Integrated Systems Acquisition of Epilogue Technology Promises to Open New SNMP Markets.

ALBUQUERQUE, N.M.--(BUSINESS WIRE)--July 30, 1996--Following today's signing of a definitive agreement under which Integrated Systems, Inc. (NASDAQ:INTS) of Sunnyvale, Calif., will acquire Epilogue Technology Corporation, company executives are predicting that the merger of ISI's real-time, embedded programming technology with Epilogue's Simple Network Management Protocol (SNMP), Remote Monitoring (RMON), and TCP/IP Internet connectivity products will open up a new market for embedded network management applications. In addition to a new generation of SNMP and RMON products for emerging networking technologies such as ATM and Gigabit Ethernet, embedded SNMP is already making its way into automotive applications, consumer electronics, and other applications.

"By joining the development and marketing team at ISI, Epilogue will be in a stronger position than ever to promote embedded network management technology," said David Preston, President and COO of Epilogue Technology. "We have already demonstrated the potential of embedded SNMP through our licensing agreements with Texas Instruments, National Semiconductor, Level One, and other silicon manufacturers. In fact, our recent agreement with Texas Instruments has revolutionized development of their ThunderLAN chip technology; soon you will see management and monitoring solutions for 100BASE-T available from TI thanks to our technology. Now that we are part of ISI, we can work even more closely with new customers to push the technological envelope even further."

"This relationship between ISI and Epilogue Technology will help drive the cost of Internet technology down even further and will give these companies a leadership role in a new technological infrastructure," said Tam Dell'Oro, founder of the Dell'Oro Group. "The name of the game is lower cost and shorter time to market. By integrating network management in the silicon and taking the burden off the network manufacturer, network vendors can focus on delivering higher-level functionality -- the overall platform deliverable has just been ratcheted up a notch."

"We have been customers of both ISI and Epilogue Technology for some time and we are delighted to see these two vendors combine their technological resources," said Ron Morita, Vice President of Applications Engineering for UB Networks. "Bringing together Epilogue's SNMP and RMON technology and ISI's embedded systems programming promises to create opportunities for a vast array of new Internet-ready networking products."

Epilogue Technology has been working to promote a variety of new communications technologies. Epilogue has been active in mobile communications and is a co-founder of the Mobile Management Task Force (MMTF), a consortium of companies that includes IBM, Motorola, and Xircom. The MMTF is chartered to promote standards-based Internet connectivity and management solutions for the emerging mobile computing market. Epilogue is also working to create a new paradigm for user-based network management software built around HTML. Epilogue plans to unveil a new network management technology for the World Wide Web at the NetWorld+Interop exhibition in Atlanta in September.

"ISI's acquisition of Epilogue Technology Corporation will extend our reach into new markets," said David St. Charles, president and chief executive officer of Integrated Systems. "We are already seeing embedded SNMP transactions deployed in networking silicon. The real growth market will be in consumer electronics, satellite communications, and other areas we haven't even dreamed of yet. By acquiring the market leader for off-the-shelf Internet standards technology we have a definitive advantage over other real-time operating system vendors. Epilogue has already proven itself in the computer networking arena, and we intend to take their technology to an entirely new generation of embedded system customers."

In addition to conventional network management applications for bridges, hubs, and routers, Internet connectivity and network management protocols are finding new applications in consumer electronics markets. For example, DSS home satellite system manufacturers are exploring ways to use SNMP transactions for interactive programming. Embedded SNMP is also making its way into automobile diagnostic and control systems where internal networks within the automobile are monitored and managed. The growing market for Internet access via cable television will also rely on SNMP technology embedded in chips that reside in set-top cable boxes. Today, cable modems are deploying Epilogue's Envoy SNMP and Attache Plus TCP/IP software in their products. New applications for embedded SNMP technology are coming to light almost daily.

"Our vision is to shorten the time-to-market and cost-reduce Internet connectivity, so that we can open new demand for 'Internet-ready' consumer devices," noted Karen Auerbach, CEO of Epilogue Technology. "Embedded devices will increasingly utilize the Internet and the World Wide Web to retrieve, send, share, and manipulate information. Scalable embedded operating software and networking technologies will be essential for these embedded Internet devices to be made in a cost effective manner. Several years ago, Epilogue demonstrated an SNMP-controllable toaster, in order to make the point that small, inexpensive devices could be effectively networked and managed. Now we are seeing the realization of this demonstration with the proliferation of set-top boxes, home satellite systems and Internet-ready televisions. SNMP will play a key role in managing these and other consumer-oriented products."

Risks in Forward Looking Statements

The statements contained in this presentation that are not purely historical are forward-looking statements, including Integrated Systems' expectations, hopes or intentions regarding the future. Actual results could differ materially from those discussed in forward-looking statements. Among the factors that could cause the results to differ materially are those discussed in the Company's S-3 dated April 12, 1996 and other documents filed with the Securities and Exchange Commission from time to time. Copies of these documents are available from the Securities and Exchange Commission (Worldwide Web http://www.sec.gov) and from Integrated Systems, Inc.

Epilogue Technology Corporation

Epilogue Technology Corporation specializes in developing and marketing standards-based network management and protocol software products and support services to computer OEMs and computer systems manufacturers. Epilogue has licensed its products to more than 300 companies worldwide including AT&T, Cisco Systems, IBM, Network General Corporation, Northern Telecom, and Siemens, among others. Epilogue customers have shipped more than two million network devices containing Epilogue Technology products. Epilogue Technology Corporation is located at 10501 Montgomery, Suite 250, Albuquerque, NM; telephone: [phone]; fax: [phone].

Integrated Systems

Headquartered in Sunnyvale, California, Integrated Systems, Inc. (NASDAQ: INTS) is the leading worldwide provider of embedded technology for telecom/datacom, embedded Internet, multimedia/consumer electronics, office and retail automation, automotive, and aerospace industries. pSOSystem is the operating software of choice for high-volume embedded applications that depend on reliability, high-performance, and low manufacturing costs. At more than twice the size of its nearest competitor, ISI reported $84.4 million total revenues for the fiscal year ending February 29, 1996, an increase of 45% over the previous year. Founded in 1981, Integrated Systems' worldwide presence includes sales and service offices throughout Asia, Europe, and North America.

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