F I N A N C I A L

For Immediate Release
Contact:   John M. Bogdan, Chief Financial Officer
ON Technology Corporation
(617) 692-3160

ON TECHNOLOGY ANNOUNCES REVENUES AND EARNINGS FOR ITS THIRD QUARTER OF 1998

Cambridge, Ma., October 20, 1998 - On Technology Corporation (Nasdaq: ONTC) today announced revenues and earnings for it's third quarter ended September 30, 1998. Revenues for the third quarter were $5,250,000, an increase of $240,000 or 4.8% over revenues of $5,010,000 reported for the second quarter ended June 30, 1998. Net loss for the quarter was ($1,250,000) or ($0.10) per share, which compares favorably to the net loss of ($1,736,000) or ($0.14) per share reported for the second quarter of 1998.

Highlights in Q3 include:

  • On October 6, 1998 ON Technology announced the Y2K JumpStart ™ program as a unique solution for automating Y2K desktop testing, updates and roll-outs of new Y2K-compliant PC's. Y2K JumpStart leverages the automated deployment and continuous configuration capabilities of ON Command CCM ™ (Comprehensive Client Manager).

  • During the quarter ON Technology Corporation joined the Dell OpenManage Alliance ™ which is designed to deliver advanced "Managed PC" solutions to Dell Computer Corporation (Nasdaq: DELL) enterprise customers. Under the alliance, ON Command CCM ™ (Comprehensive Client Manager) has been chosen by Dell as a recommended configuration management and software deployment solution for the Dell OpenManage Alliance ™.

"We are particularly encouraged by the 266% growth of the software revenue component of our ON Command CCM product offering, when compared to the third quarter performance of last year", said Herman DeLatte, President and Chief Executive Officer of the company. "We are also very pleased to have been chosen by Dell as a recommended configuration management and software deployment solution for their OpenManage Alliance, and to have announced our Y2K JumpStart program and to have opened new offices in Chicago, San Francisco and Oslo in the quarter."

ON Technology Corporation is a publicly held company based in Cambridge, Massachusetts. Founded in 1985, ON Technology provides open and scalable solutions that result in financial, operational and strategic benefits for enterprise networks. More information about ON Technology can be found at www.on.com.

Forward Looking Statement: Statements contained herein that are not historical statements (including but not limited to, statements concerning estimates of future revenues, operating expenses and product introductions) constitute forward-looking statements and are made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The following risk factors, among other factors (including the accuracy of the Company's internal estimates of revenue and operating expense level), may cause the Company's actual results to differ materially from the results stated in such forward-looking statements: variability of the Company's quarterly operating results; rapid technological change in the software industry; competition; product development; inclusion of groupware applications and certain client management software features in system software and applications suites; dependence on key customers; potential acquisitions; marketing products through distributors and resellers; protection of proprietary technology; international revenue; dependence on key personnel; possible volatility of stock price; and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission.

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