Tumbleweed Introduces New Subscription-based Pricing Model and Issues Financial Guidance

Provides greater flexibility for our customers and better visibility for investors

REDWOOD CITY, CA - January 25, 2001 - Tumbleweed® Communications Corp. (Nasdaq:TMWD), a leading provider of mission critical messaging solutions, today introduced a new business pricing model.

Tumbleweed is moving from a traditional software licensing model to a new subscription-based pricing model. Under the traditional model, the company typically recognized initial license fees as revenue in the same quarter that a contract was signed, and the corresponding transaction fees when due and payable over the period of the transaction commitment. With the new subscription-based pricing model, Tumbleweed will account for and report its contracted revenue generally over the life of the contract. The company's current contract lengths range from 12 to 36 months.

This new subscription-based pricing model will allow Tumbleweed customers to flexibly define the length and the dollar value of their contracts, with discounts determined by both parameters. The new contracts will be supported by a simpler and shorter license agreement, further reducing the cost of doing business.

As clients adopt the new subscription-based model over time and Tumbleweed shifts its operations accordingly, deferred revenue will grow each quarter. The accumulation of deferred revenue will enhance visibility into future performance as it turns into revenue month-by-month over the contract term. In addition, Tumbleweed expects that the new model will improve its cash flow from operations in 2001. Tumbleweed's existing outstanding contracts signed under the traditional model will remain in place.

"This new model will allow us to provide our clients with a simpler, more cost-effective way to do business with us and allow them to chart the growth of their technology to the growth of their business," said Jeff Smith president and chief executive officer of Tumbleweed. "In addition, because it will allow us to build deferred revenue and backlog and improve our cash flow, it will provide a better view of the health and well-being of our business."

Conference Call
The company will be discussing this model and providing guidance for 2001 and the first quarters of 2002 on its regular quarterly conference call scheduled for 2:00 PM Pacific Standard Time today, January 25, 2001. A simultaneous webcast and an archive of this call will be available on the company's website, www.tumbleweed.com. Also, a telephonic replay will be available for 30 days following the live call, at (719) 457-0820, code #571442.

Guidance for 2001
Quarterly financials for 2001 under the new business model will not be comparable with historical quarters under the company's previous pricing model. To ensure that investors and other interested parties can better understand how Tumbleweed's future quarters compare to historical financial results, the company is providing below a comparison of its forecast 2001 quarters under both models.

The first two quarters of 2001 will be transition quarters as the subscription-based business model starts to be adopted by customers. During these transition quarters, there will be an increase in deferred revenue and a significant drop in recognized revenue.

Tumbleweed cautions that the estimates below are based on current plans and expectations, and that a number of factors could cause the actual results for these periods to differ materially from the guidance given at this time. These factors are described in the Safe Harbor statement below. The company undertakes no obligation to update this guidance during the current quarter or future quarters.

Tumbleweed is a leading provider of solutions for managing secure communication and collaboration to enable the business Internet. Tumbleweed's robust policy-based framework empowers organizations to safely share and protect critical information, increase customer loyalty and privacy and dramatically reduce costs. Tumbleweed is trusted by 1,000 blue-chip customers including American Express, Chevron, Datek Online, the European Union's Joint Research Council, First Union Wachovia, John Deere, Merrill Lynch, Nike, Northern Trust, NTT, Salomon Smith Barney, Travelers and US Food and Drug Administration. One hundred of the Fortune 500 are Tumbleweed customers. Tumbleweed Communications was founded in 1993 and is headquartered in Redwood City, Calif., with offices around the world.

Except for the historical information contained herein, the matters discussed in this press release may constitute forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those projected, particularly with respect to the security features of Tumbleweed's products and the activities of any third party. In some cases, forward-looking statements can be identified by terminology such as "may," "will," "should," "potential," "continue," "expects," "anticipates," "intends," "plans," "believes," "estimates," and similar expressions. For further cautions about the risks of investing in Tumbleweed, we refer you to the documents Tumbleweed files from time to time with the Securities and Exchange Commission, particularly Tumbleweed's Form 10-K filed March 30, 2001 and Form 10-Q filed November 13, 2001. Tumbleweed assumes no obligation to update information contained in this press release.