PARTNERWARE SECURES $32 MILLION IN SECOND ROUND FUNDING FROM WORLD-CLASS INVESTORS

Polaris Venture Partners and Lucent Venture Partners co-lead investment in PRM company

AUSTIN, Texas - July 10, 2000 - Partnerware, the pioneer and leading provider of B2B Partner Relationship Management (PRM) solutions, today announced the completion of the company's $32 million second-round funding. Polaris Venture Partners, recently named in the top 10 list of Forbes ASAP's ranking of venture capital firms, and Lucent Venture Partners co-led the investment. New investors also include Avaya Communication, Weiss Peck & Greer, DRW Venture Partners, an affiliate of Dain Rauscher Wessels; and Wilson, Sonsini, Goodrich & Rosati. Also participating are first-round investors Adams Capital Management, The Edgewater Funds, Patricof/Adams Fund III and Inman Ventures.

Building on its first-round funding of $8.5 million received last fall, Partnerware will use the $32 million to extend its sales and marketing reach and launch several new products. As part of its expansion, Partnerware expects to grow its staff by 100 percent this year and open several field offices.

In conjunction with the funding, Tom Herring, partner, Polaris Venture Partners, and Maureen Lawrence, partner, Lucent Venture Partners, will join Partnerware's board of directors. The Partnerware board of directors currently includes Mark McManigal, partner, The Edgewater Funds; Jerry Sullivan, partner, Adams Capital; Admiral Bobby R. Inman, founding partner, Inman Ventures; and Eric Hills, CEO, Partnerware.

"Partnerware's proven technology and management team have set the standard for PRM. The company's potent combination of out-of-the-box functionality and flexible configuration provide a real competitive advantage for its clients," said Tom Herring, partner, Polaris Venture Partners. "We see unlimited potential in this space and are looking forward to helping Partnerware extend its market leadership."

"In addition to its blue-chip customer base, Partnerware's ability to innovate and partner with key technology companies will speed adoption of its solution," said Maureen Lawrence, partner at Lucent Venture Partners. "We also believe synergies exist between Partnerware's vision and capabilities and the growing eBusiness marketplace."

"Partner Relationship Management is widely recognized as a strategic business initiative for all companies, not just high-tech channel vendors," said Eric Hills, Partnerware's president and CEO. "Our customers, many of whom are Fortune 1000 firms, are counting on us to enable them to get ahead of their competition with PRM. With this kind of backing, we can provide all the help they need, and can also take PRM to new markets. We are very pleased to have such strong investment partners join the Partnerware team, and look forward to leveraging these new relationships to deliver more value to the market."

Partner Relationship Management is an eBusiness strategy which uses shared extranet applications to streamline sales and marketing business processes and achieve a greater speed-to-market through partners. International Data Corporation estimates that the PRM market will reach nearly $2 billion in revenue by 2003. Partnerware's leading PRM application, Partnerware eXtended Enterprise 2000, enables real-time collaboration among vendors and their partners for developing, launching, tracking and refining partner programs and operations.

About Polaris Venture Partners

Polaris Venture Partners is a group of experienced early-stage investors with a history of backing successful entrepreneurs in companies developing information and medical technology. With over $1 billion under management, Polaris provides deep domain experience, industry contacts, and partnership to technology entrepreneurs. Polaris-backed companies include Akamai Technologies, Allaire Corporation, Aspect Medical, Classifieds2000, deCODE Genetics, Exchange.com, MicroCHIPS, Worldstream Communications, and Kestrel Solutions. Polaris Venture Partners has offices in Boston, Seattle and Austin. For more information about Polaris Venture Partners, please visit http://www.polarisventures.com.

About Lucent Venture Partners

Lucent Venture Partners LLC. is a wholly owned venture capital subsidiary of Lucent Technologies with offices in Palo Alto, Calif., Waltham, Mass. and Murray Hill, N.J. Formed in 1998, the group invests in early stage technology companies in high-growth communications areas such as optical, data and wireless networking, semiconductors, communications software, professional services and e-commerce. For more information about Lucent Venture Partners, please visit http://www.luvp.com.

About Avaya

Avaya, formerly the Enterprise Networks Group of Lucent Technologies, headquartered in Basking Ridge, NJ, USA, is a leading provider of communications systems for enterprises, including businesses, government agencies and other organizations. We offer voice, converged voice and data, customer relationship management, messaging, multi-service networking and structured cabling products and services. We are a worldwide leader in sales of messaging and structured cabling systems and a U.S. leader in sales of enterprise voice communications and call center systems. We intend to use our leadership positions in enterprise communications systems and software, our broad portfolio of products and services, and strategic alliances with other technology and consulting services leaders to offer our customers comprehensive eBusiness solutions. For more information about Avaya, visit us on the Web at http://www.avaya.com.

About Weiss, Peck & Greer

Weiss, Peck & Greer Software Fund is a private venture capital partnership established in 1971. The firm is based in San Francisco and has managed seven venture funds with $700 million of committed capital. Over the past two decades, Weiss, Peck & Greer Software Fund has applied the firm's resources to establish a record of successful venture capital investing, specializing in the areas of Information Technology and Life Sciences.

About Dain Rauscher Wessels

The Dain Rauscher Wessels division of Dain Rauscher Incorporated includes equity research, equity trading, institutional equity sales and corporate finance. The division's 38 analysts focus on five industries: consumer, energy, financial services, health care and technology. Currently, the analysts follow more than 400 companies. The division, which employs 350 people, has offices in Austin, Texas; Boston; Chicago; Dallas; Houston; Menlo Park, Calif.; Minneapolis; New York City; San Francisco; Seattle; and Tel Aviv, Israel. Minneapolis-based Dain Rauscher Incorporated provides investment services to individual investors and small businesses through offices in 26 predominantly western states, investment banking services to corporations and municipalities nationwide, and trade clearing and settlement services to non-affiliated broker-dealers throughout the United States and abroad. Dain Rauscher Incorporated, one of the nation's largest full-service securities firms, is a member of the New York Stock Exchange and other major securities exchanges, as well as the Securities Investor Protection Corp. Dain Rauscher Corporation, its holding company, trades on the New York Stock Exchange under the symbol DRC.

About Partnerware, Inc.

Partnerware maximizes speed-to-market™ for channel-focused companies. Founded in Austin, Texas in 1996, Partnerware is the leading provider of Web-based Partner Relationship Management (PRM) extranet solutions. Partnerware's flagship product, Partnerware extended Enterprise, drives competitive advantage by providing faster channel and partner program execution. For more information on Partnerware, please visit their web site at http://www.partnerware.com.