Thursday April 4, 9:02 am Eastern Time

Magic Software Targets IBM Software and Hardware Partners with Enhanced Channel Program

IRVINE, Calif.--(BUSINESS WIRE)--April 4, 2002--Magic Software Enterprises (Nasdaq: MGIC - news), a leading provider of application development technology and business solutions, announced today the launch of its channel expansion campaign and enhanced Magic Solution Partners (MSPs) program. This program is designed to help increase revenues and return on investment for IBM software and hardware partners, VARs, consultants and system integrators, through the use of Magic eDeveloper (www.magicsoftware.com/edeveloper), the company's flagship development environment and Magic eMerchant (www.magicsoftware.com/emerchant), its award winning e-business platform.

Consisting of a very appealing membership incentive program, this partner recruitment drive is targeted to recruit, train and mentor a large number of solution partners, who base their business on IBM eServer platforms and databases. This program also targets hardware partners who would like to increase sales of hardware through increased application development efforts. Additional information regarding the enhanced MSP program can be found on the Magic Software web site (www.magicsoftware.com/partners/programs).

Software Partners
Magic Software has provided enabling technology and business solutions to IBM customers since 1995. Magic offers IBM software partners, consultants and integrators a superior technology, Magic eDeveloper, for developing and deploying business-critical applications. Magic eDeveloper provides developers and business users with Rapid Return on Investment and significant returns as described in the Magic RROI White Paper (www.magicsoftware.com/entry/roipaper).

"We have received significant return on investment (ROI) working with Magic to deploy the bank's systems on the iSeries platform," stated Volker Humrich, head of development for DekaBank Luxemburg S.A. "We needed to integrate our applications with existing systems both within the bank and outside. We have found that using Magic for developing new applications is at least twice as fast as 3GL tools such as COBOL, RPG and Java. When it comes to program enhancements we experience ROI of more than three times faster than other tools."

Partners who are currently developing in Java can benefit from Magic eDeveloper's J2EE component functionality to realize rapid integration between Java and existing legacy data. Magic eDeveloper also supports native access to DB2 on all IBM eServer systems as well as integration with legacy applications.

Software partners can also benefit from the Magic eMerchant e-business platform, which can be easily integrated with legacy systems. Magic eMerchant provides an advanced multi-tier architecture that expands e-commerce sites to include multiple stores, business units and departments, each with its own business rules and administration. In addition, its multi-level administration ensures that host corporations can keep track of site use, while giving each separate site control of its own processes and products.

Both of these products have received IBM Server Proven validation and the highest ranking by IBM technical teams for adherence to the IBM e-business framework.

Hardware Partners
Magic Software Enterprises influences millions of dollars each year in hardware sales through the implementation of applications from Magic Solution Partners and via projects implemented by the Magic Professional Services organization. By partnering with Magic Software, IBM hardware partners can benefit from a network of professionals worldwide who provide expertise within specific industries, consulting services, systems integration, solution development, and technical support for the IBM eServer platforms.

Tens of thousands of end users are running their critical business systems on applications developed with Magic technology, running on IBM systems.

"We want to make it easier and even more worthwhile for new partners to work with Magic Software, and join the growing Magic community of developers and Magic Solution Partners who realize rapid return on investment (RROI) using our products," said Menachem Hasfari, chief executive officer of Magic Software. "This recruitment effort is based on a very attractive program which includes development and deployment licenses, training and support, and professional services mentoring. It also provides flexible financing for prospective partners."

About Magic Software Enterprises
Magic Software Enterprises, a member of the Formula Systems group, 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.magicsoftware.com.

Formula Systems is a global information technology company principally engaged, through its subsidiaries and affiliates, in providing software consulting services, developing proprietary software products and providing computer-based business solutions.

The IBM eServer brand consists of the established IBM e-business logo with the following descriptive term "server" following it.

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,
David Leichner, 949/253-9299
davidl@magicsoftware.com