SumTotal Systems Recognized as Learning Marketshare Leader in Latest Industry Research Report

July 6, 2004

MOUNTAIN VIEW, Calif.–July 6, 2004–A new report by Bersin & Associates, leading provider of What Works(TM) research and consulting services in e-learning technology and implementation, has confirmed that SumTotal Systems (Nasdaq:SUMT), the industry’s largest provider of learning and business performance technologies, services and processes, owns the largest market share by revenue in the learning management system (LMS) marketplace. The comprehensive report, titled “Learning Management Systems 2004,” presents in-depth LMS market research and provides detailed profiles of the industry’s top 17 LMS vendors. It is designed to help buyers understand the marketplace and make better decisions on LMS selection, implementation and strategy.

Among the top 17 vendors covered in the report, SumTotal has a 22% market share of the entire LMS market (as measured by revenue), significantly higher than the next closest competitor.

“One of the primary goals of our recent merger was to seize a leadership role in a fragmented marketplace, and to use that position of strength to help even more organizations increase bottom line results with our technologies and services,” said R. Andrew Eckert, SumTotal CEO. “We are pleased to see confirmation of our market position in this report. We feel our leadership offers significant benefits to customers in the way of greater service and support resources, greater research and development resources and broader implementation experience than anyone else in our industry.”

The Learning Management Systems 2004 report states that “some of the key benefits of SumTotal’s solution include a focus on analytics and measurement, a strong focus on integrating the LMS into sales, channel and customer service business processes, and experience and vision in the market.”

“Global enterprises select and implement LMS systems as a piece of corporate IT infrastructure,” said Josh Bersin, principal and founder of Bersin and Associates. “In these companies, the LMS is not just an application — it’s an essential component of corporate ‘plumbing.’ It must use the right IT architecture, fit well into other systems, and be manageable and supportable by IT. Vendors who focus here must have robust multi-language/multi-currency support, strong IT architectures, and experience integrating their systems with a wide variety of HR and other applications. SumTotal has clearly demonstrated its ability to succeed in this market segment.”

TotalLMS is an enterprise-wide, globally scalable learning management platform and central component of the SumTotal Enterprise Suite that leverages learning and knowledge management and manages learners, content and resources to enhance business performance.

TotalLMS provides unparalleled levels of functionality and support for any blend of delivery environment: self-paced Web, live interactive Web, instructor-led courses, on-the-job training, seminars, mentoring and written documentation. Based on an open-architecture, TotalLMS integrates seamlessly with other learning systems and ERP applications across the enterprise.

Other highlights from the Bersin and Associates study include:

  • A new LMS Market Map(TM), a graphical display of where vendors play to make it easy for buyers to select the right “short-list” of vendors;
  • Research on advanced LMS features, including suites, hosting strategies, analytics, HR integration, performance planning and workflow integration;
  • Market trends and directions, including the evolution of the e-learning space and what Bersin & Associates think is coming next.

More details about the Learning Management Systems 2004 study can be found at www.bersin.com. The study can be purchased at http://store.bersinassociates.com/lms-2004.html

About SumTotal Systems
SumTotal Systems Inc. (Nasdaq:SUMT) is the business performance and learning technology industry’s largest single provider of technologies, processes and services. Formed by the merger of industry pioneers Docent and Click2learn, the company is uniquely focused on helping organizations harness and manage mission-critical intellectual power to solve real-world business problems and produce significant bottom-line results. SumTotal has helped accelerate performance and profit for more than 600 of the world’s best-known companies, including Microsoft, Cingular Wireless, Vodafone, Lucent, Accenture, Cendant, Harley-Davidson, Wyeth, Wachovia and D & B. SumTotal Systems is headquartered in Mountain View, CA, with offices throughout the US, as well as in London, Paris, Heidelberg, Sydney, Tokyo and Hyderabad, India.


Safe Harbor Statement/Forward-Looking Statements

Information in this press release contains forward-looking statements, including statements about future business operations, industry leadership, financial performance and viability, customer benefits, timing and features of our product offerings, acceptance of our solutions, expected innovation, and other potential benefits and synergies to be derived from the transaction and other market conditions that include risks and uncertainties. These statements are not historical facts or guarantees of future performance or events and are based on current expectations, estimates, beliefs, assumptions, goals and objectives, and SumTotal Systems does not assume any obligation to update any such forward-looking statements. These statements are not guarantees of future results and involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from the results expressed or implied by these statements. You are cautioned not to place undue reliance on any forward-looking statements. Factors that could cause actual results to differ include, but are not limited to, (i) the challenges and costs of integration and restructuring and the ability to achieve anticipated synergies associated with the recent merger;

(ii) an emerging and rapidly evolving market, (iii) market uncertainty with respect to the merger and acceptance of SumTotal Systems’ product offerings by customers and partners; (iv) adverse changes in general economic or market conditions; (v) delays or reductions in information technology spending; (vi) the ability to attract and retain highly qualified employees; (vii) intense competition in the marketplace and

(viii) other events and other important factors disclosed previously and from time to time in SumTotal Systems’ filings with the Securities and Exchange Commission, including its quarterly report on Form 10Q filed on May 17, 2004.