HDS Network Systems, Inc. (Nasdaq: HDSX), announced today the NC industry's first support for smart card, scanner and CDROM capabilities. The new features let users of HDS's innovative @workStation NC take advantage of the security of smart cards, scan documents into Windows applications, and use Windows CDROMs from the @workStation NC.

Support for these new peripherals is provided in conjunction with Insignia Solutions' NTRIGUE multi-user Windows NT application server operating system, which HDS sells and supports. By providing support via NTRIGUE, HDS customers preserve all of the benefits of a "thin" client - easy administration, lower costs, simpler management - and still get all of the capabilities of a PC.

The new capabilities will allow customers to connect standard peripherals like scanners, CDROMs and smart card readers to the serial and parallel ports of the @workStation, and use them from within Windows applications.

"HDS is committed to providing our customers with all of the functionality of a PC - but without the costly system administration that PCs require," said Michael Kantrowitz, HDS executive vice president. "By providing the NC market's first support for CDROMs, scanners and smart card readers, we're once again leading the Network Computer industry with capabilities that make the @workStation NC the only real alternative to a PC, with the added benefits of a Java Virtual Machine, the Navigator browser, email and 32 terminal emulators for legacy systems. And by adding these features in conjunction with NTRIGUE, our customers can centrally manage these capabilities instead of having to worry about administering each desktop machine individually."

Network World Magazine recently called the @workStation "the real threat to the PC" in a review of Network Computers from a variety of manufacturers. Network Computing Magazine awarded the @workStation the prestigious Editor's Choice in a recent review of Network Computers. Customers such as AARP Pharmacy Services and Burlington Coat Factory are deploying HDS @workStation NCs in volume. AARP has deployed more than 1000 @workStation Network Computers and the NTRIGUE operating system for a sophisticated customer management application.

About HDS @workStation

The HDS @workStation NC is designed for business environments as an easy-to-install and easy-to-administer alternative to the personal computer. According to the Gartner Group, a Network Computer like the HDS @workStation can save up to 39 percent of the cost of ownership of a PC, or approximately $17,000 over five years. Using these numbers, a company with 1,000 desktops can save $17 million by deploying NCs instead of PCs.

HDS has been first-to-market with virtually every new technology in the NC industry because of the standards-based, open design of the HDS netOS operating system. In addition to being first to add support for scanners, CDROMs and smart cards, HDS was first to add Java, the Netscape Navigator and Spyglass Web browsers, email, videoconferencing, the ICA protocol, a full suite of terminal emulators, the Windows CIFS (Common Internet File System) protocol, and NC management via CA Unicenter TNG. Many of these capabilities were added to the HDS @workStation in a matter of weeks, while competitors have yet to offer them. HDS considers the ability to quickly add capabilities to its products to be a major competitive advantage in the fast-moving Internet market, and plans to use this advantage to continue to maintain its lead in the NC market.

HDS netOS, the operating system in the HDS @workStation NC, is offered under license to OEMs for quick and easy deployment of application-specific NCs for a variety of markets.

About HDS

HDS Network Systems (NASDAQ: HDSX), of King of Prussia, Pa., is a leading international supplier of Network Computers and related software, which are cost-effective solutions for the integration and delivery of information and applications to the desktop. The company's netOS operating system is based on an open architecture, incorporating industry standards to enable seamless access to multiple forms of information, including text, graphics, audio, and video, on any type of network. (Telephone: 610-277-8300; fax: 610-275-5739; Email: info@hds.com.)

HDS Network Systems is a sponsor of NC News.