<PAGE>   1
===============================================================================


                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                ---------------

                                   FORM 10-Q

     [X] QUARTERLY  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGEACT OF 1934 FOR THE QUARTERLY  PERIOD ENDED JUNE 30, 1999

     [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF  1934  FOR THE  TRANSITION  PERIOD
         FROM __________ TO __________

                        COMMISSION FILE NUMBER 000-24677

                        BINDVIEW DEVELOPMENT CORPORATION
             (Exact name of registrant as specified in its charter)

                          TEXAS                            76-0306721
         (State or other jurisdiction of                (I.R.S. Employer
         incorporation or organization)                Identification No.)

     5151 SAN FELIPE, 22nd FLOOR, HOUSTON, TX                77056
      (Address of principal executive offices)            (Zip code)

                                 (713) 561-4000
              (Registrant's telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. Yes [ X ] No [ ]

The number of shares of the registrant's Common Stock, no par value,
outstanding as of June 30, 1999, was 23,040,051

===============================================================================



<PAGE>   2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS

                        BINDVIEW DEVELOPMENT CORPORATION
                      CONDENSED CONSOLIDATED BALANCE SHEET
                        (IN THOUSANDS, EXCEPT PAR VALUE)

<TABLE>
<CAPTION>
                                       ASSETS
                                                                  JUNE 30,        DECEMBER 31,
                                                              1999 (UNAUDITED)        1998
                                                              ----------------    -----------
<S>                                                           <C>                 <C>
Current assets:
      Cash and cash equivalents                                $  43,078           $   48,010
      Short-term investments                                      13,755               10,187
      Accounts receivable, net                                     7,594                5,711
      Deferred tax asset                                           5,513                3,245
      Other current assets                                           821                1,676
                                                               ---------           ----------
           Total current assets                                   70,761               68,829
      Property and equipment, net                                  8,434                5,342
      Purchased software and related assets, net                   1,275                1,374
      Long-term investments                                        4,818                   --
      Other assets                                                   450                  492
                                                               ---------           ----------
                  Total assets                                 $  85,738           $   76,037
                                                               =========           ==========

                      LIABILITIES AND STOCKHOLDERS' EQUITY

 Current liabilities:
      Accounts payable                                         $   2,782           $    1,954
      Accrued liabilities                                          2,302                1,903
      Accrued compensation                                           983                  984
      Deferred revenue                                             6,735                4,994
                                                               ---------           ----------
           Total current liabilities                              12,802                9,835
                                                               --------            ----------
 Long-term liabilities:
      Convertible debentures                                          --                7,572
      Other long-term liabilities                                     --                   94
                                                               ---------           ----------
           Total long-term liabilities                                --                7,666
                                                               ---------           ----------
 Shareholders' equity:
      Convertible preferred stock, $0.025 par
          value, 520 shares authorized, 0 and 7 shares
          issued and outstanding, respectively                        --                   --
      Common stock, no par value, 100,000 shares
          authorized, 23,040 and 21,103 shares issued
          and outstanding, respectively                                1                    1
      Additional paid-in capital                                  83,150               65,675
      Common stock to be issued, 175 shares                           --                3,352
      Accumulated deficit                                        (10,171)             (10,532)
      Cumulative other comprehensive income                          (44)                  40
                                                               ----------          ----------
            Total shareholders' equity                            72,936               58,536
                                                               ---------           ----------
                  Total liabilities and shareholders' equity   $  85,738           $   76,037
                                                               =========           ==========
</TABLE>

      See notes to unaudited condensed consolidated financial statements.


                                       2

<PAGE>   3


                        BINDVIEW DEVELOPMENT CORPORATION
                   CONDENSED CONSOLIDATED STATEMENT OF INCOME
                                  (UNAUDITED)
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
                                                            QUARTER                        SIX MONTHS
                                                         ENDED JUNE 30,                   ENDED JUNE 30,
                                                    -----------------------         ------------------------
                                                       1999          1998              1999           1998
                                                    ---------     ---------         ---------      ---------
<S>                                                 <C>           <C>               <C>            <C>
Revenues:
   Licenses                                         $  10,775     $   6,219         $  19,090      $  10,603
   Services                                             4,244         1,774             7,814          3,230
                                                    ---------     ---------         ---------      ---------
      Total revenues                                   15,019         7,993            26,904         13,833
                                                    ---------     ---------         ---------      ---------

Cost of revenues:
   Cost of licenses                                       337           254               588            462
   Cost of services                                       514           226               955            441
                                                    ---------     ---------         ---------      ---------
      Total cost of revenues                              851           480             1,543            903
                                                    ---------     ---------         ---------      ---------
Gross profit                                           14,168         7,513            25,361         12,930
                                                    ---------     ---------         ---------      ---------
Costs and expenses:
   Sales and Marketing                                  6,229         4,135            11,564          7,306
   Research and Development                             3,980         2,743             7,400          4,675
   General and Administrative                           1,487           926             2,763          1,835
   Transaction and Restructuring                          238            --             2,524             --
                                                    ---------     ---------         ---------      ---------
Operating income (loss)                                 2,234          (291)            1,110           (886)
Other income, net                                         728            81             1,345            128
                                                    ---------     ---------         ---------      ---------
Income (loss) before income tax provision               2,962          (210)            2,455           (758)
Provision for income tax                                1,037           332             2,094            454
                                                    ---------     ---------         ---------      ---------
Net income (loss)                                       1,925          (542)              361         (1,212)
Other comprehensive income, net of tax:
   Loss from foreign currency translation                  (8)           --               (84)            --
                                                    ----------    ---------         ----------     ---------
  Comprehensive income (loss)                       $   1,917     $    (542)        $     277      $  (1,212)
                                                    =========     ==========        =========      ==========
Earnings (loss) per common share:
   Basic                                            $    0.08     $   (0.06)        $    0.02      $   (0.14)
   Diluted                                          $    0.08     $   (0.06)        $    0.01      $   (0.14)

Shares used in computing earnings
   per common share:
   Basic                                               22,691         8,949            22,101          8,891
   Diluted                                             25,021         8,949            24,704          8,891
</TABLE>

      See notes to unaudited condensed consolidated financial statements.

