Human Resources: SumTotal Acquires MindSolve Technologies, Inc.

    MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)--Nov. 14, 2006--SumTotal(R)
Systems (Nasdaq:SUMT), the largest provider of talent and learning
solutions, has acquired Gainesville, Fla.-based MindSolve(R)
Technologies, Inc., a privately held provider of performance
management software.

    "We are buying MindSolve because our strategy is to transform
SumTotal by offering best-of-breed solutions for each segment of
talent management, both in pure-play market opportunities as well as
integrated suite opportunities," said Don Fowler, chief executive
officer of SumTotal.

    According to The Yankee Group, the market for talent management
software - which deals with employee learning, performance,
compensation and recruitment - will expand "at a compound annual
growth rate of 17 percent." Researchers expect that market to be worth
approximately $2 billion by 2008.

    "By developing and selling solutions for each segment of talent
management, we believe we will address customers' demands, grow our
business and shape the market's vision for these products," added
Fowler. "We believe that once we are through the initial integration
activities, MindSolve will add a quarterly revenue run-rate of between
$1.5 million and $2 million and generate positive cash flow from
operations."

    By acquiring MindSolve, SumTotal adds its own performance
management capability to an award-winning learning management suite,
which delivers and tracks training over the Internet. According to
industry analysts, the MindSolve solution provides best-in-class,
patented technology for analyzing employee "bench strength," creating
and managing succession plans, aligning goals, appraising performance
and evaluating compensation.

    For example, Bersin & Associates - a research firm specializing in
learning and talent management - states that MindSolve offers a
"unique and compelling approach to performance management."(a) Bersin
says that MindSolve's technology offers "integration with 'balanced
scorecard' applications and a patented user interface with proven
efficiency and accuracy," which customers such as Ernst & Young,
Pfizer and Sonoco Products Corp. have purchased.

    And Gartner writes in a report titled "MarketScope for Employee
Performance Management Software, 2005" that "MindSolve has strong
overall functionality. MindSolve is most appropriate for large
companies that want deep performance management functionality and
value strong manager support tools."

    "Over the years, we've made considerable investments in R&D, so we
feel our technology is very strong," said Dan Boccabella, general
manager for MindSolve. "This merger, in the minds of MindSolve's
shareholders and management team, gives us a worldwide distribution
channel and access to the industry's leading learning solutions."

    "SumTotal has acquired a proven, best-of-breed solution, which
SumTotal customers can benefit from immediately," said Josh Bersin,
president and founder of Bersin & Associates. "We believe that
performance management solutions are becoming the core of integrated
talent management.(b)SumTotal now has the opportunity to integrate the
MindSolve solution with SumTotal's learning management suite to
deliver a complete solution for integrated performance and learning
management."

    Acquisition Terms

    Under terms of the transaction, MindSolve shareholders will
receive approximately $5.2 million in cash along with 925,000 shares
of SumTotal common stock. The company will also incur additional cash
obligations due to deal-related and retention expenses of
approximately $1.5 million. The transaction was unanimously approved
by the SumTotal and MindSolve Boards of Directors and the MindSolve
shareholders. The shares are issued pursuant to Section 4(2) of the
Securities Act of 1933, as amended and Rule 506 of Regulation D.

    Craig-Hallum Capital Group LLC provided financial advisory
services to SumTotal Systems in this transaction.

    Updated Guidance for the Fourth Quarter of 2006

    Under generally accepted accounting principles, or GAAP, SumTotal
estimates that MindSolve will add between $0.1 million and $0.2
million in revenue and between $0.7 million and $0.9 million in
expenses resulting in an increase in the net loss of between $0.5
million and $0.8 million.

    On a non-GAAP basis, SumTotal estimates that MindSolve will add
between $0.3 million and $0.4 million in revenue and add between $0.5
million and $0.7 million in expenses, resulting in a reduction in the
net income of between $0.1 million and $0.4 million.

    The weighted average number of shares for the quarter will
increase by approximately 480,000 as a result of this transaction.

    The reconciling items between GAAP and non-GAAP net income (loss)
are estimated to be $0.2 million related to the acquisition adjustment
to write-down deferred revenue, and $0.2 million for amortization of
intangibles.

    In managing its financial performance and establishing internal
financial plans and targets, the company uses non-GAAP financial
measures. Management believes that certain non-GAAP financial measures
provide greater transparency in managing its operations and business.
The company has presented these non-GAAP financial measures as
supplemental information to allow investors to see how management
views the operating performance of the company and how it communicates
the performance internally. The company has historically reported
similar non-GAAP financial measures to its investors and believes that
the inclusion of comparative numbers provides consistency in its
financial reporting. This non-GAAP information is subject to material
limitations and is not intended to be used in isolation or instead of
results prepared in accordance with GAAP, but rather in addition to
the GAAP results. Also, the non-GAAP information prepared by SumTotal
is not necessarily comparable to non-GAAP information provided by
other companies.

