AppNet Systems Merges with Software Services Corp.

BETHESDA, Md.--(BUSINESS WIRE)--Aug. 31, 1998--AppNet Systems Inc., a rapidly growing provider of e-commerce services, has completed a merger agreement with Software Services Corp. of Ann Arbor, Mich.

Headquartered in Bethesda, AppNet also has facilities in Ann Arbor, Falls Church, Va., and Seattle, Wash.

AppNet recently announced an aggressive growth plan backed by $100-million in venture capital and a projected $100-million in debt financing. Software Services Corp. (SSC) will become a wholly owned subsidiary of AppNet under the terms of the merger agreement.

"AppNet provides Internet-empowered business solutions to major corporations throughout the world," Ken S. Bajaj, AppNet's chairman and CEO, said. "Our goal as the premier company in this market space is to more than triple our annual revenue by the end of 1998. Through acquisitions and increased sales we expect to top $200-million in annual revenue before the Year 2000."

Bajaj said that Jack G. Reinelt will continue to serve as president of Software Services. SSC's corporate headquarters will remain in Ann Arbor.

"This move blends the e-commerve and Internet expertise of AppNet with SSC's proven experience in network services, application development and IT consulting," Bajaj said. "The combination will enable us to better serve the customers of both companies as we move into a new generation of web-enabled information services."

SSC's President Reinelt added, "We believe that our customers' ability to conduct electronic commerce will become a critical business asset over the next few years. It is our job to anticipate customer needs and provide our customers with the right solutions. In merging with AppNet we see a great opportunity to rapidly meet the complete electronic commerce needs of our customers and to integrate these new capabilities with our own."

Robert G. Harvey, senior vice president for software development operations at AppNet, noted that e-commerce and the web-enabled software applications upon which it is based represent a new frontier in information services.

"Industry analysts conservatively estimate that e-commerce applications development will account for more than $32 billion by the Year 2002," Harvey said. "The Internet computing and e-commerce market in total is expected to exceed $170 billion. We plan to be at the forefront of that development as the world's leading full-service provider of e-commerce applications, business solutions and consulting services."

The merger is expected to have a positive impact on employment at SSC and AppNet facilities in Southeastern Michigan over the next several years based on industry growth projections and the company's own aggressive investment plans.

"Within the next 12 months alone, we expect AppNet and SSC employment in Michigan to grow by 50 percent," Bajaj said. "AppNet and Software Services Corporation combined will have more than 250 employees and annual revenues of more than $25-million."

Formed in 1976, SSC has more than 200 employees and is a recognized leader in the development of information technology (IT) solutions and services. The company specializes in business solutions that address the infrastructure and application needs of its clients and has been a Microsoft Certified Solution Provider since 1993. SSC customers include Ford Motor Co., United Technologies, Blue Cross/Blue Shield of Michigan, AAA and AT&T.

Founded in 1997, AppNet has moved aggressively to become a dominant supplier of e-commerce services. In March, the company acquired Ann Arbor-based Arbor Intelligent Systems Inc., a leading developer of object-technology solutions through consulting, custom development, training and products.

Two months later, AppNet purchased LOGEX International, LLC. Located in Falls Church, LOGEX specializes in online catalogue creation, graphic design, payment processing, extranet and intranet development, and e-commerce marketing services.

AppNet also operates an e-commerce service center in Seattle that provides electronic transaction processing and fulfillment via the Internet. Major AppNet customers include Ford Motor Co., Blue Cross/Blue Shield, Microsoft, Texas Instruments, Chrysler Corp., Corel, EDS and Crown Books.

AppNet provides a full range of e-commerce services, including consulting and systems integration, Internet-enabled application development and e-commerce processing. AppNet Systems Inc. can be found on the Internet at http://www.appnet.net. Software Services Corp. is located at http://www.software-services.com.

CONTACT: Software Services Corp.

Gary Andrews, 800/448-1568

[e-mail]

or

AppNet Systems Inc.

Julie Colton, 301/581-2465

[e-mail]

or

AppNet Systems Inc./Arbor Intelligent Systems, Inc.

Amy Brophy, 734/996-4238 ext. 10

[e-mail]

or

AutoCom Associates/MacDonald Communications

Larry Weis, APR, 248/647-8621

[e-mail]