                                       3
<PAGE>   4





                       BINDVIEW DEVELOPMENT CORPORATION
                CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
                                  (UNAUDITED)
                                (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                                                   SIX MONTHS ENDED
                                                                                       JUNE 30,
                                                                            ---------------------------
                                                                               1999            1998
                                                                            ----------       ----------
<S>                                                                         <C>             <C>
 Cash flows from operating activities:
      Net income (loss)                                                     $      361       $  (1,212)
      Adjustments to reconcile net income (loss) to net cash provided
           by operating activities:
           Depreciation and amortization expense                                 1,338             446
           Increase in provision for bad debts                                     170              --
           Deferred income taxes                                                 2,147            (100)
           Changes in assets and liabilities:
                Decrease (increase) in accounts receivable                      (2,053)          1,517
                Decrease (increase) in other current assets                        855            (236)
                Increase in accounts payable                                       828              44
                Increase in accrued liabilities                                    398             226
                Increase in deferred revenues                                    1,741           1,608
                                                                            ----------       ---------
                     Net cash provided by operating activities                   5,785           2,293
                                                                            ----------       ---------

 Cash flows from investing activities:
      Purchase of property and equipment                                        (4,349)         (1,125)
      Purchase of investments                                                  (21,138)             --
      Proceeds from investment maturities                                       12,752              --
      Other                                                                          7             138
                                                                            ----------       ---------
                     Net cash used by investing activities                     (12,728)           (987)
                                                                            -----------      ----------

 Cash flows from financing activities:
      Proceeds from issuance of long-term debt                                      --             494
      Interest accrued on convertible debentures                                    --             127
      Proceeds from exercise of stock options and warrants                       2,050           2,184
                                                                            ----------       ---------
                     Net cash provided by financing activities                   2,050           2,805

      Effect of exchange rate changes on cash                                      (39)             --
                                                                            -----------      ---------
 Net increase (decrease) in cash and cash equivalents                           (4,932)          4,111
 Cash and cash equivalents at beginning of period                               48,010           9,197
                                                                            ----------       ---------
 Cash and cash equivalents at end of period                                 $   43,078       $  13,308
                                                                            ==========       =========
</TABLE>


      See notes to unaudited condensed consolidated financial statements.

                                       4
<PAGE>   5

                        BINDVIEW DEVELOPMENT CORPORATION
            CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
                                  (UNAUDITED)
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                                                                        CUMULATIVE
                                                                ADDITIONAL     COMMON                     OTHER          TOTAL
                                              COMMON STOCK        PAID-IN      STOCK      ACCUMULATED  COMPREHENSIVE  SHAREHOLDERS'
                                             SHARES    AMOUNT     CAPITAL   TO BE ISSUED   DEFICIT     INCOME (LOSS)     EQUITY
                                           ---------   ------   ---------   ------------  ----------- --------------- -------------
<S>                                        <C>         <C>      <C>         <C>           <C>         <C>             <C>
 Balance at December 31, 1998                 21,103     $  1   $  65,675    $   3,352    $  (10,532)     $   40         $  58,536
 Exercise of stock options                     1,163       --       2,050           --            --          --             2,050
 Tax benefit related to exercise
     of employee stock options                    --       --       4,415           --            --          --             4,415
 Issuance pursuant to business acquired          175       --       3,352       (3,352)           --          --                --
 Conversion of convertible debentures and
     preferred stock into common stock           599       --       7,658           --            --          --             7,658
 Foreign currency translation adjustment          --       --          --           --            --         (84)              (84)
 Net income for the six months ended
    June 30, 1999                                 --       --          --           --           361          --               361
                                             -------     ----   ---------    ---------    ----------      ------         ---------

 Balance at June 30, 1999                     23,040     $  1   $  83,150    $      --    $  (10,171)     $  (44)        $  72,936
                                             =======     ====   =========    =========    ===========     =======        =========
</TABLE>

       See notes to unaudited condensed consolidated financial statements

                                       5
<PAGE>   6
                        BINDVIEW DEVELOPMENT CORPORATION
         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                 (IN THOUSANDS)

NOTE 1 - BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements of
BindView Development Corporation, a Texas corporation (the "Company" or
"BindView"), reflect all adjustments (consisting of normal recurring accruals)
which, in the opinion of management, are necessary for a fair presentation of
the results for the interim periods presented. These financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements.

These financial statements should be read in conjunction with Item 5 of this
report and the Company's annual audited financial statements and the
supplemental financial statements for the year ended December 31, 1998, which
are included in the Annual Report on Form 10-K and Amendment No. 1 to the
Company's Form 8-K.

Operating results for the three month period and six month period ended June
30, 1999 are not necessarily indicative of the results that may be expected for
the full year ending December 31, 1999 or for other periods.

NOTE 2 - DESCRIPTION OF BUSINESS

The Company was incorporated in May 1990. Prior to 1995, the Company was known
as The LAN Support Group, Inc. The Company develops, markets and supports a
suite of systems and security management software products that manage the
security and integrity of complex, distributed client/server networks operating
on Microsoft Windows NT and Novell NetWare environments.

NOTE 3 - EARNINGS PER SHARE

Basic earnings per common share is computed using the weighted average number
of shares outstanding. Diluted earnings per common share is computed using the
weighted average number of shares outstanding, adjusted for the incremental
shares attributed to outstanding shares of convertible preferred stock,
convertible debentures and outstanding stock options and warrants to purchase
common stock unless such inclusion would be anti-dilutive. For the quarter and
six months ended June 30, 1999, incremental shares of 2,330 and 2,603,
respectively, were used in the calculation of diluted earnings per common
share.

NOTE 4 - SHORT-TERM AND LONG-TERM INVESTMENTS

Short-term investments have original maturities of more than three months and a
remaining maturity of less than one year. Long-term investments have original
maturities of more than twelve months. These investments are stated at cost,
which approximates market, as it is the intent of the Company to hold these
securities until maturity.

