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Survey shows demand for mainframe integration expertise will increase as companies deal with complexity – highlights core competency of NEON Systems

Windsor, UK June 22 2005 - NEON® Systems, Inc. (NASDAQ: NEON), The Mainframe Integration Experts, today announced findings from strategic research, undertaken by independent market research company, Market Clarity. NEON commissioned a series of comprehensive one-on-one interviews with 21 large companies to better understand the current state of play relating to mainframe projects inside UK PLCs. The research found that the mainframe platform is still at the heart of many of the world’s largest organisations and is recognised as a huge asset. For most of the organisations surveyed, the existing structure of IT operations and development is often still conceived of in isolation and managed in silos.

Business-Critical Applications Driving Mainframe Demand
The research showed that 81 percent of companies surveyed said they are dealing with current IT priorities that will increase the demand for mainframe integration. In fact many of the business-critical applications listed by respondents demand real-time data access and were core to the business (e.g. policies, APR, availability, billing claims, customer information, dispatch, enquiries, financial data, loans, reservations and web applications). The research showed that 75 percent of the respondents said they are currently utilising real-time information feeds from their mainframes and 25 percent said all their applications require real-time data.


Mainframe Integration’s Complexity Requires Expertise
Additional findings from the recent research study indicated that:
4 50 percent of IT projects involving the mainframe hit an integration problem.
4 43 percent of respondents claimed to set up new applications requiring mainframe access ‘very frequently’ (monthly or daily) or ‘quite frequently’ (2-6 times a year). When this happened, most reported they did not seek expert advice, even though they understood the complexity of the problem and the potential costs to the business.
4 75 percent of respondents said their organisation’s mainframe access and connections are ‘very’ or ‘quite’ complex. Of the few who did turn to external help for support, the tendency was to default to IBM and reported they did not seek an independent view from a mainframe integration expert.

Stephen Martin, managing director, Market Clarity comments: “The research highlighted that those using mainframes are big companies with unique IT set-ups. Because of that they genuinely believe that it is not possible to predict problems and that you just have to allow for them and build in contingency. They do not really accept it is possible to have standardised solutions. I think in all cases, companies hope that the problem won’t happen to them, and this is somewhat surprising when the money involved is so big and the projects are so huge.”

Standardised Approach to Mainframe Integration Desirable But Not Currently Implemented
Most of the organisations surveyed admitted that their mainframe integration decision-making was reactive and/or tactical, despite recognising the importance of investing in integration methodologies that leverage mainframe processing power. More than 71 percent said a standard approach to mainframe integration was ‘very important’ or important, while approximately 43 percent indicated they deal with mainframe integration only on a project-by-project basis.

In addition, of the companies surveyed, 52 percent claimed to have a ‘standard policy’ approach to mainframe integration where integration decisions are usually based on the organisation’s existing technology infrastructure, contrasted by the fact that only 19 percent of companies indicated a formal strategy and set standards were used to determine the method of mainframe integration.

Andy Gutteridge, VP International Operations, NEON Systems (UK) Ltd comments: “This research underpins the conversations that we have with so many of our customers who on a daily basis are trying to better understand how they can release the value that exists within their legacy systems in a way that causes least pain or disruption to the business. We believe that Shadow, coupled with NEON’s proven mainframe integration expertise, solves this critical business concern.”

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About Shadow RTE

NEON's Shadow RTE technology provides a robust technical architecture to support the broad range of customer requirements for mainframe integration. Shadow RTE is the foundation upon which customers can integrate mission critical mainframe resources into a Real-time Enterprise. A single unified platform, Shadow RTE enables real-time mainframe integration with industry standard application development platforms - .NET and/or J2EE -in support of Web services for Service-Oriented Architectures (SOA), real-time events for Event-Driven Architectures (EDA), SQL for direct data access and transactional (XA) support, and Presentation integration for Web-enablement of legacy screen-based applications and data. Shadow RTE provides the auditing, tracing and logging layer required to meet new compliance reporting. With Shadow RTE, customers have a mainframe integration infrastructure that at its lower levels is designed and proven to be secure, scalable, high performance, reliable and manageable.

About NEON Systems

NEON Systems, Inc. (NASDAQ: NEON) – The Mainframe Integration Experts - is a leading provider of enterprise-class mainframe integration solutions, delivering the only unified mainframe integration platform to support the entire range of requirements for Service-Oriented Architectures (SOA) and Event-Driven Architectures (EDA) – key requirements to underpin the Real-time Enterprise. NEON's Shadow technology is designed to reduce the complexity of mainframe integration allowing large organizations with significant commitment to mainframe systems to streamline incumbent technologies and lower total cost of ownership. NEON's Shadow z/Services and Shadow z/Events offerings attack the emerging mainframe Web services and real-time mainframe event-driven markets and are unique in their depth and breadth of support for the requirements of such markets. With extensive mainframe integration expertise, NEON is uniquely qualified to solve the complexities of supporting new business initiatives that must integrate with critical mainframe systems. For more information on the Powering the Real-time Enterprise, see our website at http://www.neonsys.com

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