DAOU Awarded $2.5 Million Contract to Implement and Manage Computer Network for Sherman Health Systems.

SAN DIEGO--(BW HealthWire)--Feb. 6, 1998--

Another VHA Member Signs with DAOU

DAOU Systems Inc. (Nasdaq:DAOU) has been awarded a $2.5 million contract to install an advanced computer network for Sherman Health Systems of Elgin, Ill.

The contract covers the implementation for an asynchronous transfer mode (ATM) network, as well as a three-year service agreement for network management and remote network monitoring. The project will provide Sherman Health Systems with a regionwide ATM backbone network that will enable the organization to transmit data, voice and video via computer.

With its new network, Sherman Health Systems will be able to boost productivity through enterprisewide networking, office automation and e-mail. The network will provide communication services for Sherman's planned electronic medical record. It will also link physicians to the health-care organization and deliver benefits to the area's medical and patient communities.

Sherman Health Systems is the second major health-care organization to take advantage of the recent DAOU/VHA marketing alliance. West Tennessee Healthcare, another VHA member, signed a $5.5 million network contract with DAOU earlier this week.

"We're pleased to be teaming with Sherman Health Systems on this project," said Georges Daou, chief executive officer of DAOU Systems.

"This network will certainly take the organization into the next century and will enable them to begin to take advantage of voice, video and data computing. We believe that the potential and benefits of such computing within health care are tremendous, and we see Sherman Health Systems as an example of how the market is beginning to adopt voice, video and data."

Sherman Health Systems is the largest network of medical facilities in the Fox River Valley, northwest of Chicago. The organization is anchored by Sherman Hospital and comprises several additional clinics, ambulatory centers and long-term care facilities.

DAOU Systems designs, implements and manages computer networks for the health-care industry. The company offers solutions for voice, video and data networking, combining its technological expertise with its knowledge of the health-care industry's specialized needs.

In addition, DAOU offers an array of operational and Internet solutions. DAOU's clients comprise more than half of the nation's top 50 integrated health-care delivery networks and include such organizations as Centura Health, North Shore Health System, Mercy Health Services, Harris Methodist Health System and Catholic Medical Center of Brooklyn and Queens.

DAOU operates five regional offices and five operations centers across the country. The firm employs a staff of more than 350 people and has provided services to more than 600 organizations throughout the United States.

CONTACT: DAOU Systems Inc., San Diego

Craig K. Collins, 619/646-2857

[e-mail] (e-mail)

www.daou.com