NOTE 5 - RECENT ACQUISITIONS

In December of 1998, the Company committed to deliver 175 shares of its common
stock in exchange for all of the outstanding equity interests of Curasoft, Inc.
in a transaction accounted for as a purchase. In February of 1999, the Company
issued 175 shares of common stock to satisfy this obligation.


6
<PAGE>   7
On March 1, 1999, the Company merged with Netect, Ltd. ("Netect") in a
stock-for-stock transaction accounted for as a pooling of interests. Netect
develops and markets corporate security solutions for Internet/Intranet
networks. In connection with the merger, the Company issued 1,161 shares of
common stock, based upon an exchange ratio of 0.400022101 shares of BindView
common stock for each share of Netect common stock. As a result of this merger,
all of the outstanding convertible preferred stock and convertible debentures
of Netect were exchanged for the Company's common stock. Transaction costs of
$1,533 and restructuring cost of $991 were incurred as a result of this merger.
Accrued but unpaid transaction and restructuring expenses totaled $382 on June
30, 1999.

The detail of the transaction and restructuring expenses and the remaining
provision for these expenses as of June 30, 1999, were as follows:

<TABLE>
<CAPTION>
 ---------------------------- ----------------- ---------------------- --------------------------
 (in thousands)                 Transaction         Restructuring         Accrued Expenses at
                                  Expenses            Expenses               June 30, 1999
 ---------------------------- ----------------- ---------------------- --------------------------
<S>                           <C>               <C>                    <C>
 Investment banking                     $  590                 $   --                      $  --
 Accounting and legal                      565                     --                         --
 Transfer fees                             138                     --                         --
 Other transaction costs                   240                     --                         --
 Employee severance and                     --                    575                        133
      Related costs
 Israeli office closing                     --                    357                        190
 Other restructuring costs                  --                     59                         59

                              ----------------- ---------------------- --------------------------
 TOTAL                                 $ 1,533                 $  991                      $ 382
 ---------------------------- ----------------- ---------------------- --------------------------
</TABLE>


The historical financial data included herein has been restated to reflect the
merger with Netect by combining the historical results for the Company and
Netect for all periods presented. There were no material transactions between
BindView and Netect during the periods prior to the merger.

NOTE 6 - INCOME TAX

As of June 30, 1999, the Company's remaining net operating loss carryforwards
for tax purposes approximate 8,800 in Israel and 2,900 for other foreign
subsidiaries, which may be utilized to reduce future taxable income. These tax
loss carryforwards will generally expire between 2003 and 2014. The Company's
ability to utilize the net operating loss carryforwards related to its
acquisitions may be subject to certain limitations. The valuation allowance for
the related deferred tax asset approximates 3,800 and is primarily composed
of Netect pre-acquisition tax loss carryforwards which management has
determined are more likely than not to expire unused.

NOTE 7 - SEGMENT REPORTING

During 1999, the Company adopted Statement of Financial Accounting Standard
No. 131 "Disclosures About Segments of an Enterprise and Related Information".
The Company currently operates in one segment as defined by this standard. The
adoption of this standard did not have a material impact on disclosures with
respect to the Company's financial condition or results of operations.

                                       7
<PAGE>   8



ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
        RESULTS OF OPERATIONS

Management's Discussion and Analysis of Financial Condition and Results of
Operations contains forward-looking statements which involve risks and
uncertainties. The Company's actual results may differ significantly from the
results discussed in the forward-looking statements. Factors that might cause
such a difference include those discussed in the "Risk Factors" set forth in
the Company's Annual Report on Form 10-K for the year ended December 31, 1998
and those discussed herein under the heading "Cautionary Statements". The
following discussion should be read in conjunction with the unaudited condensed
consolidated financial statements and the accompanying notes.

In connection with the merger with Netect on March 1, 1999, accounted for as a
pooling of interests, the historical financial data included herein has been
restated to reflect this merger.

RESULTS OF OPERATIONS

     The following table sets forth, for the periods indicated, the percentage
of selected items in the Condensed Consolidated Statement of Operations and
Comprehensive Income (Loss) to total revenues:
<TABLE>
<CAPTION>
                                                      QUARTER                          SIX MONTHS
                                                  ENDED JUNE 30,                     ENDED JUNE 30,
                                              -----------------------            -----------------------
                                               1999             1998              1999             1998
                                              ------           ------            ------           ------
                                                           (PERCENT OF TOTAL NET REVENUES)
<S>                                           <C>              <C>               <C>              <C>
 Revenues:
      Licenses                                  71.7             77.8              71.0             76.7
      Services                                  28.3             22.2              29.0             23.3
                                              ------           ------            ------           ------
           Total revenues                      100.0            100.0             100.0            100.0
                                              ------           ------            ------           ------

 Cost of revenues:
      Cost of licenses                           2.3              3.2               2.2              3.3
      Cost of services                           3.4              2.8               3.5              3.2
                                              ------           ------            ------           ------
           Total cost of revenues                5.7              6.0               5.7              6.5
                                              ------           ------            ------           ------
 Gross profit                                   94.3             94.0              94.3             93.5
                                              ------           ------            ------           ------

 Costs and expenses:
      Sales and Marketing                       41.5             51.7              43.0             52.8
      Research and Development                  26.5             34.3              27.5             33.8
      General and Administrative                 9.9             11.6              10.3             13.3
      Transaction and Restructuring (1)          1.5               --               9.4               --
                                              ------           ------            ------           ------
 Operating income (loss)                        14.9             (3.6)              4.1             (6.4)
 Other income, net                               4.8              1.0               5.0              0.9
                                              ------           ------            ------           ------
 Income (loss) before income tax provision      19.7             (2.6)              9.1             (5.5)
 Provision for income tax                        6.9              4.2               7.8              3.3
                                              ------           ------            ------           ------
 Net income (loss)                              12.8             (6.8)              1.3             (8.8)
                                              ======           ======            ======           ======
</TABLE>

Notes: (1) Represents $238 and $2,524 non-recurring, non-tax deductible charges
related to costs associated with the Netect merger and restructuring for the
quarter and six months ended June 30, 1999, respectively.

