Press Release: January 31, 2001

WR Hambrecht + Co Initiates Coverage of Micromuse (MUSE) with a Buy Rating and a Price Target of $90

Firm projected to benefit from increased network management needs

San Francisco, CA, January 31, 2001—WR Hambrecht + Co today initiated research coverage on Micromuse (MUSE) with a Buy rating and a price target of $90. WR Hambrecht’s Infrastructure Software analyst Prakesh Patel cites accelerated demand for infrastructure management and Micromuse’s recognition as the de facto industry standard as key reasons for the recommendations. WR Hambrecht + Co offers all its research reports free and real-time at www.wrhambrecht.com.

“We believe a renewed focus on profitability and cost cutting should result in the shifting of IT dollars from more expensive hardware additions to cost-efficient software solutions that squeeze additional utility from the existing infrastructure. We believe Micromuse could benefit from these positive trends,” Patel said.

Patel added, “The catalysts which we believe will drive the Company’s stock price include: 1) continued strong financial performance (growth in revenue, net income, and deferred revenue); 2) new customer wins in the network service provider and enterprise markets; and 3) announcements by hardware and software vendors that they will integrate their technologies with Micromuse’s Netcool product offerings.”

Patel projects Micromuse’s total fiscal year revenues will be $230 million in 2001 and $319 million in 2001, up from $124 million in 2000.

Micromuse, Inc. and its subsidiaries develop and support scalable, highly configurable, rapidly deployable software solutions for the effective monitoring and management of multiple elements underlying an enterprise’s information technology infrastructure including network devices, computing systems and other managed environments.