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Exhibit 99.1

                      NEON SYSTEMS ANNOUNCES REORGANIZATION

         SUGAR LAND, TX (March 7, 2003) - NEON(R) Systems, Inc. (Nasdaq: NEON),
a leader in enterprise-class mainframe adapters, today announced that it has
undergone a corporate and management reorganization. Louis R. Woodhill has
resigned from his positions as President and Chief Executive Officer and as a
director of NEON Systems to pursue his other commercial and entrepreneurial
interests. Over the past sixteen months Mr. Woodhill provided strategic
leadership while NEON evaluated and ultimately exited its under-performing
businesses and refocused its operations on its Shadow product line.

         Mark Cresswell, NEON's Senior Vice President and General Manager of
NEON's Shadow Division, has been promoted to the position of President and Chief
Operating Officer of NEON Systems. The Board of Directors of NEON will conduct
an executive search to identify a Chief Executive Officer.

         "It is a privilege and an honor to lead NEON in the next phase of its
evolution," said Mr. Cresswell. "I am excited by our prospects for the coming
year. The focus and cost-efficiencies that result from this reorganization will
better position us for profitability while maintaining our longer-term revenue
growth objectives. We will continue to strengthen our relationships with our
partners and customers and raise the bar even further on product functionality
and customer care. "

         In connection with the corporate reorganization, NEON undertook a
reduction in workforce of approximately 26% of its overall employee base. NEON
will record the related severance and other restructuring charges in the fiscal
quarter ending March 31, 2003.

         About NEON Systems

NEON Systems, Inc. (Nasdaq: NEON) is a leader in enterprise-class mainframe
adapters. NEON's Shadow technology a leading industry choice for integrating
application platform suites and IBM zSeries mainframes, delivering
high-performance, scalability and managed interconnectivity. Flexible industry
standard APIs and evolutionary Web Services enable Shadow adapters to unlock the
intrinsic value of mainframe business data and logic for a new age of
applications. For more information on the future of mainframe integration, see
our Website, at www.neonsys.com or call 800-505-NEON.

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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 regarding, among other things, the additional revenue
opportunities, profitability goals, cost efficiencies, and improvement of
overall productivity of operations resulting from the reorganization of NEON's
business, are based on the current expectations and beliefs of management, 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:
development by competitors of new or competitive products or services, the entry
into the market by new competitors, the ability to recruit and retain qualified
personnel, the ability to retain customers or attract customers from other
businesses, the uncertainties of whether new software products and product
strategies, will be successful, the sufficiency of NEON Systems' working capital
and market and general economic conditions. 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 28, 2002 and its
subsequent Form 10-Qs for a detailed description of these risks and others that
could cause actual results to differ materially from the forward-looking
statements

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NEON, Shadow and ShadowDirect are registered trademarks and ShadowConnect, iWave
Helpdesk Integrator, iWave, and the NEON logo are trademarks of NEON Systems,
Inc. in the USA and in other select countries. All other trademarks are the
property of their respective owners.