REVENUES

The Company's revenues are derived from the sale of software products and
related services including subscription contracts. The Company's revenues
increased $7.0 million or 88% in the second quarter of 1999 over the comparable
quarter of the prior year and $13.1 million or 94% over the comparable six
months of the prior year.

                                       8
<PAGE>   9
The Company's license revenues increased $4.6 million or 73% in the second
quarter of 1999 over the comparable quarter of the prior year and $8.5 million
or 80% over the comparable six months of the prior year. The increase in the
Company's license revenues over these periods is a result of continued market
acceptance of the BindView EMS product family and revenues generated from new
product introductions. The results of the quarter may not be indicative of
results for the full year. No assurances can be made that revenues will
continue to increase at the rates reflected in quarter-to-quarter and
year-to-year comparisons.

The Company's service revenues increased $2.5 million or 139% in the second
quarter of 1999 over the comparable quarter of the prior year and $4.6 million
or 142% over the comparable six months of the prior year. The increase in the
Company's service revenues over these periods is a result of increase in
purchases and renewals of subscription contracts by the Company's growing
installed customer base. Because subscription contracts are recognized ratably
over the contract term, this increase in these revenues as a percentage of
total revenues results in greater deferred revenue recognition. Due to the
costs associated with these services, this may negatively impact the Company's
operating margins.

COST OF REVENUES

Cost of licenses includes product manuals, packaging, distribution and media
costs for the Company's software products. The Company's cost of licenses
increased $83,000 or 33% in the second quarter of 1999 over the comparable
quarter of the prior year and $126,000 or 27% over the comparable six months of
the prior year. The cost of licenses has increased primarily due to increases
in product shipments. The Company believes these costs will remain relatively
constant as a percentage of total revenue, although there will continue to be
quarterly fluctuations due to the timing of certain expenses.

Cost of services includes personnel and other costs related to technical
support and professional services. The Company's cost of services increased
$288,000 or 127% in the second quarter of 1999 over the comparable quarter of
the prior year and $514,000 or 117% over the comparable six months of the prior
year. The cost of services has increased primarily due to increases in the cost
of technical support staff providing support to the Company's growing customer
base and increases in the cost of professional services staff providing
customer training and implementation services.

COSTS AND EXPENSES

Sales and marketing expenses consist primarily of salaries, commissions and
bonuses earned by sales and marketing personnel, general office expenses,
travel and entertainment and promotional expenses. The Company's sales and
marketing expenses increased $2.1 million or 51% in the second quarter of 1999
over the comparable quarter of the prior year and $4.3 million or 58% over the
comparable six months of the prior year. The increase in the sales and
marketing expenses is related to the hiring of additional personnel in
connection with the building of the Company's sales force and the additional
facilities and computer systems required by these additional personnel. Sales
and marketing expenses decreased to 41.5% of revenues in the second quarter of
1999 compared to 51.7% of revenue in the corresponding period of 1998 and
decreased to 43.0% of revenues from 52.8% of revenues for the six months ended
June 30, 1999 and 1998, respectively. The decrease in sales and marketing
expenses as a percentage of revenues is related to the reduction of duplicative
marketing efforts associated with Netect over these periods, the start-up
costs incurred with the launch of the Company's direct telesales organization
in Germany and France during the first half of 1998 and the ongoing efforts of
the Company to manage operating expenses. Due to the seasonal nature of
revenues, the Company anticipates that for the remaining fiscal quarters of
1999, sales and marketing expenses will increase in absolute dollars as the
Company continues to invest in marketing campaigns to drive sales growth and
increase its expansion of domestic and international sales efforts.

Research and development expenses consist primarily of salaries and benefits
for product development, product management and quality assurance personnel,
payments to contract programmers and expendable equipment purchases. The
Company's research and development expenses increased $1.2 million or 45% in
the second quarter of 1999 over the comparable quarter of the prior year and
$2.7 million or 58% over the comparable six months of the prior year. The
increase in the research and development expenses is related to increased
personnel, additional facilities and an increase in the computer systems and
software development tools required by the additional personnel. Research and
development expenses decreased to 26.5% of revenues in the second quarter of
1999 compared to 34.3% in the corresponding period of 1998 and decreased to
27.5% of revenues from 33.8% of revenues for the six months ended June 30, 1999
and 1998, respectively. This decline in research and development expenses as a

                                       9
<PAGE>   10
percentage of revenue is a result of certain product lines reaching a stage in
their product life cycle requiring less research and development effort
relative to the respective license revenue generated by these products and the
Company's ongoing efforts to manage operating expenses. However, the Company
believes that a significant research and development investment is essential
for it to maintain and grow it's market position and continue to expand its
product line. Accordingly, the Company anticipates it will continue to devote
substantial resources to product research and development for the foreseeable
future, and that research and development expenses will increase in absolute
dollars for the remaining fiscal quarters of 1999.

General and administrative expenses consist primarily of salaries, personnel
and related costs for the Company's executive, administrative, finance and
information services staff. The Company's general and administrative expenses
increased $561,000 or 61% in the second quarter of 1999 over the comparable
quarter of the prior year and $928,000 or 51% over the comparable six months of
the prior year. The increase in the general and administrative expenses is
related to the increase in the allowance for doubtful accounts over this period
and increased staffing, facilities costs and associated expenses necessary to
manage and support the Company's increased scale of operations. General and
administrative expenses declined to 9.9% of revenues in the second quarter of
1999 compared to 11.6% in the corresponding period of 1998 and declined to 10.3%
of revenues from 13.3% of revenues for the six months ended June 30, 1999 and
1998, respectively. This decline in general and administrative expenses as a
percentage of revenue is a result of the reduction of duplicative staff
associated with the Netect acquisition and the Company's ongoing efforts to
manage operating expenses. The Company expects that for the remainder of 1999
general and administrative expenses will decline as a percentage of total
revenue, but increase in absolute dollars.

