Small and Mid-Sized U.S. Businesses Expected to Increase Spending on Web Hosting, Storage and Disaster Recovery in 2004

Survey shows 23% of respondents plan an average of 60% increase in spending on Web Hosting in support of critical on-line presence

Andover, MA. December, 30, 2003 - - NaviSite, Inc. (NASDAQ SC: navi), a leading provider of application management, content distribution, messaging and infrastructure management services, recently co-sponsored a focused market research survey on the Information Technology spending plans for Small and Mid-Sized U. S. Businesses (SMBs: 10-500 employees). The survey was conducted in conjunction with Massachusetts-based market intelligence firm Schaaf Inc.

Schaaf Inc. interviewed IT executives across a range of business verticals to gauge their demand and spending plans for technology products and services in 2004, ranging from managed messaging, disaster recovery and backup, through to Virtual Private Networks, and web hosting. The survey also considered SMBs' motivation and buying behavior, along with their preferred channels and attitudes towards new technology, revealing that 50% buy online whenever they can, and that 77% view a company's Website as important or extremely important when compared to traditional sales and marketing approaches.

This market intelligence data aligns directly with NaviSite's position in delivering a complete range of managed IT services to the mid-market. NaviSite has been committed to meeting the specific needs of mid-market companies by providing outsourced application, software delivery, hosting and messaging services to over 850 mid-sized companies.

“Small to mid-sized companies have a special set of needs, and they like to do business with companies who understand those needs - companies who look and act like they do,” said Joel Whitman, NaviSite Vice President of Marketing. “It is gratifying to see that the results of this survey confirm what we have believed all along, that small to mid-sized companies recognize the importance of their web-presence and are committing the resources to be sure they remain strong in a competitive market environment.”

The full survey report is available for purchase by contacting Schaaf, Inc.

About Schaaf Inc.

Schaaf Inc., founded in 2002, is a market research firm In Watertown, MA focused on small and medium business demand for high tech products and services. For information on the firm's December 2003, SMB Benchmark Survey, contact Jeanne Schaaf at jeanne@schaafinc.com

About NaviSite, Inc.

Founded in 1997, NaviSite, Inc, (NASDAQ: NAVI) is a leading provider of application management, content distribution, messaging and infrastructure management services for more than 850 customers consisting of mid-market enterprises, divisions of large multinational companies, and government agencies. For more information, please visit http://www.navisite.com.