Leading Industry Analyst Issues “First Take” on the iBOLT and SAP Business One Agreement

Specially tailored iBOLT version enhances integration with SAP Business One

November 24, 2004

Or Yehuda, Israel (November 24, 2004) - Magic Software Enterprises (NASDAQ: MGIC), a leading provider of state-of-the-art development and integration technology, announced today that its agreement with SAP America, Inc., the North American subsidiary of SAP AG (NYSE: SAP), under which Magic will introduce a specially designed iBOLT Integration Suite for SAP® Business One has been the subject of a recent “First Take” issued by Gartner, one of the leading industry analysts.

The Gartner “First Take” entitled “SAP Deal Raises Magic Software's Visibility” issued in November 2004 by Massimo Pezzini and Jess Thompson, is available at http://www.gartner.com.

"We feel that this recognizes the mutual value that this partnership will deliver to both SAP and Magic," said Avigdor Luttinger, Head of iBOLT at Magic Software." This is a first significant outcome of our SMB strategy for iBOLT, which has positioned us ideally for this partnership and will allow us both to significantly increase our partner community and the value they deliver to our customers”.

The customized version of iBOLT complements SAP’s existing arsenal of cutting-edge development tools for SAP Business One. It will enable SAP Business One customers to rapidly enhance their SAP Business One systems with a range of features - including extended workflows, composite applications, multi-channel access, unlimited interoperability and integration with other systems and platforms, as well as business activity and performance monitoring. The new iBOLT version will also open SAP Business One to the large channel of existing Magic Solution Providers, allowing them to seamlessly integrate their existing solutions with SAP Business One, streamlining the process and reducing integration time.

About Magic Software Enterprises
Magic Software Enterprises, a subsidiary of Formula Systems (Nasdaq:FORTY), develops, markets and supports software development, deployment and integration technology (www.magicsoftware.com/ibolt) 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 17310 Redhill Avenue #270, Irvine, CA 92614-5637, telephone 800-345-6244, 949-250-1718, fax 949-250-7404, http://www.magicsoftware.com/.

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.
Gil Trotino, Vice President, Worldwide Marketing
(949)-250-1718, x299
gtrotino@magicsoftware.com