Arel and SGI Form Strategic Alliance to Offer Breakthrough e-Learning Solution, Enriched by Multimedia and Video Streaming

MOUNTAIN VIEW, Calif., May 21 — Arel Communications and Software Ltd. (Nasdaq: ARLC – news), the world’s leading provider of interactive distance learning (IDL) solutions, announced today that it has formed a strategic alliance with SGI (NYSE: SGI – news), one of the world’s leaders in high-performance computing technology. The two companies are launching a joint learning-on-demand solution, continUlearn(TM), at the World Education Market conference in Vancouver, Canada. This scalable and robust solution integrates SGI’s premier servers and Kasenna(TM) MediaBase media streaming software with the IDEAL(TM) suite of e-learning solutions from Arel. In addition, SGI and Arel will provide professional services to ensure fast and effective implementation of distributed e-learning networks worldwide.

ContinUlearn is a browser-based, on-demand learning solution that incorporates synchronized audio, video and multimedia learning capabilities. The solution provides interactive and rich media content for unparalleled training sessions that can be delivered to multiple locations via satellite, corporate intranets or fast Internet. Powered by world-class, high-performance SGI(TM) Origin(TM) family servers and Kasenna MediaBase, continUlearn also offers live, instructor-led training that combines quality video, two-way audio and data interaction as well as advanced collaboration tools. The solution records the real-time learning events for asynchronous interactive delivery and later review.

Together with SGI, Arel will continue its rapid expansion into many different markets and extend its offering by providing high-quality technology and services to small, medium-sized and large-scale organizations in the education, government and corporate sectors. These include key industries such as finance, healthcare, science, energy, retail and manufacturing.

Zvi Klier, president of Arel Communications and Software Ltd., remarked, “The formation of this new alliance further strengthens Arel’s strategic penetration into the global e-learning market by combining SGI’s international sales force, SGI Professional Services and worldwide market visibility with the integration of the companies’ field-proven technologies.”

He added, “continUlearn promises to be one of the most reliable and scalable distance learning solutions, capable of handling vast amounts of highly interactive and traceable streamed media-rich learning content to thousands of simultaneous users over a variety of network topologies.”

Walter Stewart, director of Global Marketing, Research and Education at SGI, explained, “SGI has provided media streaming products to the education, training and corporate communications markets for many years. The exciting launch of the continUlearn solution brings the power of Arel e-learning technology and experience to SGI and Kasenna’s installed base of more than 1,500 corporate, education and government customers worldwide. We are very pleased to offer a complete solution for e-learning that leverages our customers’ current media streaming investment.”

“The launch of contiUlearn also equips us to bring the power of media streaming to new customers in both education and business to leverage their investments in knowledge and human resources,” he added.

Mark Gray, chairman and CEO of Kasenna, Inc., said, “We are very pleased that Arel has integrated Kasenna MediaBase as part of its continUlearn solution with SGI. The rapid integration of these technologies is a great example of how our new Developer Program can facilitate speedier launches of exciting new applications on Kasenna MediaBase.”

About SGI

SGI provides a broad range of high-performance computing and advanced graphics solutions that enable customers to understand and conquer their toughest computing problems. Media Commerce(TM) solutions from SGI enable telecommunications, broadband Internet, media and entertainment customers to create, manage, deliver and transact content over a vast range of networks. In the field of education, SGI delivers high-performance computing power to research institutions throughout the world, insight to academia and information services to administrations. Headquartered in Mountain View, Calif., with offices worldwide, the company is located on the Web at www.sgi.com.

About Arel

Arel is pushing the innovative field of e-learning to new frontiers. The company, which captured 89% of the world’s new satellite-based distance learning installation orders in 2000, produces the most advanced live and on-demand IDL systems on the market today. Taking a comprehensive approach to e-learning, Arel provides total solutions that offer satellite-, Internet- and video conferencing-based learning environments. These exciting systems, incorporating the latest in Web technologies, are the result of years of research and development. These efforts have been applauded by the numerous Fortune 500 companies that have chosen Arel to install and support their global IDL networks.

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