Counterpane Internet Security Announces Record First Quarter 2004

Managed Security Leader Increases New Business 285 Percent From a Year Ago

MOUNTAIN VIEW, Calif., April 27, 2004 - Counterpane Internet Security, Inc., the leader in managed security services, today announced record results for the first quarter of 2004. Counterpane closed the first quarter with new business up 285 percent from a year ago. Strong growth occurred in both customer renewals and new customer acquisitions, including a top five U.S. retailer, several major health care providers and a top ten worldwide energy producer.

Value added services were a prime contributor to continued increases in Counterpane's new and recurring revenue from a year ago. While Counterpane's core Managed Security Monitoring expertise continued to be a key factor in winning against the competition, the majority of new contracts were signed by customers choosing multiple services from Counterpane's Enterprise Protection Suite™. Specifically, Vulnerability Scanning, outsourced IDS and firewall services, and direct intervention of attacks through Counterpane's Active Response service were selected by 64 percent of new customers.

"Security monitoring is a complex managed service to deliver. Our expertise in Managed Security Monitoring delivery not only serves as a strong differentiator, but also strengthens the value of our complementary services," said Paul Stich, president and CEO of Counterpane. "Counterpane has made amazing headway over the past year leveraging our investments in technology, global expansion and industry experts to hit this milestone. Our outlook remains positive moving forward, as the need for better protection continues to increase."

According to the Yankee Group, managed security services revenue is set to grow from $1.5 billion in 2002 to $3.7 billion in 2008. The growth that Counterpane, along with the managed security services market, is experiencing is due to a combination of market forces. The primary deciding factor for Counterpane's customers to outsource security is to gain the expertise to effectively monitor and manage the growing complexity of enterprise networks with simultaneous budget reductions and growing threats of attack. Counterpane reported over 70,000 attempted attacks across its customer base in 2003 alone.

About Counterpane Internet Security
Counterpane is the leader in Managed Security Services, providing global enterprises with the highest level of corporate IT asset protection in the industry. Counterpane alleviates security and regulatory compliance concerns by transforming the challenges posed by deploying complex, global enterprise networks into strategic business advantage. The Counterpane Enterprise Protection Suite™ is a sophisticated suite of scanning, management and consulting services based on Counterpane's unparalleled Managed Security Monitoring service. Combined with its renowned security analysts and global visibility, Counterpane simplifies security by providing a single source for protection and compliance. The company is privately held and headquartered in Mountain View, Calif.

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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.