Magic Software Enterprises and InterSystems Corp. Announce Strategic Partnership

IRVINE, Calif.- Magic Software Enterprises (Nasdaq:MGIC - news), a leading provider of state-of-the-art development technology and business solutions, and InterSystems Corp., a leading provider of high-performance database systems for Web applications, Wednesday announced that they have signed a partnership agreement.

Under the terms of the agreement, each company will be able to leverage the other's products, sales organizations and distribution channels for purposes of increasing revenues. Together, the companies will provide a powerful technological environment for building and running Web applications, and Magic will bundle a full-function copy of InterSystems' CACHE e-DBMS technology on its distribution CDs.

There is considerable synergy between the two companies and their products. Both organizations have extensive networks of partners using their products to build application solutions, and each has a very large corporate customer base. And, while both companies operate worldwide, InterSystems is especially well known in North America while Magic is extremely strong in Europe and Japan.

InterSystems' flagship product, CACHE, is a post-relational database that offers easy and rapid creation of sophisticated Web applications atop a highly scalable and fast e-DBMS. Magic, whose development technology and solutions are platform- and database-independent, has built a solid reputation for providing leading edge development technology and e-commerce solutions that give companies what is perhaps the fastest way to Web-enable their businesses.

"A strategic partnership with InterSystems enables Magic to access a prestigious list of worldwide customers with the potential for helping drive sales of our e-commerce and customer relationship management solutions," said Jack Dunietz, chief executive officer of Magic. "While applications developed with Magic run on a variety of database systems, we are particularly excited to recommend CACHE e-DBMS for its performance, scalability and easy system management."

InterSystems' clients include AmeriTrade, the Department of Veterans Affairs, Interliant, Lloyd's Bank, Partners HealthCare System and Welcome Lodges.

"From our perspective, the partnership with Magic aligns InterSystems with a leading supplier of e-commerce and CRM solutions," said Terry Ragon, chief executive officer of InterSystems. "Unlike the typical Internet startup, Magic brings a strong track record and a solid and loyal customer base that is enthusiastic about Magic's technology. We are excited about bringing our e-DBMS technology to that customer base and about introducing Magic's solutions to our customers."

About InterSystems
With headquarters in Cambridge, Mass., InterSystems Corp. (www.e-DBMS.com) is the leading provider of high-performance database systems for Web applications, with more than three million users worldwide. InterSystems' flagship product, CACHE, is a post-relational database with a multidimensional data and application server offering ultra-fast and massively scalable objects and SQL.

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 North American 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 producing 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 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, Ltd.
Katharine Hanley, 949/250-1718 ext. 220
khanley@magic-sw.com