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                                                                    EXHIBIT 99.1
For Immediate Release

Contact:
Brad Poynter
NEON Systems, Inc.
281.491.4200
brad.poynter@neonsys.com

           NEON SYSTEMS ANNOUNCES OPTION TO ACQUIRE SCALABLE SOFTWARE
  Louis R. Woodhill and James R. Woodhill appointed to NEON Board of Directors

     SUGAR LAND, Texas -- December 21, 2001 -- NEON Systems, Inc. (Nasdaq:
NESY), a leading provider of data access, legacy renewal, and OS/390 utility
solutions, today announced that it had entered into a non-binding term sheet to
be granted a two-year option to acquire Scalable Software, Inc., a privately
held Houston-based provider of client effectiveness management tools for Windows
networks.  This term sheet reflects a revision by NEON Systems and Scalable
Software of NEON Systems' previously announced plan to acquire Scalable
Software.

     In addition, NEON Systems also announced that Louis R. Woodhill, its Chief
Executive Officer, and James R. Woodhill have been appointed to the Board of
Directors of NEON Systems.  Prior to starting Scalable Software in 1999, Louis
Woodhill was a co-founder of Mission Critical Software, Inc., a leading provider
of e-business infrastructure management software that went public in August 1999
and merged with NetIQ Corporation in May 2000.  Louis Woodhill is also a founder
and chairman of the board of Configuresoft, Inc., a Colorado-based software
company that provides configuration management solutions for Windows NT networks
and he currently continues to serve as the Chief Executive Officer of Scalable
Software. Louis Woodhill received a BS degree in Mechanical Engineering in 1970.
Jim Woodhill was a co-founder of MVS Software, Inc., a successful mainframe
software company that ultimately became part of Computer Associates.

     In connection with the Option to acquire Scalable Software, NEON Systems
has agreed to provide bridge financing of up to $5,500,000, in addition to the
$3,500,000 previously loaned to Scalable Software that is secured by personal
guarantees from John Moores, Louis R. Woodhill and James Woodhill. The aggregate
financing has a 36-month term and will not bear interest during the term of the
two-year option to acquire Scalable Software. After the expiration of the
option, the loan will bear interest at the prime rate plus two percentage
points. The aggregate loan amount will be secured by all of the intellectual
property rights of Scalable Software.

     The term sheet provides that NEON Systems may exercise the option to
acquire Scalable Software at any time during the two-year term, subject to
provisions that would require NEON Systems to exercise its option within a 30-
day window under certain circumstances or forfeit the option.  If NEON Systems
exercises the option and acquires Scalable Software, each of the approximately
19,400,000 outstanding shares of common stock of Scalable Software would be
converted into approximately 0.135 of a share of NEON Systems common stock and
outstanding options and warrants to purchase approximately 3,000,000 shares of
common stock of Scalable Software would become options and warrants to purchase
common stock of NEON Systems on the same conversion basis.

     The transaction is subject to the negotiation and execution of definitive
documentation. As previously disclosed, several members of NEON's board of
directors have a financial interest in Scalable Software.   Prior to NEON
Systems exercising the option to acquire Scalable Software, the negotiated terms
of the proposed acquisition would be reviewed by a special committee of the
board of directors of NEON Systems, composed solely of directors who have no
interest in Scalable Software, and NEON would seek to obtain a fairness opinion
regarding the transaction from a financial advisory firm.  The acquisition of
Scalable Software will require approval of the stockholders of NEON Systems and
the NEON Systems board of directors.

                               ABOUT NEON SYSTEMS

NEON Systems, Inc. (Nasdaq: NESY) is a leading provider of data access and
legacy renewal solutions, providing direct, transparent access to mainframe
data, transactions, and applications; and OS/390 subsystem management solutions.
Today, more than 40% of the Fortune 100 are using NEON Systems solutions. The
NEON Systems Shadow(R) Solution provides open access and integration of mission-
critical data and transactions residing in OS/390 environments. NEON's OS/390
subsystem management and utilities products economically enhance and maintain
the high availability, integrity, and performance of key CICS and IMS OS/390
environments in support for increasing application demands. NEON's tools
consistently outperform those from the competition through rapid installation,
high performance, and reduced CPU cycles. For more information about NEON
Systems and its solutions, visit www.neonsys.com or call 800-505-NEON.

This press release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended (the "Act") and Section
21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
which are intended to be covered by the safe harbors created thereby and the
Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995.
Such statements include, among other things, NEON Systems' exercise of the
option to acquire Scalable Software and the consummation of any acquisition of
Scalable Software and are subject to a number of factors and uncertainties that
could cause actual results to differ materially from those described in the
forward-looking statements.  The following factors, among others, could cause
actual results to differ materially from those described in the forward-looking
statements:  the negotiation of the terms of a definitive option agreement, the
completion of due diligence regarding Scalable Software, and the failure by NEON
Systems or Scalable Software to complete any condition to the closing of any
acquisition.  Please refer to the risk factors described in NEON Systems'
filings with the Securities and Exchange Commission, including its Annual Report
on Form 10-K filed on June 29, 2001, for a detailed description of these risks
and others that could cause actual results to differ materially from the
forward-looking statements.

     NEON is a registered trademark of NEON Systems, Inc. in the USA and in
other select countries.  All other trademarks are the property of their
respective owners.

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