K3 Business Technology Group Regulatory News (KBT)

KBT

K3 Business Technology Group plc

("K3" or "the Group")

Exclusive Hosted 'Software as a Service' Agreement

with SYSPRO (PTY) Ltd ("SYSPRO")

K3, which supplies and supports Enterprise Resource Planning ("ERP") software to the supply chain industry, announces that it has reached an agreement with SYSPRO to provide hosted Software as a Service ("SaaS") on an exclusive basis worldwide. SYSPRO is a leading developer of ERP solutions for the manufacturing sector globally and currently has approximately 14,000 customers. K3 has a long established relationship with SYSPRO and is its exclusive distributor in the UK. Hosting services will be provided through K3's subsidiary, DigiMIS, which was acquired by K3 in March 2010 and which already has a well-established reputation for hosting and supporting SYSPRO systems.

The agreement with SYSPRO represents a significant step forward in the development of K3's managed services business and creates a new global market for the Group. K3 will be able to leverage the investment it has made in the Group's managed services and hosting activities by offering hosted SaaS SYSPRO solutions throughout the SYSPRO partner network, which spans 60 countries.

Since the acquisition of DigiMIS in March 2010, K3 has been focused on marketing its managed services, hosting and SaaS offering into its existing base of 2,000 customers, 500 of whom are SYSPRO customers. This agreement significantly broadens K3's growth opportunities in this area.

Over time, K3 expects its hosting and SaaS services to significantly increase the Group's annual recurring income, which currently stands at 40% of total revenues and is derived from annual software licence renewals.

Andy Makeham, Chief Executive, commented,

"This is a landmark agreement for K3 and reflects the technical strength of our DigiMIS hosting service for SYSPRO products. Uptake of SYSPRO BusinessLive, as it is known, is expected to gain greater momentum as the attractions of Cloud Computing grow and with some 14,000 SYSPRO customers worldwide, the agreement represents an exciting opportunity to accelerate the growth of our managed services business."

Phil Duff, Chief Executive of SYSPRO commented,

"K3 has enjoyed considerable success in the deployment of SYSPRO in a hosted environment, supporting customers across the UK, Europe and the USA. We are delighted to have reached this agreement with K3 making SYSPRO available as a hosted SaaS solution on a worldwide basis."

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