Tuesday August 6, 9:04 am Eastern Time

Magic Software and Software AG Announce Partnership to Provide XML Connectivity to IBM iSeries Customers

IRVINE, Calif.--(BUSINESS WIRE)--Aug. 6, 2002-- Magic Software Enterprises (Nasdaq:MGIC - News), a leading provider of application development technology and business solutions and Software AG in Germany today announced a partnership to enable XML connectivity for iSeries applications.

Software AG is Europe's largest systems software provider and a pioneer in XML technologies.

By combining the strength of Magic eDeveloper (www.magicsoftware.com/edeveloper) with the power of Software AG's Tamino XML Server, the companies provide a powerful technological environment for building and enabling iSeries applications to take advantage of XML and cross-platform data transfer. In addition, existing iSeries applications can be upgraded, modernized and XML-enabled, increasing the value and life span of existing applications.

Magic eDeveloper enables developers to directly access and manipulate Extensible Markup Language (XML) data and instantly assemble Web Services utilizing its new Web Services Assistor for Web Services Description Language (WSDL) operations.

The integration of Magic eDeveloper with the Tamino XML Server has already been proven with the development of a fully automatic document management solution. In this solution, XML data can be accessed directly from the iSeries environment via SOAP or Web Services.

Tamino generates the desired output format including ASCII, PDF or XML for the multiple communication channels such as FTP, e-mail, fax or unified messaging. The solution is designed to enable the filing of XML documents without transformation processes. As a meta-language, XML seamlessly bypasses the boundaries of systems, formats, and communication channels.

"The partnership between our companies will allow iSeries customers to use our technologies to expand their reach with XML," explained David Leichner, vice president of Worldwide Marketing for Magic Software. "We look forward to cooperating with Software AG to bring the advantage of XML and cross-platform data transfer to the iSeries market."

"In Magic Software we have found a partner who is able to open up the advantages of XML-based solutions to iSeries users," said Bernd Huebner, head of Software AG's German sales organization. "As a technologically advanced, well-known company within the iSeries community, Magic Software is the ideal partner for us to enter this growing market."

IBM (NYSE:IBM - News) also had positive reactions to the cooperation and the advantages it brings to their iSeries customers. "The integration of XML technology in existing iSeries applications provides a new dimension of application modernization and investment protection," said Uwe Witulski, marketing director of iSeries at IBM EMEA Central Region. "We fully support this solution which simplifies data exchange for many of our customers while providing them with modernized, integrated applications."

About Software AG
Software AG is based in Darmstadt, Germany. Founded in 1969, Software AG continues to be Europe's largest and a leading global provider of system software and services enabling enterprise data integration and management. Software AG's products control the central IT processes of thousands of renowned companies worldwide including Lufthansa, Siemens, Citibank, Merck, DaimlerChrysler, Sony, BP and Telefonica.

Software AG develops products and solutions that support the XML (Extensible Markup Language) standard. XML simplifies the exchange of documents and data as well as the integration of cutting-edge Web applications into traditional IT architectures. According to IDC, Software AG is the worldwide leader in the XML database and server market thanks to its Tamino XML Server. Software AG's B2B solutions offering focuses on XML-based integration (e.g. Web services) and enterprise content management systems. Software AG's portfolio of 300-plus distribution and technology partners includes IBM, Sun, Microsoft and Hewlett-Packard and solutions vendors like BEA, Tridion, Stellent and Ixos.

In 2001, the corporation achieved 589 million euros in total revenue. Software AG has offices in more than 70 countries and currently employs a staff of 3,200. Software AG is listed on the Frankfurt Stock Exchange (MDAX, security id number 24264/SOWGn.F).

About Magic Software Enterprises
Magic Software Enterprises, a member of the Formula Systems 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 13710 Redhill Avenue #270, Irvine, CA 92614-5637, telephone 800/345-6244, 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.

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