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                                                                    Exhibit 99.1
FOR IMMEDIATE RELEASE

CONTACT:

George Morgenstern, CEO
DATA SYSTEMS & SOFTWARE INC.
(201) 529-2026 E-mail: ir@dssiinc.com


           DATA SYSTEMS & SOFTWARE INC. ANNOUNCES NASDAQ NOTIFICATION
                       --DSSI to Be Delisted From Nasdaq--

MAHWAH, NJ, January 26, 2005 /PRNewswire-FirstCall/ -- Data Systems & Software
Inc. (Nasdaq: DSSI) today announced that it has been informed by Nasdaq that the
Nasdaq Listing Panel has determined to delist the Company's securities from The
Nasdaq Stock Market, effective with the open of business on Thursday, January
27, 2005. The Panel's decision was based on the Company's failure to comply with
the $2.5 million minimum shareholders' equity requirement for continued listing
on the Nasdaq SmallCap Market.

The Company intends to request a review of the Listing Panel's decision by the
Nasdaq Listing and Hearing Review Council. The institution of a review will not
effect a stay of the Panel's delisting decision.

The Company's securities will be eligible for trading on the Over-the-Counter
Bulletin Board ("OTCBB") in accordance with SEC Rule 15c2-11. The Company is
taking steps to ensure that its shares will commence trading on the OTCBB as
soon as possible.

George Morgenstern, the Company's Chairman, President and CEO stated, "While we
are deeply disappointed by the decision of the Nasdaq Listing Panel, we are
working to facilitate the prompt commencement of trading of our shares on the
OTCBB, which we hope will provide an adequate and efficient market for those
wishing to trade the Company's stock. DSSI remains subject to, and intends to
continue to fully comply on a timely basis with, all SEC requirements applicable
to public companies, including the filing of all periodic reports."

The OTCBB is a regulated quotation service that displays real-time quotes,
last-sale prices and volume information in over-the-counter securities. OTCBB
securities are traded by a community of market makers that enter quotes and
trade reports through a highly sophisticated, closed computer network, which is
accessed through Nasdaq Workstation IITM. Trading information and quotations for
securities quoted through the OTCBB are generally available on business news and
financial websites and through securities brokers. The OTCBB is a quotation
medium for subscribing members, not an issuer listing service, and should not be
confused with The Nasdaq Stock Market. Trading of the Company's securities on
the OTCBB will not commence until a market maker has filed a Form 211 and such
form has been cleared by the OTCBB pursuant to Rule 15c2-11. Further information
regarding the OTCBB can be found at www.otcbb.com.
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About Data Systems & Software Inc.

Data Systems & Software Inc. is a provider of software consulting and
development services and is an authorized direct seller and value-added reseller
of computer hardware. Its Comverge affiliate provides energy intelligence
solutions to utilities. For more information, contact: George Morgenstern, CEO,
(201) 529-2026; ir@dssiinc.com.

This press release includes forward-looking statements, which are subject to
risks and uncertainties. Actual results may vary from those projected or implied
by such forward-looking statements. There is no assurance that the Company's
shares will commence trading on the OTCBB, when such trading will commence or
that the market for the Company's shares on the OTCBB will provide an adequate
and efficient market for those wishing to trade the Company's shares. A
discussion of risks and uncertainties which may affect the Company's business
generally is included in "Business--Factors Which May Affect Future Results" in
the Company's most recent Annual Report on Form 10-K as filed by the Company
with the Securities and Exchange Commission.

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