Fujitsu Teams up with Vertical Communications to Resell and Provide Systems Integration Services for Vertical's Integrated Communications Platform.

CAMBRIDGE, Mass. -- Joint Efforts Designed to Help Retailers Increase Revenues and Improve Call Handling At the Store/Branch Level while Leveraging Existing IT Infrastructure

Vertical Communications, Inc. (Vertical) (ASFTE.OB), a leading provider of next-generation, IP-based phone systems for small, large and distributed businesses, today announced that Fujitsu Transaction Solutions Inc. (Fujitsu) has agreed to resell and re-market Vertical's integrated communications solutions in retail and other vertical markets. With its knowledge of retailers' communications needs, Fujitsu will deploy complete, IP-based phone systems that encompass planning, provisioning and support using the Vertical Retail Suite - an integrated IP-PBX and voice application solution tailored to the unique requirements of retailers and their stores.

"This solution helps automate and integrate voice communications across the organization using a retailer's existing IT networks," said Doug Wallace, Fujitsu senior vice president of client operations. "Many retailers receive more calls to their stores than to their call centers, but cost and complexity at the store level has proven a barrier to addressing the issue of improving the customer's calling experience. And contrary to popular belief, calls directly into stores or branches can't effectively be handled by centralized call centers. The Vertical Retail Suite is designed to improve call handling at the store level through existing IT networks with the goal of increasing revenues and customer satisfaction."

"We are pleased to enter into this relationship with Fujitsu, a company that we believe combines knowledge of retailer communication needs with technical expertise and customer service," said William Y. Tauscher, chairman and CEO at Vertical. "We hope that through our combined efforts we will reach a wide array of customers who could benefit from our products and services."

The Vertical Retail Suite is built on the InstantOffice Platform, which enables distributed enterprises to improve customer call handling, automate service responses based on caller information and more intelligently route callers in branch offices and stores. The platform supports complete, IP-PBX and IP telephony services including retail applications, enterprise-wide reporting and rapid centralized management. Because the platform is standards-based, it integrates with legacy systems and equipment while providing a foundation for future applications. Other business benefits include cost-effective, rapid deployment of new communications applications, increased employee productivity and enhanced customer loyalty by creating positive experiences.

About Fujitsu Transaction Solutions

Fujitsu Transaction Solutions Inc. is a wholly owned subsidiary of Fujitsu Limited (TSE: 6702) and the IT "lifecycle solutions" provider for consumer transaction environments. The company creates and manages high availability store environments and collaborates with customers to reduce their costs and improve their profitability. Fujitsu's offerings include multi-vendor infrastructure management services, point-of-sale hardware and software, mobile devices and self service systems including U-Scan. The company has operated in North America for more than 30 years and has some 1,500 employees in the U.S., Canada and the Caribbean. Example customers include Canadian Tire, Chevron, Texaco, Loblaws, Nordstrom, Payless ShoeSource, Regal Cinema, Ross Dress for Less, REI, Staples, Stop & Shop and The TJX Companies, among others. The company also has a 50/50 joint venture with Retalix Ltd. (NASDAQ: RTLX) in StoreNext Retail Technologies LLC, the No. 1 supplier of retail technology to independent grocers and small chains. Web site: www.ftxs.fujitsu.com

About Vertical

Vertical Communications, Inc. is a leading provider of next-generation IP-based voice and data communications systems for business. Vertical combines voice and data technologies with business process understanding to deliver integrated IP-PBX and application solutions that enhance customer service and business productivity. Vertical's customers are leading companies of all sizes -- from small to large and distributed -- and include CVS/pharmacy, Household International, and Apria Healthcare. Vertical is headquartered in Cambridge, Massachusetts and delivers its solutions through a worldwide network of systems integrators, resellers and distributors. Visit http://www.vertical.com for more information.

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995.

Statements regarding the execution of our current business strategy, the potential benefits of our new business relationship with Fujitsu, our ability to provide products and services that enhance customer service and business productivity, as well as other statements that are not historical facts are "forward-looking statements." These forward-looking statements rely on a number of assumptions concerning future events and are subject to a number of risks and uncertainties that could cause actual results to differ from those contained in the forward-looking statements. These include, but are not limited to, uncertainties surrounding whether we will be able to successfully execute our business strategies; whether we will be able to achieve positive results from our new business relationship with Fujitsu; whether our customers will perceive our products and services as valuable and beneficial; volatility in our stock price as a result of the matters discussed above; the volatility of semiconductor industry cycles; our ability to achieve forecasted revenues and maintain and improve gross margins, to reduce operating expenses, and to manage cash flows (and the timing and degree of any such improvements in gross margins, reductions in operating expenses and management of cash flows); failure to integrate in an efficient and timely manner acquired companies; failure to retain and attract key employees; and other factors more fully detailed in the company's annual report on Form 10-K for the year ended June 30, 2004.

Vertical Communications and the Vertical Communications logo and combinations thereof are trademarks of Vertical Communications, Inc. All other brand and product names are used for identification only and are the property of their respective holders.