Major Managed Services Contract Win

30 July 2010

SQS Software Quality Systems AG

("SQS" or "the Company")

Major Managed Services Contract Win

SQS Software Quality Systems AG (AIM: SQS.L), the world's largest pure play supplier of independent software testing and quality management services, is pleased to announce a major new Managed Services contract win and to provide an update on progress for its Managed Services offering.

SQS has signed a significant new Managed Services contract with an existing client, estimated to be worth at least €15 million over a period of three and half years. This is the biggest single client contract ever signed by SQS. Under the terms of the contract, SQS will provide a comprehensive set of services including test management, design, execution and evaluation of test cases and test documentation. In addition to local onshore consultants, SQS will engage, to a significant degree, its offshore Test Centre in Cairo, Egypt. The contract is not expected to make a significant contribution to revenue in the current year.

Total order intake for Managed Services (including the above contract) in the year to date stands at approximately €40 million, compared to the €15 million reported at the time of the Company's AGM on 26 May 2010. Of this, the Company expects approximately €9 million will be recognised in the current financial year.

Rudolf van Megen, Chief Executive Officer of SQS commented, "We are very pleased that SQS has been chosen as a strategic partner for the provision of Managed Software Testing services by another existing client. The winning of this major Managed Services contract is a clear endorsement of our strategic decision to focus on managed testing services and increase the level of this type of business as a proportion of overall revenues. We look forward to continued success in this area."

 SQS will be announcing results for the six months to 30 June 2010 on 8 September 2010.

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About SQS

SQS is the world's largest pure play supplier of independent software testing and quality management services. SQS consultants design and oversee quality management processes during the software and IT systems life cycle and test the resulting products for errors and omissions.

Headquartered in Cologne, Germany, SQS has approximately 1,700 employees across Europe, Asia, North America and Africa. The Group has a strong presence in Germany (Cologne, Munich, Frankfurt, Stuttgart, Goerlitz and Hamburg) and in the UK (London, Woking, Birmingham, Manchester, Belfast), Ireland, the Netherlands, Switzerland, Austria, Sweden, Norway, Finland, India, Egypt, the United States and South Africa. SQS also has a minor stake in an operation in Portugal and a partnership operation in Spain.

With more than 5,000 completed projects, SQS has a strong customer base including 20 FTSE-100 companies, half of the DAX 30 and nearly a third of the STOXX-50. It supports clients in a wide range of industries, including major corporations such as Allianz, Beazley, BP, Centrica, Commerzbank, Daimler, Deutsche Post, Generali, JP Morgan, Meteor, Reuters and Volkswagen.

www.sqs-group.com