Microsoft and UGS Announce Strategic Alliance

New Product Life-Cycle Management Solution Will Change the Way Product Teams Collaborate, Innovate and Compete

REDMOND, Wash., and PLANO, Texas — May 3, 2006 — Microsoft Corp. and UGS Corp., a leading global provider of product life-cycle management (PLM) software and services, today announced a multiyear, global strategic alliance to “change the game” of how companies create innovative products by delivering the full suite of UGS® software solutions on the Microsoft® platform.

The alliance will help UGS deliver a version of the full suite of its PLM technology currently used by more than two million users — including digital life-cycle management — on the Microsoft platform. The full solution empowers manufacturers with the ability to create and manage all their product data in a easy to use and security-enhanced environment, while allowing global team members, customers, industry partners and vendors to participate in the creative process. The end result is that customers are able to be more innovative to drive profitability by getting products to market faster.

“Microsoft and UGS are transforming how manufacturers manage product data from concept to retirement,” said Steve Ballmer, CEO of Microsoft. “UGS’ rich technology on the Microsoft platform offers PLM software customers low cost of ownership. It’s a uniquely powerful set of tools to help employees and external creative teams collaborate on innovative products that meet the demands of their customers.”

UGS and Microsoft’s ongoing relationship is further evidence of how important industry partners are to Microsoft’s “People-Ready” business vision. Microsoft and UGS are providing solutions to manufacturers that empower employees to collaborate, expedite decision-making and increase efficiencies. By building on existing technology investments from Microsoft and leveraging the deep PLM knowledge and expertise of UGS, customers win.

As manufacturers realize the competitive advantage of collaborative PLM solutions — including computer-aided design (CAD) and computer-aided manufacturing (CAM) — the growth of the market continues to trend upward. In fact, the PLM market is expected to show a five-year compound annual growth rate of 9 percent, growing from $9.7 billion to $15 billion according to a recent AMR Research report, “The Product Lifecycle Management Applications Report, 2004–2009.”

In today’s global economy, manufacturers are increasingly faced with risks and opportunities to which they need to react quickly. UGS’ PLM software and services enable companies to collaborate with their industry partners worldwide through global innovation networks to deliver world-class products and services. By optimizing for the Microsoft platform, these companies tend to deliver greater customer value through solutions that are easy to use, deploy and maintain with reduced ownership and integration costs. This alliance enables a far broader set of engineering and manufacturing customers across industries, from automotive to healthcare, to realize the benefits of UGS’ solutions on the Microsoft platform.

“The UGS Microsoft alliance is a culmination of a long-term relationship focused on innovation and collaboration to deliver product life-cycle management software empowering each individual in a company and through the supply chain to contribute to global innovation networks,” said Tony Affuso, chairman, CEO and president of UGS. “Microsoft’s investment in enterprise scalability and UGS’ rapid adoption of Microsoft’s platform will enable our joint customers to increase the quality and quantity of more secure connections with trading partners around the world to speed time to market and realize the full benefit of PLM.”

As part of the agreement, Microsoft will work with UGS in its development of PLM software using a broad range of current and future Microsoft products, including Microsoft .NET, Visual Studio® 2005, ASP.NET 2.0, Windows Server™ 2003 and Microsoft SQL Server™ 2005. Teamcenter® software, UGS’ digital life-cycle management solution and the world’s most widely used PLM portfolio, and UGS Velocity Series™ portfolio, which currently run on both the Windows® client and Windows Server platforms, will be enhanced for the Microsoft platform to better serve the needs of the companies’ mutual customers in engineering and manufacturing industries.

In addition, UGS and Microsoft will collaborate on sales and marketing activities, including joint business planning, sales training, customer engagement and marketing programs.

About UGS
UGS is a leading global provider of product lifecycle management (PLM) software and services with nearly 4 million licensed seats and 46,000 customers worldwide. Headquartered in Plano, Texas, UGS’ vision is to enable a world where organizations and their partners collaborate through global innovation networks to deliver world-class products and services while leveraging UGS’ open enterprise solutions, fulfilling the mission of enabling them to transform their process of innovation.

About Microsoft
Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

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The statements in this news release that are not historical statements, including statements regarding expected benefits of the product, adoption by customers, continued innovation and other statements identified by forward looking terms such as “may,” “will,” “expect,” “plan,” “anticipate” or “project,” are forward-looking statements. These statements are subject to numerous risks and uncertainties which could cause actual results to differ materially from such statements, including, among others, risks relating to developments in the PLM industry, competition, failure to innovate and intellectual property. UGS has included a discussion of these and other pertinent risk factors in its Quarterly Report on Form 10-K most recently filed with the SEC and its registration statement on Form S-4 most recently filed with the SEC. UGS disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Microsoft, Visual Studio, Windows Server and Windows are either registered trademarks or trademarks of Microsoft Corp. in the United States and/or other countries.
Note: UGS, Teamcenter and Transforming the process of innovation are trademarks or registered trademarks of UGS Corp. or its subsidiaries in the United States and in other countries.
The names of actual companies and products mentioned herein may be the trademarks of their respective owners.

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Contact Information

Mendi Paschal

Media Contact

UGS Corp.

Contact via E-mail