TRANSACTION AND RESTRUCTURING EXPENSES

On March 1, 1999, the Company merged with Netect, Ltd. ("Netect") in a
stock-for-stock transaction accounted for as a pooling of interests. The
Company incurred $238,000 in restructuring expenses in the second quarter of
1999 and $2.5 million in transaction and restructuring expenses for the six
months ended June 30, 1999. Accrued but unpaid transaction and restructuring
expenses totaled $382,000 on June 30, 1999. Transaction expenses related to
this merger consist primarily of accounting, investment banking, legal and
transaction related transfer fees. The Company incurred $1.5 million in
transaction expenses. Restructuring expenses related to this merger consist
primarily of employee severance and costs associated with the closing of
Netect's Israeli operations. The Company incurred $1.0 million in restructuring
expenses. The Company expects that it will not incur a significant amount of
additional transaction or restructuring expenses related to this merger.

The detail of the transaction and restructuring expenses and the remaining
provision for these expenses as of June 30, 1999, were as follows:

<TABLE>
<CAPTION>

  --------------------------- ----------------- ---------------------- --------------------------
  (in thousands)                Transaction         Restructuring         Accrued Expenses at
                                  Expenses            Expenses               June 30, 1999
  --------------------------- ----------------- ---------------------- --------------------------
<S>                           <C>               <C>                    <C>
  Investment banking                    $  590                 $   --                     $   --
  Accounting and legal                     565                     --                         --
  Transfer fees                            138                     --                         --
  Other transaction costs                  240                     --                         --
  Employee severance and                    --                    575                        133
       Related costs
  Israeli office closing                    --                    357                        190
  Other restructuring costs                 --                     59                         59

                              ----------------- ---------------------- --------------------------
  TOTAL                                $ 1,533                 $  991                      $ 382
  --------------------------- ----------------- ---------------------- --------------------------
</TABLE>


                                      10
<PAGE>   11
OTHER INCOME, NET

The Company had other income of $728,000 in the second quarter of 1999 compared
to $81,000 in the corresponding period of 1998. This increase is primarily due
to an increase in interest income related to higher cash, cash equivalents and
investment balances as a result of the proceeds from Company's initial public
offering in July 1998, secondary offering in December 1998 and positive cash
flow from operating activities.

PROVISION FOR INCOME TAXES

The Company is currently generating a research and development credit for
federal income tax purposes. As a result of this credit, the Company's
effective tax rate for the second quarter of 1999 is 35%. If the Company is
unable to receive this credit in subsequent quarters, the effective tax rate
could rise to 39%.

During the first quarter of 1999, the Company did not recognize a tax benefit
for certain losses generated by Netect due to limitations on the Company's
ability to realize such benefits given the former structure of Netect and the
Company's plans for Netect's future operations. These factors, and the
non-deductibility of the transaction expenses incurred in connection with the
company's merger with Netect have resulted in the Company's effective tax rate
exceeding 35% for the first quarter and the six months ended June 30, 1999. The
Company expects that its effective tax rate will stabilize near 35% for each of
the remaining fiscal quarters of 1999.

LIQUIDITY AND CAPITAL RESOURCES

The Company's working capital decreased to $58.0 million at June 30, 1999 from
$58.9 million at December 31, 1998. The Company's cash, cash equivalent,
short-term and long-term investments balance increased to $61.7 million at June
30, 1999 from $58.2 million at December 31, 1998 due primarily to positive cash
flow operating activities and proceeds from the exercise of stock options
partially offset by the purchases of property and equipment.

The Company believes that the net proceeds of its initial and secondary
offerings, together with existing cash, cash equivalents, short-term
investments and cash flow from operations will be sufficient to meet its normal
working capital requirements for at least the next 12 months. Thereafter, the
Company may require additional funds to support its working capital
requirements or for other purposes and may seek to raise such additional funds
through public or private equity financing or from other sources. There can be
no assurance that additional financing will be available at all or that, if
available, such financing will be obtainable on terms favorable to the Company
or that any additional financing would not be dilutive.

The Company currently intends to use the net proceeds of its initial and
secondary public offerings for working capital and general corporate purposes,
including financing accounts receivable and capital expenditures made in the
ordinary course of business, as well as for possible acquisitions of
businesses, products and technologies that are complementary to those of the
Company. There can be no assurance that the Company will be able to identify
any acquisitions of businesses, products or technology that are complimentary
to those of the Company or are on terms that are acceptable to the Company.
Pending such uses, the net proceeds will continue to be invested in government
securities and other short-term, investment-grade, interest-bearing
instruments.

YEAR 2000 ISSUES

Background. Some computers, software and other equipment include programming
code in which calendar year data is abbreviated to only two digits. As a result
of this design decision, some of these systems could fail to operate or fail to
produce correct results if "00" is interpreted to mean 1900 or some other
default condition, rather than 2000. These problems are widely expected to
increase in frequency and severity as the year 2000 approaches and are commonly
referred to as the "Millennium Bug" or "Year 2000 Problem".

                                      11
<PAGE>   12
Assessment. The Year 2000 Problem could affect computers, software and other
equipment that we and our customers and suppliers use. Accordingly, we have
reviewed our internal computer programs and systems to ensure that they will be
Year 2000 compliant. We presently believe that our computer systems will be
Year 2000 compliant in a timely manner. However, while the estimated cost of
these efforts is not expected to be material to our financial position or any
year's results of operations, there can be no assurance to this effect.

Customers. Although the latest versions of BindView EMS are designed to be Year
2000 compliant, releases of BindView EMS before version 5.2a have not been
tested for Year 2000 compliance and/or are not Year 2000 compliant. Customers of
BindView EMS before version 5.2a under subscription contracts have been provided
upgrades to versions of BindView EMS that are designed to be Year 2000
compliant. Customers that have not upgraded to Year 2000 compliant versions of
BindView EMS will have to either i) enter into a subscription agreement with the
Company and upgrade to a compliant version or ii) purchase the latest Year 2000
compliant version of BindView EMS. We believe that it is not possible to
determine with complete accuracy that all Year 2000 Problems affecting our
software products have been identified or corrected due to the complexity of our
products and the fact that these products interact with other third party vendor
products and operate on computer systems that are not under our control. Because
of the Year 2000 Problem, we have and may continue to encounter potential
customer sites that are unwilling to purchase any additional software for their
computing environments until after the millennium. If a significant amount of
our customers lock down their computing environments because of the Year 2000
Problem, this may have an adverse effect on the Company's revenues.