    Conference Call

    SumTotal will host an investor conference call and webcast on
Tuesday, November 14, 2006, at 5:30 a.m. (Pacific Time) / 8:30 a.m.
(Eastern Time) to discuss SumTotal's acquisition of MindSolve. A live
audio webcast is available to investors and the public at
www.sumtotalsystems.com under the Investor Relations section, or
interested parties may call the U.S. toll-free number 866-406-5408,
access code: 8109658. The international dial-in is 973-582-2770,
access code: 8109658

    In addition to the webcast and telephone lines, a telephone replay
will be available on Tuesday, November 14, 2006, beginning at
approximately 12:00 p.m. (Pacific Time) through the close of business
(Pacific Time) on Tuesday, November 21, 2006. Investors and other
parties can access the replay by dialing the U.S. toll-free number:
877-519-4471, access code: 8109658. The international dial-in number
is 973-341-3080 access code: 8109658.

    About SumTotal Systems, Inc.

    SumTotal Systems (NASDAQ:SUMT) is the largest provider of talent
and learning solutions. SumTotal deploys mission-critical solutions
that align talent and knowledge with business goals to generate
significant bottom-line results. With more than 17 million users
worldwide, SumTotal has helped accelerate performance and profits for
more than 1,500 of the world's best-known companies and government
agencies including Accenture, Aetna, Cendant, DaimlerChrysler, Delta
Air Lines, Harley-Davidson, Microsoft, Novartis, PNC Bank, U.S. Army,
U.S. Air Force, U.S. Navy, U.S. Coast Guard, U.S. Bancorp, United
Airlines, Vodafone, Wachovia and Wyeth. SumTotal has offices
throughout the United States, in London, Paris, Frankfurt, Singapore,
Sydney, Tokyo, Hong Kong and Hyderabad. For more information about
SumTotal's products and services, visit www.sumtotalsystems.com.

    SumTotal and the SumTotal logo are registered trademarks or
trademarks of SumTotal Systems, Inc. and/or its affiliates in the
United States and/or other countries. Other names may be trademarks of
their respective owners.

    Safe Harbor Statement/ Forward-Looking Statements

    Information in this press release and accompanying conference call
contain forward-looking statements and management's estimates
regarding future performance of the company, including without
limitation, updated financial guidance for the fourth quarter ending
December 31, 2006. These statements represent SumTotal Systems'
current expectations or beliefs concerning its results and future
events, including statements, among others, regarding its financial
guidance for estimated GAAP and non-GAAP revenue, expenses, loss, and
income; the company's ability to successfully integrate the MindSolve
business, product offerings and technology as a result of the
acquisition; revenue adjustments; continued growth in deferred revenue
balance and pipeline; and the company's competitive position and
business model, including its leadership position. These statements
are only predictions and not historical facts or guarantees of future
performance or events and are based on current expectations,
estimates, beliefs, assumptions, goals and objectives, and involve
known and unknown risks, uncertainties and other factors that may
cause actual results to differ materially. Readers of this press
release are cautioned not to place undue reliance on any
forward-looking statements. Additional factors that could cause actual
results to differ include, but are not limited to, the failure to: (i)
successfully integrate the MindSolve business and product offerings
into the SumTotal business and product offerings in a timely manner;
so that, the financial projections will be met; (ii) successfully
achieve the expected synergies from MindSolve's technology and
SumTotal's sales and marketing resources; (iii) successfully scale the
MindSolve business without significant additional expense; (iv) retain
MindSolve customers; (v) accurately forecast the acquisition-related
integration and allocation of the purchase price to in-process
research and development, goodwill and other intangibles; (vi) retain
key employees; and (vii) successfully address technological
developments and standards and changing client needs. These and other
risks and other important factors disclosed previously and from time
to time in SumTotal Systems' filings with the Securities and Exchange
Commission, including the company's annual report on Form 10-K filed
on March 28, 2006, its quarterly report on Form 10-Q filed on November
9, 2006, its Form S-3/As filed on September 28, 2006, and October 2,
2006, and its Form 8-Ks. SumTotal Systems assumes no obligation to
update the information contained in this press release or discussed in
today's conference call. The forward-looking statements contained in
this release are made as of November 14, 2006, and SumTotal does not
assume any obligation to update such statements in this press release
or in the accompanying conference call to reflect events or
circumstances occurring after the date of this release.

    CONTACT: SumTotal Systems, Inc.
             Media contact
             Bill Perry, 614-975-7538
             bperry[at]sumtotalsystems.com
             or
             Investor contact
             Gwyn Lauber, 650-934-9594
             glauber[at]sumtotalsystems.com