BluePhoenix Wins $500,000 Natural/ADABAS Modernization Contract From A Leading US Federal Sector IT Service Provider

BluePhoenix Solutions (NASDAQ: BPHX), the leader in value-driven IT modernization, today announced that it was awarded a $500,000 contract from a leading US federal sector IT service provider.

The customer selected BluePhoenix to modernize the Natural/ADABAS environment in order to reduce its cost structure, improve flexibility and have a solid platform for future growth. In choosing BluePhoenix to provide this solution, the customer will preserve a fully functional equivalent of the applications in the new Windows, Microsoft SQL, .Net environment. The new solution is reliable, flexible and cost effective and enables the customer to develop its business without the constraints imposed by legacy technology. The customer intends to leverage this migration to expand its services across the US government segment.

“We are very pleased to be awarded this contract. It is a great example of the growing trend of enterprises realizing significant cost savings and efficiency gains from IT modernization,” said Greg Schottland, General Manager, Legacy Modernization Division of BluePhoenix Solutions. “This contract continues to demonstrate the strong market interest in our automated ADABAS automation solution and our strong growth in the government and worldwide modernization markets.”

About BluePhoenix Solutions

BluePhoenix Solutions (NASDAQ: BPHX) is the leading provider of value-driven legacy IT modernization solutions. The BluePhoenix portfolio includes a comprehensive suite of tools and services from global IT asset assessment and impact analysis to automated database and application migration, rehosting, and renewal. Leveraging over 20 years of best-practice domain expertise, BluePhoenix works closely with its customers to ascertain which assets should be migrated, redeveloped, or wrapped for reuse as services or business processes, to protect and increase the value of their business applications and legacy systems with minimized risk and downtime.

BluePhoenix provides modernization solutions to companies from diverse industries and vertical markets such as automotive, banking and financial services, insurance, manufacturing, and retail. Among its prestigious customers are: Aflac, Capita Group, CareFirst, Citigroup, Danish Commerce and Companies Agency, Desjardins, Los Angeles County Employees Retirement Association, Rabobank, Rural Servicios Informaticos, SDC Udvikling, TEMENOS, Toyota, and Volvofinans. BluePhoenix has 13 offices in the USA, UK, Denmark, Germany, Italy, The Netherlands, Romania, Russia, Cyprus, Australia, and Israel. For more information, visit www.bphx.com.

Cautionary Statement Regarding Forward-Looking Statements

Certain statements contained in this release may be deemed forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 and other Federal Securities laws. You can identify these and other forward-looking statements by the use of words such as “may,” “will,” “plans,” “believes,” “estimates,” “intends,” the negative of such terms, or other comparable terminology. Because such statements deal with future events, plans, projections, or future performance of the Company, they are subject to various risks and uncertainties that could cause actual results to differ materially from the Company’s current expectations. These risks and uncertainties include but are not limited to: the ability to successfully defend claims brought against the Company; the effects of the global economic and financial crisis; market demand for the Company’s products; successful implementation of the Company’s products; changes in the competitive landscape, including new competitors or the impact of competitive pricing and products; the ability to manage the Company’s growth; the ability to recruit and retain additional software personnel; the ability to develop new business lines; and such other risks and uncertainties as identified in BluePhoenix’s most recent Annual Report on Form 20-F and other reports filed by it with the SEC. Except as otherwise required by law, BluePhoenix undertakes no obligation to publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

This press release is also available at www.bphx.com. All names and trademarks are their owners’ property.

Copyright Business Wire 2010

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