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 1998

CAMBRIDGE, MA., February 3, 1999 - ON Technology Corporation (Nasdaq: ONTC) today announced revenues and earnings for its fourth quarter ended December 31, 1998. Revenues for the fourth quarter were $5,575,000, an increase of 34% over revenues of $4,161,000 reported for the quarter ended December 31, 1997. Net loss for the quarter was ($1,566,000) or ($0.13) per share compared to a net loss of ($10,991,000) or ($0.90) per share for the same period last year.

Revenues for the year ended December 31, 1998, were $20,010,000, a decrease of 9% from total net revenue reported for the year ended December 31, 1997, after adjusting for product lines sold or discontinued in 1997, due to a previously expected decline in groupware revenues for the year. When compared to total revenues reported for the year ended December 31, 1997, the decrease was 51%. Net loss for the year of ($215,000) or ($0.02) per share compares favorably to the net loss of ($34,772,000) or ($2.88) per share reported for the year ended December 31, 1997. Excluding tax adjusted extraordinary items the net loss for the year ended December 31, 1998 was ($6,733,000) or ($0.55) per share, which compares favorably to the net loss of ($7,085,000) or ($0.59) per share reported for the year ended December 31, 1997.

"We are particularly encouraged by the 245% growth in the software revenue component of our ON Command CCM product offering in the fourth quarter of 1998, when compared to the same period last year, which far exceeded the 1998 market growth estimates of industry analysts for the desktop management market," said Herman DeLatte, President and Chief Executive Officer of the company. "During 1998 our direct sales efforts won over 100 new ON Command CCM corporate accounts, including Citigroup, Republic Industries, Covington & Burling and ABC TV Sales, by delivering substantial returns to our customers who used ON Command CCM for new desktop deployment and PC configuration management projects," said DeLatte.

"We are also pleased to have expanded our alliance development efforts in the fourth quarter by announcing a formal alliance with Dell Computer Corporation (Nasdaq: DELL) through becoming a member of the Dell OpenManage Alliance, which recognizes ON Command CCM as a preferred solution for configuration management and software deployment," said DeLatte.

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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