COLT and StorageNetworks Enter Service Partnership; Companies To Jointly Market and Sell a Comprehensive Suite of Managed Storage Services in Europe.

Business/Technology Editors

WALTHAM, Mass.--(BUSINESS WIRE)--Sept. 7, 2000

COLT Telecom Group plc (COLT), a leading provider of high bandwidth data, internet and voice services, and StorageNetworks, Inc. (NASDAQ:STOR), the Storage Services Provider (SSP) for the e-Economy, today announced a service partnership through which COLT and StorageNetworks are collaborating to market and sell world-class, high-availability managed storage services.

This announcement demonstrates COLT's increased focus on delivering value-added services and products. Under the terms of the relationship, COLT and StorageNetworks will co-market StorageNetworks' DataPACS(SM), NetPACS(SM), BackPACS(SM), and SafePACS(SM) Services to COLT's established customer base as well as potential new customers. The PACS(SM) (Protection, Availability, Continuity, Scalability and Security) Services provide customers with primary data, backup and recovery services, and remote data replication in a highly secure environment. StorageNetworks is the only co-branded Managed Storage Service offered by COLT.

In addition, this relationship further extends the reach of StorageNetworks' Global Data Storage(SM) Network (GDSN) to include COLT's state-of-the-art Internet Solution Centres (ISC) in select geographic markets. By the end of 2000, COLT/StorageNetworks Managed Storage Services will be available through StorageNetworks' Storage Points-of-Presence (S-POPs(SM)) co-located in COLT ISCs in London, Frankfurt, Amsterdam, and Paris. Going forward, COLT and StorageNetworks will evaluate opening S-POP data centres in other geographic locations based on demand for the co-branded Managed Storage Services.

COLT and StorageNetworks anticipate significant market opportunity for their Managed Storage Service given the rapid growth in and increasing complexity of e-commerce and enterprise-class storage applications. Forrester Research estimates that total storage expenditures for an average Global 2,500 company will increase by a factor of ten over the next five years. Storage and associated administration is expected to grow from 4% of computing systems budgets in 1999 to 17% in 2003.

COLT President and Chief Executive Officer Paul Chisholm said:

"Given the rapid growth in e-commerce and enterprise storage applications, we see a clear opportunity to sell our co-branded Managed Storage Services in the European market. Our partnership combines the strength of COLT's state-of-the-art Internet Solution Centres, local access networks and pan-European infrastructure backbone with StorageNetworks world-class Managed Storage Services, storage service management software and operational support. An important aspect of StorageNetworks approach is that it deploys hardware and software from multiple vendors, thus ensuring that our mutual customers receive the highest level of service based on a number of state-of-the-art technology sets. By working together, we aim to achieve a significant time-to-market advantage in Europe - enabling us to meet our customers growing requirements for Managed Storage Services."

Peter Bell, co-founder and CEO of StorageNetworks said:

"We made the strategic decision to enter a relationship with COLT, a well-established, world-class telecommunications and hosting provider. This relationship marks a significant accomplishment for StorageNetworks because expanding our presence in Europe is a key initiative for StorageNetworks in 2000 and 2001. We believe that COLT's established customer base, Internet Solution Centres and network infrastructure, coupled with our comprehensive Managed Storage Services offerings, give the StorageNetworks/COLT combination a competitive advantage in the European market. We also believe that we can leverage our experience and success in the United States Storage Service Provider market as we pursue opportunities in Europe."

Customers who purchase COLT/StorageNetworks' Managed Storage Services will be provided with a comprehensive Service Level Agreement that gives specific guarantees for service availability and performance. To receive COLT/StorageNetworks Managed Storage Services, customers will plug into StorageNetworks' GDSN through a StorageNetworks' StoragePort(SM) Access Channel located in either the customer's onsite data centre or inside the customer's space within a COLT ISC.

Customers also will be provided with increased visibility into their storage through StorageNetworks' storage service management application, its Virtual Storage Portal(SM) (VSP(SM)) software interface, which enables customers to easily and quickly manage, monitor and provision storage. In addition, the COLT/StorageNetworks combination will provide pan-European customers with 7/24/365 monitoring and global customer support from StorageNetworks' Global Operations Center (GOC), which is located in Waltham, Massachusetts in the United States.

About COLT (www.colt-telecom.com)

COLT Telecom Group plc (COLT) is a leading provider of high bandwidth data, internet and voice services to business and governmental customers in Europe. It currently has operations in 23 European cities in nine countries and plans to be providing service in 30-32 cities by the end of 2001. During the year ended December 1999 COLT's turnover was 401.6 million pounds sterling and it carried 7.8 billion switched minutes of traffic. At 30 June 2000 COLT had installed 2,369 route kilometres of fibre-optic cables in its city-networks; provided 5.3 million private wire voice grade equivalents and had 4,754 buildings connected to its networks. COLT also has 6 Internet Solution Centres in service with plans to develop between 20 and 24 in total. COLT Telecom Group plc is listed on the London Stock Exchange (CTM.L) and Nasdaq (COLT).

About StorageNetworks

StorageNetworks, Inc. (NASDAQ:STOR) is the Storage Service Provider (SSP) for the e-Economy and an innovator that is making managed data storage services as accessible as phone or electric utility services. StorageNetworks enables emerging Internet companies, e-commerce companies and established enterprises to store, protect and access critical information more easily, reliably, and efficiently. StorageNetworks' services let customers focus on building their business, not their data center, allowing them to achieve greater flexibility, quicker time to market, the highest levels of reliability and security, and lower operating costs. Based in Waltham, Massachusetts, StorageNetworks operates in major business and government centers in the United States and Europe. For further information, please visit the company's Web site at http://www.StorageNetworks.com, email [e-mail], or call 1-800-463-7105.

This press release may contain forward-looking statements relating to future events or future financial performance that involve risks and uncertainties. These statements are made pursuant to the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934. These statements are only predictions and actual results could differ materially from those anticipated in these statements based upon a number of factors including those risk factors identified in StorageNetworks' Prospectus dated June 29, 2000.

StorageNetworks, Storage Services for the e-Economy, Global Data Storage, DataPACS, NetPACS, BackPACS, SafePACS, PACS, StoragePort, Virtual Storage Portal and VSP are servicemarks of StorageNetworks, Inc. All other brand and product names contained in this release may be trademarks or registered trademarks of their respective holders.