BluePhoenix Announces New Redevelopment Solution for Converting COBOL Applications to Java, C# at Gartner Application Development Summit

BluePhoenixT Redevelopment SOA-Enable Legacy Applications

September 18, 2006

MILAN, Italy & HERZLIA, Israel —August 14, 2006 — BluePhoenix Solutions (NASDAQ: BPHX - News), CARY, N.C. & HERZLIA, Israel, September 18, 2006 – BluePhoenix Solutions (NASDAQ: BPHX), the leader in Enterprise IT Modernization, today announced the release of BluePhoenix™ Redevelopment, a unique solution—incorporating a toolset, methodology and services—that enables organizations to rapidly and easily redevelop large-scale legacy COBOL applications to   state-of-the-art environments such as Java/J2EE, C#, and Service-Oriented Architecture (SOA). By doing so, these organizations can upgrade their legacy technologies, while reducing maintenance and IT costs.

This solution is being showcased at the Gartner Application Development Summit being held September 25–27 in Phoenix, Arizona. Live demonstrations of the Redevelopment toolset will be shown at the BluePhoenix booth (Booth #1) during the exhibit hours.

BluePhoenix™ Redevelopment is the latest addition to the company’s comprehensive portfolio of high-efficiency platform, database, and application migration; data migration; and remediation solutions.

According to Gartner, "Legacy applications may be replaced with new, packaged applications or rewritten in a custom fashion in more modern architectures. Rather than wholesale replacement, reuse of legacy application logic and data via Service-Oriented Architecture (SOA) approaches is an increasingly popular approach." (Leveraging Legacy Data Assets via Service-Oriented Techniques, Dale Vecchio, Ted Friedman, 20 Dec. 2005).

TEMENOS, a Geneva, Switzerland-based provider of integrated core banking systems to over 500 financial institutions worldwide has used the Redevelopment solution to convert and enhance some of its COBOL banking applications to Java in order to meet a growing demand for a Java-based solution of their application. According to Andreas Andreades, CEO of TEMENOS, “By redeveloping these applications, our customers will have the ability to operate on less costly hardware and software environments, while maintaining platform and vendor independence.”

IT Redevelopment is a key component in the overall BluePhoenix Enterprise IT Modernization strategy, which also includes Understanding, Migration and Remediation. Now—in addition to analyzing their environment, migrating applications to new environments, and modifying data fields—customers can also enhance the applications without having to re-write them.

“IT Redevelopment mitigates the cost and risk of large modernization projects by allowing companies to bring their development into a high-level, rules-based environment,” said Tom O’Connell, director of R&D at BluePhoenix Solutions. “By incorporating our Redevelopment technology into their development environments, customers can insulate newly enhanced and modernized applications from the technological changes that will undoubtedly follow. Once the application is in the rules-based repository, changes can be made using fewer resources than any native toolset and delivered rapidly in a controlled manner; moreover, the application can be easily deployed on any supported technology target.”

“We expect our new solution to offer major benefits to customers,” said Arik Kilman, CEO of BluePhoenix Solutions. “Using the BluePhoenix Redevelopment toolset will enable our customers to shorten time to market of new offerings and save millions of dollars by reducing their development cycle.”

“Interested parties attending the Gartner Application Development Summit may meet onsite with some leading customers to learn how they have benefited from BluePhoenix proven modernization tools and methodology,” added Kilman.

The BluePhoenix Redevelopment solution enables customers with legacy COBOL applications to move to Java/J2EE, C#, Service-Oriented Architecture (SOA), and Business Process Management (BPM). The solution is available immediately and information on the various features and benefits, along with case studies and the Redevelopment white paper can be found on the BluePhoenix Web site: www.bphx.com/redev.

About the Gartner Application Development Summit
Gartner Application Development Summit 2006 is the most focused event of its kind designed to help enterprises prepare for the challenges and optimize the opportunities as they build an agile, yet more robust and secure application infrastructure. Gartner Application Development Summit hits the critical spot between strategic planning and tactical advice for IT organizations as collaboration, accountability, compliance, and portfolio and resources management become key capabilities of the new Application Development team. Additional information is available at
www.gartner.com/us/adsummit.

About BluePhoenix Solutions
BluePhoenix (NASDAQ: BPHX) is a leading global provider of modernization solutions for legacy information systems. Its unique suite of automated tools and services helps customers grow revenue, reduce costs, shorten time to market, and extend the ROI of their existing legacy systems. BluePhoenix is unique in addressing the full range of IT modernization through automated migration solutions that mitigate risk, minimize IT downtime, and preserve application business logic. BluePhoenix offerings help firms effectively plan and carry out strategic projects such as database, application, and platform migrations; SOA enablement; field transformations; system standardizations; application development and redevelopment; and application outsourcing.

Its solutions serve companies from numerous, diverse industries, such as automotive, banking and financial services, insurance, manufacturing, and retail. Among its prestigious customers are: Aflac, DaimlerChrysler, Lawson Products, Los Angeles County Employees Retirement Association, Merrill Lynch, RSI, SDC Udvikling, and TEMENOS. BluePhoenix has 12 offices in the USA, UK, Denmark, Germany, Italy, the Netherlands, Australia, and Israel.

For more information, please visit our Web site at www.bphx.com

SAFE HARBOR: Certain statements contained in this release may be deemed forward-looking statements, with respect to plans, projections, or future performance of the Company, the occurrence of which involves certain risks and uncertainties that could cause actual plans to differ materially from these statements. These risks and uncertainties include but are not limited to: market demand for the Company's tools, successful implementation of the Company's tools, competitive factors, the ability to manage the Company's growth, the ability to recruit and retrain additional software personnel, and the ability to develop new business lines.

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

Company Contact:
Tsipora Cohen
VP, Worldwide Marketing
BluePhoenix Solutions
+1 781-652-8945
tcohen@bphx.com