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<TYPE>EX-99.1
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<FILENAME>v015071_ex99-1.txt
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                                                                    Exhibit 99.1

FOR IMMEDIATE RELEASE

CONTACT:

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

          DATA SYSTEMS & SOFTWARE INC. ANNOUNCES AGREEMENT IN PRINCIPLE
                      FOR THE SALE OF ITS DSIT SUBSIDIARY

MAHWAH, N.J., March 28, 2005 /PRNewswire-FirstCall/ Data Systems & Software Inc.
(OTC:  DSSI)  today  announced  that it and the other  shareholders  of its dsIT
Technologies,  Ltd. subsidiary,  have entered into an agreement in principle for
the sale of all the outstanding shares of dsIT to Matrix IT Ltd. Under the terms
of the agreement in principle, the total consideration to be paid for the shares
would be  approximately  $9 million,  to be paid in cash and in Matrix  ordinary
shares. A portion of the  consideration is subject to adjustment based on dsIT's
performance  against  certain  operating goals to be set forth in the definitive
agreement.  The  agreement in  principle  includes a "no-shop"  agreement  for a
period of 45 days to allow Matrix to perform its due-diligence investigation.

The Company is the holder of 68% of the outstanding dsIT shares.

Matrix is listed on the Tel Aviv Stock Exchange (TASE:  MTRX) and is part of the
Formula Group.

The closing of the  transaction  is subject to (i)  satisfactory  completion  by
Matrix  of its  due  diligence  investigation  of  dsIT,  (ii)  negotiation  and
execution of a definitive agreement, (iii) the receipt of all required corporate
and other approvals required by applicable law.

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.  Through its Comverge Inc. affiliate, the Company provides
energy intelligence solutions to utilities.

For more information, contact:

George Morgenstern, CEO, (201) 529-2026, george@dssiinc.com.

<PAGE>

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.  The  consummation  of  the  transaction
described in this release is subject to (i) satisfactory completion by Matrix of
its due diligence  investigation  of dsIT,  (ii)  negotiation and execution of a
definitive agreement, and (iii) the receipt of all necessary corporate and other
approvals.  The actual  consideration  to be paid by Matrix for the dsIT shares,
and the amount that the Company may receive in connection with the  transaction,
is subject to adjustment as described in the release. There is no assurance that
the transaction  will be consummated on the terms described in the release or at
all. 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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