Internal Infrastructure. We believe that we have identified substantially all
of the major computers, software applications and related equipment used in
connection with our internal operations that must be modified, upgraded or
replaced to minimize the possibility of a material disruption to our business.
We commenced the process of modifying, upgrading and replacing the systems that
have been identified as potentially being adversely affected and completed this
process during the first quarter of 1999. The costs associated with upgrading
and replacing these systems did not exceed $1.0 million and substantially all
of these costs have been capitalized.

Systems Other Than Information Technology Systems. In addition to computers and
related systems, the operation of office and facilities equipment, such as fax
machines, photocopiers, telephone switches, security systems, elevators and
other common devices may be affected by the Year 2000 Problem. We have recently
replaced our primary telephone switch with equipment that provides additional
capacity to meet the Company's growth needs and is believed to be Year 2000
compliant. We believe non-information technology equipment failures that could
occur because of the Year 2000 Problem are not likely to have a material
adverse effect on our business.

We estimate that our total cost of completing any required modifications,
upgrades or replacements of these internal systems will not have a material
effect on our business, financial condition or results of operations.

Suppliers. We have been gathering information from vendor web sites and
available compliance statements and have initiated communications with
third-party suppliers of our major computers, software and other equipment
used, operated or maintained by us to identify and, to the extent possible,
resolve issues involving the Year 2000 Problem. However, we have limited or no
control over the actions of such third-party suppliers. Thus, while we expect
that we will be able to resolve any significant Year 2000 Problems with such
systems, there can be no assurance that our suppliers will resolve any or all
Year 2000 Problems with such systems before the occurrence of a material
disruption to our business or any of our suppliers. Any failure of these
third-parties to resolve Year 2000 problems with their systems in a timely
manner could have a material adverse effect on our business, financial
condition or results of operation.

Most Likely Consequences of Year 2000 Problems. We expect to identify and
resolve all Year 2000 Problems that could materially adversely affect our
business, financial condition or results of operations. However, we believe
that it is not possible to determine with complete certainty that all Year 2000
Problems affecting us have been identified or corrected. The number of devices
that could be affected and the interactions among these devices are simply too
numerous. In addition, we cannot accurately predict how many failures related
to the Year 2000 Problem will occur or the severity, duration or financial
consequences of such failures. As a result, we expect that we could possibly
suffer the following consequences:

-    a significant number of operational inconveniences and inefficiencies for
     us and our customers that may divert our time and attention and financial
     and human resources from our ordinary business activities; and

                                      12
<PAGE>   13
- a lesser number of serious system failures that may require significant
  efforts by us or our customers to prevent or alleviate material business
  disruptions.

Should these possibilities actually occur, we could experience operating
expense levels higher then currently budgeted or reductions in our expected
growth rates.

Contingency Plans. We have developed contingency plans as part of our efforts
to identify and correct Year 2000 Problems affecting our internal systems.
These plans include (i) accelerated replacement of affected equipment or
software, (ii) short to medium-term use of backup equipment and software, (iii)
increased work hours for our personnel or use of contract personnel to correct
on an accelerated schedule any Year 2000 Problems which arise or to provide
manual workarounds for information systems (iv) divert attention from other
critical ongoing business initiatives and (v) and other similar approaches. If
we are required to implement any of these contingency plans, such plans could
have a material adverse effect on our business, financial condition or results
of operations. However, based on the activities described above, the Company
does not believe that the Year 2000 Problem will have a material adverse effect
on the Company's business, financial condition or results of operations.

The discussion of the Company's efforts and expectations relating to Year 2000
compliance are forward-looking statements. The Company's ability to achieve
Year 2000 compliance and the level of incremental costs associated therewith,
could be adversely impacted by, among other things, the availability and cost
of programming and testing resources, vendors' ability to modify proprietary
software and unanticipated problems identified in the Company's ongoing
compliance review.

The foregoing statements are intended to be and are hereby designated "Year
2000 Readiness Disclosure" within the meaning of the Year 2000 Information and
Readiness Act.



                                      13
<PAGE>   14


                           PART II. OTHER INFORMATION

ITEM 5.  OTHER INFORMATION

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q includes "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. All statements
other than statements of historical facts included in this Report, including
without limitation, statements regarding the Company's financial position,
business strategy, products, products under development, markets, budgets and
plans and objectives of management for future operations, are forward-looking
statements. Although the Company believes that the expectations reflected in
such forward-looking statements are reasonable, it can give no assurance that
such expectations will prove to have been correct. Important factors that could
cause actual results to differ materially from the Company's expectations are
disclosed in statements set forth under "Cautionary Statements" and elsewhere
in this Report, including, without limitation, in conjunction with the
forward-looking statements included in this Report. All subsequent written and
oral forward-looking statements attributable to the Company, or persons on its
behalf, are expressly qualified in their entirety by the Cautionary Statements
and such other statements. For purposes of this Item 5, references to the
"Company", "BindView", "we", "us" and "our" refer to BindView Development
Corporation and its subsidiaries.

CAUTIONARY STATEMENTS

OUR QUARTERLY REVENUES, EXPENSES AND OPERATING RESULTS MAY FLUCTUATE
SIGNIFICANTLY. These fluctuations may be due to a number of factors, including:

    -   demand for our products;
    -   size and timing of significant orders and their fulfillment;
    -   our ability to develop and upgrade our technology;
    -   changes in our level of operating expenses;
    -   our ability to compete in a highly competitive market;
    -   undetected software errors and other product quality problems;
    -   changes in our sales incentive plans and staffing of sales territories;
        and
    -   changes in the mix of domestic and international revenues and the level
        of international expansion.

