Magic Software Receives Highest Ranking From IBM For Its E-Business Products

IRVINE, Calif.- Magic Software Enterprises (Nasdaq:MGIC - news), a leading provider of e-business and other enterprise-level business solutions for the AS/400 platform, Thursday announced that it has received IBM's highest level of certification for its e-business applications.

The level four ranking is bestowed only on those companies whose e-business products fit the following parameters:

• They can be deployed on multiple IBM servers;
• They use IBM's e-business framework technology (e.g., MQ Series, DB2);
• They integrate with Domino and WebSphere; and
• They meet all of the other common industry e-business standards (e.g., http, html, Java).

The rankings are used internally by IBM to distinguish those vendors whose products are best suited for IBM's AS/400 platform and deserve special consideration for joint marketing with IBM.

"We rank the companies that we work with in terms of their adherence to the e-business framework," said John Quarantello, IBM's worldwide Java and WebSphere segment manager. "One is the lowest ranking and four is the highest ranking. Magic has achieved a four-level of certification."

According to Doug Fulmer, worldwide segment manager for IBM's AS/400 Application Development Tools & Middleware group, Magic's core development technology also achieves the highest marks within IBM.

"In my opinion, the technology developed by Magic in close cooperation with IBM's Rochester Labs achieves the highest levels of product quality for the AS/400, " said Fulmer. "IBM is committed to working with Magic on an ongoing basis to help market Magic's AS/400 related products."

In addition to its application development technology, Magic offers several e-business solutions for the AS/400. In March of last year at the Internet Commerce Expo in Boston, Magic introduced its Magic eMerchant(TM) business-to-business e-business solution, which runs on the AS/400 platform and integrates easily and seamlessly with companies' existing back-end systems.

Magic also recently announced that it will be introducing a new Web-based customer relationship management (CRM) suite of products that promises to provide "real-time business pulsing" for AS/400 customers.

Consisting of four separate applications that can be integrated, either independently or as a part of a total solution, the Magic CRM suite is designed to improve an enterprise's ability to receive and react to dynamic updates regarding all aspects of customer-related activities, to enhance customer satisfaction, and to enable higher levels of corporate profitability. A detailed white paper describing the Magic CRM suite is available for download at www.magic-sw.com/crm.

"We are very pleased with the high ratings we have achieved from IBM for our e-business products," said Jack Dunietz, chief executive officer of Magic. "We will continue to work closely with IBM to ensure that all of our products, including our new Web-based CRM suite, achieve the highest rankings for functionality, quality and customer satisfaction."

About Magic Software

Magic Software Enterprises, a member of the Formula Group (Nasdaq:FORTY - news), develops, markets and supports software development and deployment technology that enables enterprises to accelerate the process of building and deploying applications that can be rapidly customized and integrated with existing systems.

Magic technology, applications and professional services are available through a global network of subsidiaries, distributors and Magic solutions partners in approximately 50 countries. The company's U.S. subsidiary is located at 1642 Kaiser Avenue, Irvine, Calif., 92614, telephone 949/250-1718, fax 949/250-7404, http://www.magic-sw.com.

The Formula Group is an international information technology company principally engaged, through its subsidiaries and affiliates, in providing software consulting services, developing proprietary software products and providing computer-based solutions.

Except for the historical information contained herein, the matters discussed in this news release include forward-looking statements that may involve a number of risks and uncertainties. Actual results may vary significantly based upon a number of factors including, but not limited to, risks in product and technology development, market acceptance of new products and continuing product demand, the impact of competitive products and pricing, changing economic conditions, both here and abroad, release and sales of new products by strategic resellers and customers, and other risk factors detailed in the company's most recent annual report and other filings with the Securities and Exchange Commission.

Contact:
Magic Software Enterprises, Irvine
Katharine Hanley, 949/250-1718 (ext. 220)
khanley@magic-sw.com