Contact:

                                 Aruna Lalwaney
                                  800/578-3268
                             aruna.lalwaney@daou.com
                                  www.daou.com

DAOU SYSTEMS, INC. ANNOUNCES $100 MILLION, FIVE-YEAR INFORMATION TECHNOLOGY
CONTRACT WITH SAINT MARY'S HEALTH NETWORK, RENO, NEVADA

SAN DIEGO--(BW HealthWire)--Jan. 11, 1999--DAOU Systems, Inc. (Nasdaq:DAOU
-news) announced today an approximately $100 million Information Systems
Outsourcing contract with Saint Mary's Health Network, Reno, Nevada.

The contract, which spans over five years, encompasses DAOU Systems, Inc.
providing a complete range of Information Technology (IT) outsourcing solutions
to Saint Mary's Health Network.

Georges Daou, chief executive officer of DAOU Systems, Inc., stated, "We have
successfully completed a comprehensive acquisition strategy, and now provide a
full complement of IT outsourcing services including, Application
Implementation, Communications Infrastructure, including voice, video, the
network and the desktop, Consulting and Data Integration.

"DAOU will leverage its relationships with the leading Healthcare Information
Services (HIS) vendors, hardware vendors and apply our expertise to improve the
effectiveness of Saint Mary's IT operations. Our partnering with Saint Mary's
represents the first major fulfillment of our ability to provide a full range
of, single source, value-added solutions."

Jeff Bills, president and CEO of Saint Mary's Health Network, stated, "We are
very pleased to have DAOU handle all of our Information Technology needs. They
have demonstrated to us over the years that they can enhance our productivity
and efficiency, and ultimately help us deliver better healthcare. That is why we
have entered into this strategic partnership."

Saint Mary's has allocated the approximately $100 million agreement across
professional services, vendor support contracts and capital expenditures to
execute their IT strategy under DAOU management. DAOU management will be
responsible for the entire IT budget and currently plans to have about 60
employees on site and leverage its industry relationships to enhance support
contracts where possible.

DAOU also plans to utilize its own nearly 800 person workforce to deliver on
portions of the operating budget that DAOU services can handle productively and
economically for Saint Mary's. The contract, which spans five years, has a
renewal option for a sixth year.

DAOU Systems, Inc. is a provider of integrated Information Technology (IT)
solutions and services to the U.S. healthcare industry. DAOU's capabilities
range from up-front strategic consulting to IT system design, implementation and
long-term tactical support. DAOU's IT offerings include data,



voice and video networking, applications consulting and implementation, as well
as operational and Internet solutions.

DAOU has nearly 800 employees, and has provided services to more than 1,300
healthcare organizations, including many of the nation's top 100 integrated
delivery systems. DAOU's clients include organizations such as Catholic Health
Care West, The Cleveland Clinic, Mercy Health Services, Saint Barnabas Health
Care, and Humana Healthcare. More information about DAOU Systems can be found at
www.daou.com on the World Wide Web.

Except for the historical information contained herein, the matters discussed in
this press release are forward-looking statements that involve numerous risks
and uncertainties. The company's actual results could differ materially from
those projected in such forward-looking statements and will depend upon a number
of factors, including those discussed in the company's filings with the
Securities Exchange Commission and other press releases of the company.