Generally, we do not operate with a backlog because we ship our products and
recognize revenue shortly after orders are received. At the time we ship our
products we have satisfied all of the criteria of Statement of Position No.
97-2 "Software Revenue Recognition," and therefore we recognize the related
license revenue. As a result, orders booked throughout a quarter substantially
impact product revenues in that quarter. Our sales also fluctuate throughout
the quarter as a result of customer buying patterns. We base our expenses to a
significant extent on our expectations of future revenues. Most of our expenses
are fixed in the short term and we may not be able to quickly reduce spending
if our revenues are lower than we had projected. If our revenue levels do not
meet our projections, we expect our operating results to be adversely and
disproportionately affected.

Our quarterly operating results also are subject to certain seasonal
fluctuations. Year-end customer buying patterns and compensation policies based
on annual revenue quotas have caused our revenues to be strongest in the fourth
quarter of the year and to decrease in the first quarter of the following year.
In future periods, we expect that these seasonal trends may cause first quarter
revenues to be significantly lower than the level achieved in the preceding
fourth quarter.

Prior to January 1, 1998, we provided telephone support free of charge and sold
product upgrades separately or through subscription contracts. We now require
our customers to purchase a subscription policy in order to receive product
upgrades and technical support. Unlike software license revenues that we
generally recognize upon shipment of the product, we recognize subscription
contract revenues ratably over the life of the contract term. As a result, if
we derive a larger percentage of our revenues from subscription contracts, we
will experience an increase in deferred revenue that is likely to decrease our

                                      14
<PAGE>   15
operating margins. Decreased operating margins may materially adversely affect
our business, operating results and financial condition.

As a result, we believe quarter-to-quarter comparisons of our revenues,
expenses and results of operations are not necessarily meaningful. You should
not rely on our quarterly revenues, expenses and results of operations to
predict our future performance.

WE HAVE A LIMITED OPERATING HISTORY. Although BindView was founded in 1990, we
have derived substantially all of our revenues since 1995 from sales of
BindView NCS, replaced in 1996 by BindView EMS. We therefore have a limited
operating history based on our primary products. An investor in our Company
must consider the risks and uncertainties frequently encountered by software
companies in the early stages of development, particularly those faced by
companies in the highly competitive and rapidly evolving systems management
software market. To compete in this market, we believe that we must devote
substantial resources to expanding our sales and marketing organization and to
continue product development. As a result, we will need to recognize
significant quarterly revenues to remain profitable. Our revenues have
increased in recent years, and revenues for recent quarters have exceeded
revenues for the same quarter for the prior year. However, we cannot be certain
that we can sustain these growth rates or that we will remain profitable on a
quarterly or annual basis in the future.

OUR MARKETS ARE HIGHLY COMPETITIVE. We face competition from different sources.
Currently, our products compete with products from the following organizations:

    -    providers of security analysis and audit products, such as Axent
         Technologies, Inc. Security Dynamics Technologies, Inc., ISS Group,
         Inc. and Network Associates Inc.;
    -    providers of stand-alone inventory and asset management products, such
         as Tally Systems Corp.;
    -    providers of LAN desktop management suites, such as Intel Corporation,
         Hewlett-Packard Company and Microsoft Corporation;
    -    providers of Year 2000 assessment products, such as Greenwich Mean
         Time--UTA, L.C.;
    -    providers of event notification and response technology, such as
         Attention Software, Inc.; and
    -    providers of Windows NT management and migration tools, such as
         Mission Critical Software, Entevo Corp. and FastLane Technologies Inc.
    -    In addition, certain management features included in our products
         compete with the native tools from Novell, Inc. and third-party tools
         from certain vendors, such as Computer Associates, Inc. and other
         companies.

We expect competition in the network management software market to increase
significantly as new companies enter the market and current competitors expand
their product lines and services. Many of these potential competitors are
likely to enjoy substantial competitive advantages, including:

    -    greater resources that can be devoted to the development, promotion
         and sale of their products;
    -    more established sales channels;
    -    greater software development experience; and
    -    greater name recognition.

We also believe that operating system software vendors, particularly Microsoft
and Novell, could enhance their products to include functionality that we
currently provide in our products. If these vendors include our software
functionality as standard features of their operating system software, our
products could become obsolete. Even if the functionality of the standard
software features of these vendors is more limited than ours, there is a
substantial risk that a significant number of customers would elect to keep
this limited functionality rather than purchase additional software.

To be competitive, we must respond promptly and effectively to the challenges
of technological change, evolving standards and our competitors' innovations by
continuing to enhance our products, services and sales channels. Any pricing
pressures, reduced margins or loss of market share resulting from our failure
to compete effectively could materially adversely affect our business.

OUR PRODUCTS ARE SUBJECT TO RAPID TECHNOLOGICAL CHANGE. The market for our
products is characterized by rapid technological change, frequent new product

                                      15
<PAGE>   16
introductions and enhancements, uncertain product life cycles, changes in
customer demands and evolving industry standards. Our products could be
rendered obsolete if new products based on new technologies are introduced or
new industry standards emerge. We rely heavily on our relationships with
Microsoft and Novell and attempt to coordinate our product offerings with the
future releases of their operating systems. These companies may not notify us
of feature enhancements prior to new releases of their operating systems in the
future. In that case, we may not be able to introduce products on a timely
basis that capitalize on new operating system releases and feature
enhancements.

CLIENT/SERVER COMPUTING ENVIRONMENTS ARE INHERENTLY COMPLEX. As a result, we
cannot accurately estimate our software product life cycles. New products and
product enhancements can require long development and testing periods, which
depend significantly on our ability to hire and retain increasingly scarce and
technically competent personnel. Significant delays in new product releases or
significant problems in installing or implementing new product releases could
seriously damage our business. We have, on occasion, experienced delays in the
scheduled introduction of new and enhanced products and cannot be certain that
such delays will not occur again.

Our future success will depend, in part, upon our ability to enhance existing
products, develop and introduce new products, satisfy customer requirements and
achieve market acceptance. We cannot be certain that we will successfully
identify new product opportunities and develop and bring new products to market
in a timely and cost-effective manner. Further, the products, capabilities or
technologies developed by others may render our products or technologies
obsolete or shorten their life cycles.

