Merlin Delivers a New Standard in Network Attached Storage Solutions

Burnaby, BC, August 01, 2001 - Merlin Software Technologies International, Inc. - (OTCBB: MLSW), a leader in software development and business solutions for the small to medium-sized enterprise (SME) market, today announced a new line of network attached appliances.

"The EssentialServer is the first product in our line of network attached appliances," announced Robert Heller, CEO of Merlin. "We have been working closely with our value added resellers (VAR) to design and develop a line of products that provide real solutions for small to medium-sized enterprises. The response to our products has been extremely encouraging and we will be rolling out additional models in the near future."

"Every VAR that has had a demonstration of the EssentialServer to date, is certain that they can sell this product," confirmed Cheryl McReynolds, VP Sales at Merlin. "It is an affordable solution that fits a current business need and is easy to install and manage."

International Data Corporation estimates the appliance server market will grow at a compounded annual rate of more than 56%, reaching $31.4 billion in revenue by 2005. Of this figure it is estimated that network attached storage will account for approximately 55%, or $17.27 billion. EssentialServer meets this increasing demand, in the SME segment.

"EssentialServer solves the business need for reliable data storage, with a strong emphasis on recovery and backup solutions. Data has become one of a company's most valuable assets, and the Essential Server protects businesses from catastrophic data loss," says Mike Rauscher, Director of Product Marketing. "Merlin has developed a NAS solution that provides both a low cost of ownership and a data management solution that is easily deployed and managed."

About EssentialServer

The EssentialServer products are a line of network attached appliances that meet the needs of small to medium-sized enterprises, with 1-100 employees. EssentialServer addresses two of the biggest challenges in managing a company's information: scaling data storage capacity as digital files grow, and protecting a business from the financial and legal disaster that arises from the loss of important information.

EssentialServer eliminates the frustration of piecing together components by offering a fully integrated storage and backup solution so companies can focus on their top priority - their business. Complete with hard drive storage, tape drive, CD-RW, and backup software, these products bring, to the customer, confidence that their data is stored safely and regularly backed up.

At an entry-level price of $995.00 USD, these products are a perfect fit for a small to medium-sized business, regional office, or corporate department.

About MERLIN Software Technologies International, Inc.

For more information, contact:

Investor Relations MERLIN Software Technologies International, Inc. Tel: (604) 320-7227 Toll Free: (877) 988-7227 Email: ir@merlintechnologies.com

Sarah Jane Ormerod Director, Corporate and Marketing Communications MERLIN Software Technologies International, Inc. Tel: (604) 320-7227 Toll Free: (877) 988-7227 Email: sjormerod@merlinsoftech.com

Legal Notice Regarding Forward-Looking Statements

This press release contains "forward-looking statements," including forward-looking statements as that term is defined in Section 27A of the United States Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Statements in this press release which are not purely historical are forward-looking statements and include any statements regarding beliefs, plans, expectations or intentions regarding the future. Forward-looking statements in this press release include statements regarding:

a) Merlin anticipating that response and demand for its EssentialServer will continue to be positive and Merlin anticipating that it will roll out additional models in the near future.
b) Merlin anticipating that its value added resellers will be able to sell the EssentialServer appliance; and
c) Merlin anticipating that the network attached storage market will grow to any certain revenue amount by 2005, or at all, and that its EssentialServer appliance will be able to meet this demand.

It is important to note that Merlin's actual results and outcomes may differ materially from those contained in the forward-looking statements contained in this press release. Factors that could cause actual results to differ materially include, but are not limited to, risks and uncertainties such as the emergence of companies with competing or superior network attached storage appliances, continued demand for network appliances, insufficient demand and market acceptance of Merlin's EssentialServer network appliance, unforeseen changes in the software and hardware technology used in connection with the computer networks, unforeseen claims in connection with Merlin's intellectual property rights in connection with its EssentialServer, continued development of computers and computer networks as tools to manage data and information for small and medium sized companies and businesses and the overall success of Merlin and its subsidiaries in general.

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