http://www.ondemandsoftware.com

Strategic Highlights

· Extended global coverage by establishing new customers in over twenty countries, including Australia, Austria, Belgium, Bermuda, Brazil, Canada, Denmark, France, Germany, Ireland, Italy, Macedonia, Netherlands, New Caledonia, New Zealand, Norway, Spain, Sweden, Switzerland, and the United Kingdom

· Signed 365 new customers during the six-month period, including Powergen, SCA Hygienic Products, FMC Technologies, Kohl’s Department Stores, Coors Brewers, GSA, Department of Justice, and the United States Army

· Continued to lead the desktop availability market with the well-known WinINSTALL product line that includes the world’s most widely-used MSI Packager, WinINSTALL LE, shipped with every Microsoft Windows 2000 Advanced Server CD

· Expanded sales relationships with Coca Cola, Revenue Canada Taxation and Finance, Northern Trust Bank, and the British Home Office – many of whom have been WinINSTALL customers since the early 1990’s

· Continued growth with well over 10,000 customers supporting millions of desktops worldwide

· Won the W2K Target Award for an unprecedented third year in a row

Bonita Springs, Florida – January 6, 2003 – OnDemand Software, Inc., a leading provider of infrastructure software powering software distribution and desktop availability solutions, today announced profitable financial results and significant strategic highlights for its fiscal year ended December 31, 2002.

“OnDemand Software and WinINSTALL gained the market share and achieved the momentum in the last half of 2002 that positions our product line for exponential growth in 2003,” commented Jack Palmer, president and CEO of OnDemand Software. Palmer added, “WinINSTALL continues to move beyond traditional application packagers and software installation products as we begin to address the larger issue of desktop availability.” Desktop availability solutions eliminate the need to visit desktops to resolve software problems while ensuring uninterrupted availability of the desktop to the user. Products with the ability to install operating systems and off-the-shelf and in-house applications, as well as completely reset desktops can provide bottom-line savings for IT staffs in companies of every size.

During the third and fourth quarters, OnDemand realized significant sales to major airlines, governmental agencies, and companies in the financial services, healthcare, pharmaceutical, professional services, publishing, and telecommunications industries - including Powergen, SCA Hygienic Products, FMC Technologies, KohlÂ’s Department Stores, Coors Brewers, GSA, Department of Justice, and the United States Army.

About OnDemand Software, Inc.

OnDemand is a pioneer and a leading provider of software distribution solutions for small, medium and enterprise IT environments. OnDemand’s WinINSTALL product family, based on the company’s Discover Snapshot™ technology, is used to establish and maintain desktop standards, automating the installation of operating systems, content and application load sets to networked and remote PCs. OnDemand customers, in companies of every size, report a substantial return on investment (ROI) and a significant reduction in the total cost of ownership (TCO). Today, over 10,000 companies worldwide, supporting millions of desktops, use the WinINSTALL product. OnDemand is committed to continuing the WinINSTALL product family’s leadership role in the software distribution and change management market. For more information about OnDemand or to download a free 30-day evaluation copy of WinINSTALL, visit us at www.ondemandsoftware.com or call Paul Pieske at 866-495-0541, Ext. 105.