SumTotal Systems Extends Global Reach Into Korean Learning Market with Partner COSMO iNET

Leading learning provider selects TotalLMS, TotalLCMS and TotalDashboard as core components of learning solutions for enterprises and educational institutions.

MOUNTAIN VIEW, CA (September 23, 2004) – SumTotal Systems (NASDAQ: SUMT), the industry’s largest provider of learning and business performance technologies, services and processes, today announced that it has expanded its global presence into Korea with new partner COSMO iNET, that country’s leading e-learning provider. COSMO iNET will resell SumTotal’s award-winning technology as a core component of the learning solutions it provides to enterprises and educational institutions in this fast-growing market.

COSMO iNET has provided online learning solutions, training and implementation and integration services since the inception of the Korean e-learning industry around 1997. Driven by a government initiative to encourage e-learning adoption nationwide, and an advanced, national broadband network, the market has expanded to nearly $87million, with anticipated growth of 57% in 2004 alone.

In July, the Korean government introduced a special law on the development of e-learning businesses, supporting the online learning industry in becoming one of the nation’ core industries.
Under the law, representatives from eight ministries, including the Ministry of Commerce, Industry and Energy, the Ministry of Human Resources & Education, the Ministry of Finance and Economy and the Ministry of Planning and Budget, will set up a committee for developing the e-learning industry. As part of its development initiative, the committee will encourage state-funded educational organizations to raise the e-learning ratio of their total educational programs to 20 percent. The government also will promote the corporate e-learning market.

To capitalize on the market potential, COSMO iNET needs to provide its customers with a scalable learning management framework that can track individual learning activities and completion of mandated training. Following an extensive evaluation of learning technology providers, COSMO iNET chose SumTotal for its industry leadership and experience; strategic business practices and substantial product roadmap; global presence and multi-language capability; and its flexible product architecture, which enables organizations to meet specific requirements established by the Korean government. COSMO iNET will make SumTotal’s TotalLMS, TotalLCMS and TotalDashboard analytics module the foundation of the learning solutions it provides to Korean corporations and universities.

“The Korean government is committed to e-learning as the core strategy for education renovation and national human resource development in our country, making it critical for both enterprises and educational institutions to acquire the best technologies to help address that mandate,” said Ho-Joon Lee, Ph.D., CEO of COSMO iNET. “We anticipate that the combination of SumTotal’s industry-leading technology solutions and COSMO iNET’s strong sales and services capabilities will create a powerful, new force in the Korean e-learning market.”

“As an innovator and pioneer in its country’s learning industry, COSMO iNET shares a history similar to SumTotal’s and represents an ideal partner for our entry into the Korean market,” said R. Andrew Eckert, SumTotal CEO. “It is uncommon to have a situation where both the government and private sectors unanimously and enthusiastically support and pursue technology-based learning initiatives. We are excited by the opportunity to work with COSMO iNET to meet such a widespread need and to grow our global marketshare with the addition of this vital market.”

About COSMO iNET Co., Ltd.

COSMO iNET CO., LTD. is an information technology (IT) company, delivering a broad array of technology and technical service solutions to the commercial and government markets in Korea. COSMO iNET provides information strategic planning, systems design and integration, IT outsourcing, application software development and management, help-desk and desktop services to clients. The HRD Center, COSMO iNET’s e-learning team provides e-learning solutions, services and consultation.

Having delivered best-in-class consulting, application maintenance, development, and help-desk services to the affiliated companies for the last 15 years as a small unit of Seoul, Korea-based COSMO Corporation, COSMO iNET was refounded in 2002, with the mission to provide customers with solutions crafted to meet their specific business challenges and to enable them to extract maximum returns on their IT investment. COSMO iNET’s main clients include LG Electronics, LG Chemicals, Hyundai Motors, Doosan, Ssangyong Motors, Daewoo Information Systems, Land Mark Asia, and LG Hitachi.

About SumTotal Systems, Inc.

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.