IDC Report Identifies Neoware as Fastest-Growing Player in Thin Client Computing; A 157% Increase in Unit Shipments Moves Neoware Ahead of Hewlett-Packard

Business Wire, March 17, 2003

Business Editors/High-Tech Writers

KING OF PRUSSIA, Pa.--(BUSINESS WIRE)--March 17, 2003

A new report from IDC has found that Neoware Systems, Inc. (Nasdaq:NWRE) is the fastest growing player in thin client computing. According to the report, Neoware, the leading supplier of award-winning software, services and solutions for the Appliance Computing market, increased unit shipments 157% over the past year, dramatically outpacing competitors and the industry as a whole, which increased a healthy 18.5%. Neoware's performance increased the company's market share from 6.8% to 14.7%, moving Neoware into the number two position in both the US and Europe, ahead of Hewlett-Packard (NYSE:HPQ).

Neoware's closest competitor grew at a slower rate than the market itself, increasing unit shipments just 17.3%, according to the report. As a point of comparison, PC shipments grew only 1.4 % in 2002, according to IDC research.

According to Neoware chairman and chief executive officer Michael Kantrowitz, "We believe the pace at which Neoware is gaining market share demonstrates the power of our software-focused business model which allows customers to preserve capital investment and lower the ongoing cost of ownership. Enabling enterprises to upgrade software independent of hardware is gaining currency among CIOs and IT managers around the world."

Kantrowitz added that a software-driven approach to the thin client market fulfills the original promise of the technology when it was first developed in the mid-1990s. "The original architects of thin clients believed that centralized management of desktops would ultimately increase efficiency and drive down costs. The growing adoption rate of thin client technology indicates their vision will ultimately be realized."

About Neoware

Neoware provides software, services, and solutions to enable Appliance Computing, a proven 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, maintenance, and administrative costs than proprietary or PC-based alternatives.

More information about Neoware can be found on the Web at http://www.neoware.com or via email at invest@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: our position as the fastest growing player in the thin client computing market; our position as the leading supplier of software, products, services and solutions for the Appliance Computing market; the benefits of our software-focused business model allowing customers to preserve capital investment and lower ongoing costs of ownership; and the growing adoption rate of thin client technology. 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 statement include our ability to continue to lower our costs, our timely development and customers' acceptance of our Appliance Computing products, pricing pressures, rapid technological changes in the industry, growth of the Appliance Computing market, increased competition, our ability to attract and retain qualified personnel, our ability to identify and successfully consummate future acquisitions, adverse changes in customer order patterns, adverse changes in general economic conditions in the U.S. and internationally, risks associated with foreign operations 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, 2002 and Form 10-Q for the quarter ended December 31, 2002.

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