| SUGAR LAND, Texas, Jan. 5 /PRNewswire/ -- NEON(R) Systems, Inc. (Nasdaq: NESY), a leading provider of Enterprise Access
 and Integration software products, today announced it has signed an agreement
 for the development and worldwide distribution rights to Sterling Software,
 Inc.'s (NYSE: SSW) SOLVE:Diplomat product.  Terms of the agreement included a
 $3.5 million payment by NEON Systems.  NEON Systems has the option to acquire
 full ownership of the intellectual property rights associated with the product
 for an additional payment. Historically, Diplomat was utilized to integrate
 disparate Customer Relationship Management (CRM) and Call Center systems.
 NEON Systems intends to increase the scope of the Diplomat product, which will
 evolve it into a single, unified EAI product line encompassing major computing
 platforms and applications.  This key expansion of the NEON Systems product
 family will provide a comprehensive EAI solution.  In addition to the
 distribution rights, NEON has been granted a source code license and has hired
 the Cary, North Carolina-based software development lab dedicated to the
 Diplomat product.
 "Diplomat was first deployed at a customer site in 1993.  The technology
 has developed into a proven and established product that is highly
 complementary to our System/390 Enterprise Access and Integration products.
 The extensible software base, along with the key development talent, will
 allow NEON Systems to extend mission critical access and integration solutions
 to UNIX and Windows platforms to support front-office CRM, ERP, Call Center,
 and other high-value EAI initiatives," said Joe Backer, president and CEO,
 NEON Systems.  "We plan to provide excellent support for existing Diplomat
 customers and continue, without interruption, the ongoing sale of the product.
 In the future, we will extend the product with intelligent adapters for a
 variety of applications.  Our superior support of the System/390 platform will
 make NEON Systems EAI products the clear choice for customers who are looking
 for true enterprise-class business integration."
 Diplomat offers bi-directional sharing of customer information across
 multiple systems with different interfaces, databases, and data models,
 creating synergy among dissimilar environments.  By providing legacy,
 client/server, and enterprise management platform integration, without the
 cost of replacing existing applications or re-training personnel, Diplomat
 enhances communication between different business units to deliver better
 service to the customer.
 NEON Systems, Inc. is a leading provider of Enterprise Access and
 Integration, Security, and Subsystem Management software products for all
 industries.  NEON Systems' Enterprise Access and Integration e-business
 solution delivers integrated, global information sharing in cross-platform,
 multi-functional environments via the Internet or client/server.  Many Global
 2000 companies have chosen NEON Systems software for the revitalization of
 legacy applications, e-commerce, enterprise application integration, and
 business-to-business integration.  NEON Enterprise Security Management
 software products help companies protect valuable information with
 encryption/decryption technology for the Internet and password synchronization
 for interoperable computing environments.  NEON Enterprise Subsystem
 Management software products economically enhance and maintain the high
 availability, integrity, and performance of key CICS and IMS mainframe
 environments as the demand for existing and new applications increases.
 Headquartered in Sugar Land (Houston), Texas, NEON has sales, support, and
 distributor offices covering 25 countries around the world.  NEON's website
 can be visited at www.neonsys.com.
 This press release contains both historical information and forward-
 looking information.  Numerous important factors affect the Company's
 operating results and could cause the Company's actual results to differ
 materially from the results indicated in this press release or in any other
 forward looking statements made by, or on behalf of, the Company, and there
 can be no assurance that future results will meet expectations.
 NEON is a registered trademark of NEON Systems, Inc.
 All other trademarks are the property of their respective companies.
 SOURCE  NEON Systems, Inc.
 -0-                             01/05/2000
 
 /CONTACT:  Susan Allen Farrell of NEON Systems, Inc., 281-634-8225, or
 fax, 281-242-3880, or email, sfarrell@neonsys.com/
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 /Web site:  neonsys.com
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