ChannelWave Acquires DRUMS to Accelerate Growth And Market Leadership.

Business/Technology Editors

CAMBRIDGE, Mass.--(BUSINESS WIRE)--July 17, 2000

Industry Leader Adds Powerful Interactive Selling Technology and

Domain Expertise to Accelerate Further Growth in PRM Marketplace

ChannelWave Software, Inc., the leader in Partner Relationship Management (PRM) solutions, today announced that it has acquired DRUMS Inc., an Extranet Solutions Company, and leading provider of innovative web-based, intelligent selling systems. The acquisition will enable ChannelWave to enhance the power of its Partner Loyalty Network solutions and expand its business by immediately gaining advanced technology and domain expertise to dramatically improve time-to-market.

"Partner and customer loyalty are fast becoming recognized as critical ingredients to success in the new economy," said Chris Selland, Vice President of CRM and Internet Strategy at Yankee Group. "The DRUMS acquisition allows ChannelWave to extend its PRM benefits from "vendor to partner" to "vendor to partner and customer" to improve selling effectiveness and the customer buying experience. By embracing the customer, ChannelWave is moving to fill an important and overlooked void in the existing PRM marketplace."

"The acquisition of DRUMS is consistent with ChannelWave's vision to take PRM from a point solution for business partners to a business solution that drives significant revenue growth through intelligent online selling," said Chris Heidelberger, president and CEO, ChannelWave Software. "In addition, this acquisition will allow us to scale our business significantly through the infusion of an extremely talented team with vast PRM experience. The expansion is essential in accomplishing our aggressive goals in this fast-growing segment and distances us from our competitors."

In March, ChannelWave partnered with DRUMS to leverage its eConversations(TM) technology which allows organizations to increase revenues through intelligent online selling. Since then, ChannelWave has integrated eConversations across ChannelWave's Partner Loyalty Network, forming the Web's first commerce solution that links vendors, resellers and, for the first time, customers in a single integrated channel management system. Through the acquisition, ChannelWave acquires 100% of the DRUMS shares in a stock transaction and will immediately begin operations out of DRUMS' offices in Toronto, Canada.

"In DRUMS, ChannelWave gains proven technology that revolutionizes the way customers buy over the Internet by enabling personalized online conversations between vendors, partners and customers," said Drew Williams, Senior VP of Product Management at ChannelWave. "Because both companies share a consistent vision about the future of eMarketplaces and a remarkably compatible culture, we will be able to quickly execute on our strategy to expand ChannelWave's market reach and capture a larger share of the e-business market."

eConversations uses advanced reasoning technologies to emulate human listening skills and engage users in an intelligent, two-way personalized conversation with a "virtual salesperson", allowing customers to interact with sellers in ways never before possible over the web. The online salesperson listens, probes and offers feedback to guide potential customers through complex decision-making processes, informing them of the appropriate solution during critical moments of a sale.

ChannelWave then manages the sales opportunity by delivering the information collected from the customer conversation to the appropriate selling channel where the lead is either closed or cultivated. This closed-loop e-business solution provides vendors with the ability to gain unparalleled customer intimacy and next-generation lead management capabilities to impact revenue growth.

About Drums

DRUMS Inc. builds web-based, intelligent selling systems that let the enterprise sell more, to more people, by using intelligence on the Internet to create more intimate relationships between the enterprise and the enterprise's customers. DRUMS customers include Honeywell, GM, Hewlett-Packard, IBM, Xerox and Toshiba.

About ChannelWave

ChannelWave Software, Inc. helps organizations drive business by maximizing the loyalty and effectiveness of their business partnerships. ChannelWave's Partner Loyalty Network provides a strategic, scalable framework that enables organizations to build partner loyalty and leverage that loyalty by enabling partners to collaborate to meet customer needs.

ChannelWave's Partner Loyalty Network consists of two powerful, integrated products, PartnerImpact and PartnerConnect. PartnerImpact enables businesses to recruit, enable and motivate their channel partners and includes: AllianceImpact, SalesImpact, MarketingImpact, CertificationImpact and CommerceImpact. PartnerConnect enhances the capabilities provided in PartnerImpact and enables organizations to create online communities where partners communicate and collaborate together to drive business.

ChannelWave customers include 3Com, Hewlett-Packard, Intel, BEA, Crossroads and Citrix. For more information, visit the ChannelWave Web site at www.channelwave.com or call [phone].