Exhibit 99.2

FOR: NEOWARE SYSTEMS, INC.
CONTACT: Vincent T. Dolan, CFO
610-277-8300
Vince.dolan@neoware.com



KCSA Joseph A. Mansi/Todd Fromer
CONTACTS: (212) 896-1205/(212) 896-1215
jmansi@kcsa.com/tfromer@kcsa.com


NEOWARE SYSTEMS, INC. (NASDAQ: NWRE)
LOWERS WARRANT STRIKE PRICE TO GENERATE FUNDS FOR GROWTH
- - - - - -
Move To Fund Company's Entry Into Linux-Based Information Appliances

KING OF PRUSSIA, Penn., February 14, 2000 -- Neoware Systems, Inc. (NASDAQ:
NWRE) today announced that it has lowered the exercise price for its outstanding
publicly traded warrants to $3.75 per share, effective immediately. If all of
Neoware's outstanding warrants were exercised, the Company would generate close
to$20 million to fund its new strategy to create a market leader in the emerging
market for Linux-based information appliances.

"We believe that we can position Neoware as the leading company in the emerging
market for information appliances," stated Michael Kantrowitz, Neoware's newly
appointed President and CEO. "Our vision is to connect people with computing
power through a new class of information appliances that are simple to install,
and simple to use. The first of our new products will be shown this week at
Windows 2000 Expo, and delivered later this month. Follow-on products, which
include our new embedded Linux operating system, are currently in beta test at a
number of customer sites, and will be delivered later this quarter." "We plan to
utilize the cash generated from the exercise of warrants to fund our new
information appliance initiatives," Mr. Kantrowitz continued.

In addition to lowering the exercise price for its warrants, Neoware has
extended the expiration date of the warrants to April 14, 2000. Neoware intends
to use funds raised from the warrant exercise and from other sources to pursue
its strategy of developing the Company as a leader in the market for information
appliances. Neoware intends to expand its engineering, marketing, sales and
business development activities and to seek strategic partnerships to capitalize
on its technology to create a leadership position in this emerging market.

Neoware recently announced that it is pursuing a new product and market strategy
capitalizing on its strength in embedded operating systems, and demonstrated new
Linux-based software products recently at Linux World Expo in New York. Neoware
has more than ten years of experience developing embedded UNIX-based operating
systems, and has utilized this expertise to create an embedded version of the
industry-standard Linux operating system which is designed to operate in small
"appliance" devices with limited memory and no hard drive. Combined with
software from other companies, Neoware's new appliance products could be used as
thin clients, web kiosks for electronic commerce, email stations, point of sale
devices, firewalls, routers, security devices for virtual private networks, and
for various other uses.






In 1999 nearly twice as many copies of the Linux operating system shipped as
compared to 1998, and sales of the Linux operating system grew at roughly four
times the rate of the server operating system market as a whole, according to
market research firm IDC. More than 29 percent of all public Web servers run on
Linux, according to the research firm Netcraft, making Linux the most popular
operating system for public Web sites. IDC predicts that shipment of handheld
and notebook-style information appliance devices will exceed 55 million units in
2002, and that by 2005, shipments of these appliances will exceed shipments of
PCs.

About Neoware
Neoware designs, develops and markets information appliances based upon embedded
versions of the Linux and Windows operating systems. Neoware's products are
designed to run limited local applications for specific vertical markets, plus
allow access to Linux servers, the Internet and Windows-based applications
running on multi-user Windows NT servers. Neoware's information appliances are
designed as an alternative to general-purpose personal computers, offering
easier installation, as well as lower up-front and administrative costs. More
information about Neoware can be found on the Web at http://www.neoware.com or
via email at info@neoware.com. Neoware is based in King of Prussia, PA.

# # #

This release contains forward-looking statements that are within the meaning of
the Private Securities Litigation Reform Act of 1995, and relate to, the
development of the Company's products and future operating results that are
subject to certain risks and uncertainties that could cause actual results to
differ materially from those in such forward looking statements. Forward looking
statements include those concerning the potential warrant exercise, the
development and marketing of the Company's new Linux-based products, additional
financing and strategic partnerships, anticipated purchases by customers, future
continuation of certain new and existing account trends, the growth of future
revenues and the Linux-based appliance market, the effect of actions taken by
other parties and the Company's competitive position. The words "believe",
"expect", "intend", "anticipate", variations of such words, and similar
expressions identify forward-looking statements, but their absence does not mean
that the statement is not forward-looking. These statements are not guarantees
of future performance and are subject to certain risks, uncertainties and
assumptions that are difficult to predict. Factors that could affect the
Company's actual results include risks associated with the Neoware's new
strategy focusing on information appliances, including the new Linux-based
products, the Company's ability to obtain additional financing and strategic
partnerships, customers' acceptance of Neoware's products, pricing pressures,
the Company's ability to lower its costs, rapid technological changes in the
industry, growth of the information appliance market and increased competition.
Reference is made to the Company's Annual Report on Form 10-K for the year ended
June 30, 1999 filed with the SEC for a more detailed description of such
factors. Readers are cautioned not to place undue reliance on these
forward-looking statements that speak only as of the date of this release. The
Company undertakes no obligation to update publicly any forward- looking
statements to reflect new information, events or circumstances after the date of
this release or to reflect the occurrence of unanticipated events.