Neoware Moves into a Leadership Position in Thin Client Market

Neoware Number Two in U.S. Shipments in 2001, According to IDC


KING OF PRUSSIA, Pa., July 30, 2002 (PRIMEZONE) -- Neoware Systems (Nasdaq:NWRE), the leading supplier of award-winning software, services, and solutions for the Appliance Computing market, today announced that, according to a new report from International Data Corporation (IDC), the Company has achieved the fastest growth in the thin client appliance market, growing at more than four times the industry's rate, and gained the most market share of any company in the industry during 2001.

In the United States, Neoware was the biggest market share gainer, with growth of 136%, and grew to number two in market share from number seven in the prior year. Worldwide, the Company's market share doubled in 2001, giving Neoware the largest worldwide market share gain for the year, even without including sales from Neoware's acquisition of the NCD ThinSTAR product line and its alliance with IBM, both of which occurred in 2002.

According to the report, Neoware's shipments grew at more than four times the overall thin client market, which experienced robust 21% unit growth in 2001, compared to the PC market, which saw a 4% decline. IDC expects thin client market unit shipments to grow at a nearly 30% compound annual growth rate between 2002 and 2006.

"Neoware delivered significant market share growth in 2001," stated Michael Kantrowitz, Neoware's President and CEO. "The fact that we have grown our business at more than four times the rate of our industry reflects the power of our operating model, and the fact that we offer clear, demonstrable benefits to customers. We believe that thin client appliance computing offers true value and savings for customers, and that Neoware is well positioned to continue to deliver these benefits as our market continues its growth."

Neoware believes that its growth in the thin client market is a result of the software-powered business model that it adopted approximately two years ago. In contrast with its hardware competitors, Neoware focuses significantly more resources on thin client appliance software, enabling it to offer more software capabilities and stay ahead of its competition. Neoware provides customers with a powerful, flexible appliance platform that can be upgraded in the field to run virtually any thin client operating system, protecting customer's investments and eliminating the need to change hardware when requirements change. Because of its business model, Neoware is able to provide additional product features to its customers at a unit price comparable to less full-featured thin clients from hardware competitors, providing greater value. By offering complete end-to-end support, Neoware further distinguishes itself from its hardware competitors with technical assistance not only for thin client appliances, but for server-based operating systems and the network as well, enabling customers to solve technical problems with a single phone call.

About Neoware

Neoware provides software, services, and solutions to enable Appliance Computing, an Internet-based computing architecture targeted at business customers that is designed to be simpler and easier than traditional PC-based computing. Neoware's software and management tools power and manage a new generation of smart computing appliances that utilize the benefits of open, industry-standard technologies to create new alternatives to personal computers used in business and a wide variety of proprietary business devices. Neoware's products are designed to run local applications for specific vertical markets, plus allow access across a network to multi-user Windows servers, Linux servers, mainframes, minicomputers and the Internet. Computing appliances that run and are managed by Neoware's software offer the cost benefits of industry-standard hardware and software, easier installation, and have lower up-front and administrative costs than proprietary or PC-based alternatives. More information about Neoware can be found on the Web at www.neoware.com or via email at info@neoware.com. Neoware is based in King of Prussia, PA.

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the cost benefits and other advantages of the Company's products and Neoware's belief that it is well positioned to continue delivering such benefits to customers as the thin client market grows. These forward-looking statements involve risks and uncertainties. Factors that could cause actual results to differ materially from those predicted in any such forward-looking statements include Neoware's timely development and delivery and customers' acceptance of Neoware's appliance computing products, pricing pressures, rapid technological changes in the industry, growth of the appliance computing market, increased competition, Neoware's ability to attract and retain qualified personnel, adverse changes in general economic conditions, risks associated with foreign operations in the U.S. and internationally and political and economic uncertainties associated with current world events. These and other risks are detailed from time to time in Neoware's periodic reports filed with the Securities and Exchange Commission, including, but not limited to, its report on Form 10-K for its fiscal year ended June 30, 2001.

Neoware is a registered trademark of Neoware Systems, Inc. All other names, products, and services are trademarks or registered trademarks of their respective holders.



            

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