Press Release

Selectica’s Sales Execution and Contract Management Solutions to Be Powered by Network Attached Processing

San Jose and Mountain View, Calif. – June 20 , 2006 – Selectica (NASDAQ: SLTC), a leading provider of sales execution and contract management applications, and Azul Systems, the pioneer of the industry’s first network attached processing solution, today announced a strategic partnership whereby Selectica’s applications are verified to run on the Azul compute platform. The partnership ensures that customers get greater performance, reliability and scalability from their Selectica applications.

Through this partnership, Selectica’s on-premise and on-demand software for product configuration and contract management will be “Azul Verified” and deployed on the Azul Compute Appliance platform. Azul Compute Appliances provide Java™ based-applications with massive computing and memory resources that reside on the network and can be tapped dynamically by multiple applications on-demand.

“The Azul-based solution provides our customers with a more robust and reliable service with consistent response times and greater control over costs,” said James Dias, vice president of marketing and sales at Selectica. “Selectica-Azul solutions raise the bar on performance with sales and contract business applications. They enable customers to reduce their hardware requirements, decrease their data center real estate, power and cooling costs while dramatically increasing their overall return on investment and potential for growth.”

As part of the agreement, both companies have agreed to deploy each other’s solutions. Selectica will brand their on-demand solutions with the “Powered by Azul” logo.

Azul will use Selectica’s Fastraq on-demand sales execution and on-demand contract performance management applications internally. This gives Azul real-time insight into its customer relationship management, increasing compliance, maximizing revenue and limiting risk exposure.

“Selectica’s Java-based, scalable, on-demand software provides best-of-breed solutions for automating key business processes in the areas of sales execution and contract management,” said Matt McLaughlin, vice president worldwide field operations at Azul Systems. “The combination of Selectica and network attached processing technology validates the capability of this infrastructure model to deliver the functionality customers demand and the scalability, reliability and overall business value CIOs desire from their IT investments.”

About Azul Systems
Azul Systems Inc, has pioneered the industry's first network attached processing solution, designed to deliver massive amounts of compute capacity as a shared network service to transaction-intensive applications and services. Without application level modifications, binary compatibility requirements or operating system dependencies, this transparent new compute model significantly increases utilization across existing infrastructure, enables unprecedented application scalability and predictably ensures high levels of service with up to 50% less cost than traditional computing models.   More information on Azul Systems can be found at www.azulsystems.com.

About Selectica, Inc.
Founded in 1996, Selectica (NASDAQ: SLTC) provides its customers with smart technology that accelerates profitability by automating complex business processes in the areas of sales execution and contract lifecycle management. Available on-demand or as a fully customized installed software application, the company’s high-performance solutions provide a critical link between CRM and ERP to accelerate sales configuration, eliminate order inaccuracies, ensure compliance and limit risk exposure.

Selectica customers represent leaders in manufacturing, technology, healthcare and telecommunications, including: ABB, Alcoa, Applied Bio Systems, Bell Canada, Cisco, Dell, General Electric, Fireman's Fund Insurance Company, Hitachi, International Paper, Juniper Networks, Rockwell Automation, Seton Hospital, Tellabs, Time Warner, Triad Hospitals and 7-Eleven. Selectica is headquartered in San Jose, CA. For more information, visit the company’s Web site at www.selectica.com.

Investor Contact:
Tony Rossi, Financial Relations Board for Selectica
310-854-8317, trossi@financialrelationsboard.com

Media Contacts:
Terri Douglas, Catapult PR-IR for Selectica
303-581-7760, ext. 18, tdouglas@catapultpr-ir.com

Karen Reynolds, Azul Systems
650-230-6581, karen@azulsystems.com

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Forward Looking Statements
The statements contained in this release that are not purely historical are forward-looking statements within the meaning of Section 21E of the Securities and Exchange Act of 1934, including statements regarding Selectica's and its customers' expectations, beliefs, hopes, intentions or strategies regarding the future and expectations regarding performance improvements or increases in sales attributable to Selectica's existing and new products. All forward-looking statements included in this document are based upon information available to Selectica as of the date hereof, and Selectica assumes no obligation to update any such forward-looking statement. Actual results could differ materially from current expectations. Factors that could cause or contribute to such differences include, but are not limited to, market and customer acceptance of new products of Selectica including Fastraq, the contract management products and the applications developed with joint venture partners, the success of the ongoing restructuring of Selectica’s operations, and other factors and risks discussed in Selectica's Annual Report on Form 10-K for the fiscal year ended March 31, 2006 and in other reports filed by Selectica with the Securities and Exchange Commission.

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