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 FOURTH QUARTER OF 1997

CAMBRIDGE, MA., February 3, 1998 - ON Technology (Nasdaq: ONTC) today announced revenues and earnings for its fourth quarter ended December 31,1997. Revenues for the fourth quarter were $4,161,000, a decrease of 31% from revenues reported for the quarter ended December 31, 1996, after adjusting for the impact of the Company's agreement to sell certain product lines to Elron Software. When compared to total revenues reported for the quarter ended December 31, 1996, the decrease was 70%. Net loss for the quarter was ($4,581,000) or ($0.37) per share after excluding non-recurring restructuring charges totaling $6,410,000, or $0.53 per share after tax.

Revenues for the year ended December 31, 1997, were $41,282,000, a decrease of 6% from revenues reported for the year ended December 31, 1996, after adjusting for the impact of the Company's agreement to sell certain product lines to Elron Software. When compared to total revenues reported for the year ended December 31, 1996, the decrease was 20%. Excluding tax adjusted acquisition, restructuring and inventory related charges of $27,687,000, or $2.29 per share, the Company recorded a net loss for 1997 of ($7,085,000) or ($0.59) per share, down from net income of $4,886,000, or $0.40 per share after excluding tax adjusted acquisition, restructuring and inventory related charges for 1996.

On July 29, 1997, ON Technology announced that it would realign its corporate strategy and restructure its organization to focus on the growth of its new enterprise client management software business. ON de-emphasized investment in new customer acquisition for its Network Management and Network Security business while it increased investment in building infrastructure to establish a revenue foundation for its new ON Command CCM product.

On October 29, 1997, ON Technology announced an agreement to sell, subject to shareholder approval, its Network Management and Network Security business along with the related marketing systems and organization to Elron Software Inc. for $12 million in cash plus a $1.5 million contingent payment based on performance. The sale includes the ON Guard Firewall, the ON Guard Internet Manager, ON's SofTrack marketing license, and the Editor's Choice Network Management Catalog. The transaction will allow the Company to focus its efforts on the enterprise client management software products. It will also give the Company additional liquidity to fund the growth of this business. When the transaction is complete, ON will consist of two business units, Groupware, which markets e-mail and group scheduling products, and ON Command CCM.

"1997 was a year of transition," said Herman DeLatte, ON's new Chief Executive Officer. "While the market for many of the Company's traditional products changed significantly, we identified a new opportunity in enterprise software, ON Command CCM. The restructuring we undertook in 1997 reflects these changes and opportunities, and gives us a firm foundation for moving the Company forward, based upon a technology and enterprise sales strategy," said DeLatte.

A publicly held Company trading under the symbol ONTC, ON Technology's worldwide headquarters are located in Cambridge, Massachusetts. To receive information about ON Technology or any of its offerings, browse the Company's World Wide Web site at http://www.on.com, send an e-mail inquiry to info@on.com, or call (617) 374-1400.

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 workgroup utilities in system software and applications suites; dependence on emergence of workgroup utilities market; the Company's free trial marketing strategy; 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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