Corrected - Network-1 Announces Market Size and Financial Planning Goals

Business Wire, Feb 12, 2001

Business/Technology Editors

WALTHAM, Mass.--(BUSINESS WIRE)--Feb. 12, 2001

Network-1 Security Solutions, Inc. (NASDAQ:NSSI), a leader in distributed intrusion prevention solutions for e-Business networks, today announced market sizing and planning goal information. Market data is based on the October 2000 forecast, by International Data Corp. (IDC) of Framingham, MA, entitled: "Internet Security Software Market Forecast and Analysis, 2000-2004." In the report, the Company was cited as one of the original manufacturers of Distributed Firewalls, a market segment IDC characterizes as "hot."

IDC sees the distributed firewall market as an extension of the personal firewall market, which they project will disappear as consumer-related firewalling finds its way into broadband modems and home PCs. Distributed firewalls, however, are designed for the security needs of the enterprise, providing for centralized management and much greater access control granularity. In the projections below - host firewalls are the combination of distributed firewalls and personal firewalls.

IDC projects the annual growth of host firewalls to be close to 100% with total market size in 2004 of $300M - or approximately 25% of the total firewall software market.

IDC's sizing of the market looks only at workstation firewalls and not those for application and infrastructure servers and only at the Microsoft Windows operating system environment. Network-1 is currently shipping distributed, host-resident firewalls for both Windows workstations and servers. The Company is also targeting to ship host-resident firewalls on non-Windows operating systems environments later in 2001.

IDC Market Size Projections (Distributed Firewalls)
  1999      2000      2001      2002     2003     2004
  $9M       $20M      $45M      $90M     $170M    $270M


IDC Year-over-Year Distributed Firewall Growth
            2000      2001      2002     2003     2004
            122%      125%      100%     89%       59%


Network-1's Market Share Percentage Goals
  1999      2000      2001      2002     2003     2004
   --       3%-4%     9%-12%     --       --       --

Avi Fogel, President and CEO of Network-1, stated, "Network-1's goals are to continue to increase market share past 2001. We are very excited to be involved in this high-growth market and wanted to share our goals with the analysts and investors looking at Network-1."

Network-1's revenue in 1999 and 2000 also consisted of traditional perimeter firewall software, which is expected to become a substantially smaller percentage of total revenues.

About Network-1 Security Solutions, Inc.

Network-1 Security Solutions, Inc. (NASDAQ:NSSI) is a leader in distributed network intrusion prevention products that enable organizations to open up for e-Business. Distributed intrusion prevention combines the benefits of firewalls and host-based network intrusion detection allowing e-Businesses to scale the secure processing of incoming and outgoing traffic. In addition, distributed intrusion prevention protects critical data servers from abuses by those with "insider access" and enables the deployment of multiple layers of defense against breaches by outsiders. Additional details about the Company and its products are available at: http://www.network-1.com

Certain of the above statements contained in this press release contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Actual results, events and circumstances (including future performance, results and trends) could differ materially from those set forth in such statements due to various factors, risks and uncertainties, including but not limited to, risks associated with the Company's need to raise additional capital, future growth and operating results, the uncertainty of market acceptance of the Company's products, technological change, competitive factors and general economic conditions. Except as otherwise required to be disclosed in periodic reports required to be filed by companies registered under the Exchange Act by the rules of the Securities and Exchange Commission, the Company has no duty and undertakes no obligation to update such statements.

CyberwallPLUS is a trademark of Network-1 Security Solutions, Inc. All other product, trademark, company or service names mentioned are the property of their respective owners.