COUNTERPANE'S MARKET EXPANSION ACCELERATES AS MORE BUSINESSES SUBSCRIBE TO THEIR MANAGED SECURITY MONITORING SERVICE

Key e-commerce and net-centric Applications Developers validate that security is a critical success factor

SAN JOSE, Calif., March 27, 2001 - Counterpane Internet Security, Inc., developer and leading provider of Managed Security Monitoring (MSM), today announced that several new customers have signed service agreements for the Company's 24/7 monitoring, customer response and resolution, and intelligence data gathering and analysis services. Counterpane launched its MSM service in early 2000, and is uniquely positioned to capitalize on the expected growth in Internet security services spending projected to reach $17.2B worldwide by 2004 (IDC).

New Counterpane customers underscore the criticality of securing Internet-accessible corporate assets and represent a broad range of key e-commerce and net-centric applications developers, including: Currenex, Inc., MetraTech, United Devices, and VoteHere.

"We're gratified to be working with leading Internet players-from Fortune 1000 companies to well-funded, venture-backed enterprises," said Tom Rowley, Counterpane President and CEO. "They are all driving innovative business solutions made possible by the Internet. Like Counterpane, they realize that security is a top priority if they're to conduct e-business safely."

The new companies include:

• Currenex: Provides the first operational online global currency exchange service open to all institutional buyers and sellers worldwide
• MetraTech: Web services billing solutions that accelerate profitability for ASPs, conferencing, collaboration and enhanced communications services
• United Devices: Distributed computing software and services company that develops and manages the infrastructure required to aggregate idle computation, storage, and bandwidth resources on the Internet and corporate intranets
• VoteHere: Secure electronic and online voting for public and private sectors

These clients join a rapidly growing group that relies on Counterpane's MSM service. "Today's announcement, and nearly a dozen other recently-executed customer service agreements, continue to validate our Company's 'Internet Business Model' strategy and customer-acquisition activities. We are on target in our market development strategy and on track in meeting our business objectives," stated Rowley. (Note to editors: See addendum to this release for a description of the Counterpane Internet Business Model)

"Market leaders from within the Internet Business Model are naturally among the first to subscribe to Counterpane's MSM," continued Rowley "It gives them a competitive advantage and the peace of mind knowing they have significantly reduced the risk of doing business on the Internet, and have implemented the best possible measures to protect their customers and corporate assets."

"This market expansion validates the outsource opportunity identified by Counterpane to provide companies 24/7 access to expert security monitoring and response teams," said Cynthia Hillery, Vice President of Marketing for Counterpane. "Given the recent market predictions of IT staffing constraints, it is expected that companies will increasingly turn to security service providers to supplement and enhance their in-house security staffs and equipment."

About Counterpane

Counterpane Internet Security, Inc. was established in 1999 by entrepreneurial expert Tom Rowley and security technologist and author Bruce Schneier, to address the critical need for increased levels of security services. Centered around a network of sophisticated Secure Operations Centers, staffed by expert security analysts, the Company provides 24x7 monitoring, as well as penetration detection, and response. Counterpane's Managed Security Monitoring services enable e-business to be conducted safely. 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 in 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.

ADDENDUM
Counterpane Internet Business Model

Counterpane's business acquisition roadmap defines five different types of customers that, over time, will drive adoption of the Company's Managed Security Monitoring (MSM) service. New customers announced in recent months validate Counterpane's vision of how the market for its services will unfold.

• Internet Infrastructure Vendors: deliver critical networking, hosting, and managed services to customers who prefer to outsource some or all of their enterprises' e-business infrastructure
• Technology Platform Suppliers: those companies that offer web development tools to help organizations build their own Internet infrastructures
• Application Service Providers: companies that host mission-critical applications for customers that choose to focus on their core business strengths and expertise rather than dedicate resources to deploying and maintaining complex software
• Applications Developers: companies that produce a broad range of e-commerce and business-specific programs
• Enterprises: include end-user customers who want to enhance their security infrastructure with Counterpane's MSM service without devoting significant internal resources to achieve a comparable level of security