarks of their respective companies.