WE ARE DEPENDENT UPON CONTINUED GROWTH OF THE MARKET FOR WINDOWS NT AND NOVELL
NETWARE OPERATING SYSTEMS. We depend upon the success of Microsoft's Windows NT
and Novell's NetWare operating systems. In particular, market acceptance of our
products depends on the increasing complexity of these operating systems and
the lack of effective tools to simplify system administration and security
management for these environments. Although demand for Windows NT and NetWare
operating systems has grown in recent years, this market is still emerging and
we cannot be certain that it will continue to grow. If the market does continue
to grow, we cannot be certain that the market for our products will continue to
develop or that our products will be widely accepted. If the markets for our
products fail to develop or develop more slowly than we anticipate, our
business could be materially adversely affected.

The percentages of our revenues attributable to software licenses for
particular operating system platforms can change from time to time. A number of
factors outside our control can cause these changes, including changing market
acceptance and penetration of the various operating system platforms which we
support and the relative mix of development and installation by value-added
resellers ("VARs") of application software operating on such platforms.

PRODUCT CONCENTRATION. Substantially all of our revenues are from the sale of
our NOSadmin and NETinventory products. We anticipate that these products along
with products additions as a result of the Curasoft and Netect acquisitions
will account for majority all of our revenues for the foreseeable future. Our
future operating results will depend on continued market acceptance of NOSadmin
and NETinventory, introduction of new products from the Curasoft and Netect
acquisitions, enhancements to these products and the continued development of
additional snap-in modules for our Enterprise Console product. Competition,
technological change or other factors could reduce demand for, or market
acceptance of any or all of our products and could substantially damage our
business. Although we currently plan to broaden our product line, we cannot be
certain that we will be able to reduce our product concentration or that we
will be able to generate material revenues from products acquired as a result
of the Curasoft and Netect acquisitions.

RISKS ASSOCIATED WITH LENGTH OF SALES CYCLE. We have sold our products to
customer workgroups and corporate divisions. As a result, our sales cycle has
ranged from three to six months. Recently, we have focused more of our selling
effort on products for the customer's entire enterprise and have found that our
sales cycle to enterprises has ranged from six to twelve months. The sales
cycle to enterprises is typically longer for a number of reasons, including:


                                      16
<PAGE>   17
    -    the significant resources committed to an evaluation of network
         management software by an enterprise require us to expend substantial
         time, effort and money educating them on the value of our products
         and services; and
    -    decisions to license and deploy enterprise-wide software generally
         involve an evaluation of our software by a significant number of
         personnel of the enterprise in various functional and geographic
         areas, each often having specific and conflicting requirements.

As a result, we cannot predict the timing and amount of specific sales. Our
inability to complete one or more enterprise-wide sales in a particular quarter
or calendar year could materially adversely affect our business and could cause
our operating results to vary significantly from quarter to quarter. For more
information, see "-- Our Quarterly Financial Results are Subject to Significant
Fluctuations".

NEED TO MANAGE CHANGING OPERATIONS. We have expanded our operations rapidly in
recent years. We intend to continue to expand in the foreseeable future to
pursue existing and potential market opportunities. This rapid growth places a
significant demand on management and operational resources. In order to manage
growth effectively, we must implement and improve our operational systems,
procedures and controls on a timely basis. If we fail to implement and improve
these systems, our business, operating results and financial condition will be
materially adversely affected.

DEPENDENCE ON KEY PERSONNEL. Our success depends largely on the efforts of our
executive officers, particularly Eric J. Pulaski, the President and Chief
Executive Officer of BindView. We do not have an employment contract requiring
Mr. Pulaski to continue his employment for any period of time. We do not
maintain key man life insurance policies on any of our executive officers.

We believe that our future success will depend in large part upon our ability
to attract and retain highly skilled research and development, technical
support and sales and marketing personnel. We face intense competition for
qualified personnel, and we cannot be certain that we will successfully attract
and retain additional qualified personnel in the future. The loss of the
services of one or more of our key individuals or the failure to attract and
retain additional qualified personnel could substantially damage our business.

RISKS ASSOCIATED WITH INTERNATIONAL SALES AND OPERATIONS. During 1998, 1997 and
1996, we derived approximately 10%, 13% and 10% of our revenues, respectively,
from sales outside North America. We only recently opened direct telesales
offices outside the United States. We have historically generated revenues
outside North America through indirect channels, including VARs and other
distributors. We are in the early stages of developing our indirect
distribution channels in certain markets outside the United States. We cannot
be certain that we will be able to attract third parties that will be able to
market our products effectively or to provide timely and cost-effective
customer support and service. Our reseller arrangements generally provide that
resellers may carry competing product offerings. We cannot be certain that any
distributor or reseller will continue to represent our products. The inability
to recruit, or the loss of, important sales personnel, distributors or
resellers could materially and adversely affect our business.

As we expand our sales and support operations internationally, we anticipate
that international revenues will grow as a percentage of our total revenues.
To successfully expand international sales, we must:
    -    establish additional international direct telesales offices;
    -    expand the management and support organizations for our international
         sales channel;
    -    hire additional personnel;
    -    customize our products for local markets;
    -    recruit additional international resellers where appropriate; and
    -    expand the use of our direct telesales model.

If we are unable to generate increased sales through a direct telesales model,
we will incur higher personnel costs without corresponding increases in
revenue, resulting in lower operating margins for our international operations.
In addition, employment policies vary among countries outside the United
States, which may reduce our flexibility in managing headcount and, in turn,

                                      17
<PAGE>   18
managing personnel-related expenses. If we do not address the risks associated
with international sales in a cost-effective and timely manner, our
international sales growth will be limited, operating margins could be reduced
and our business could be materially adversely affected. However, even if we
are able to successfully expand our international operations, we cannot be
certain that we will be able to maintain or increase international market
demand for our products.

LIMITED PROTECTION OF PROPRIETARY TECHNOLOGY; RISKS OF INFRINGEMENT. Our
success depends to a significant degree upon our software and other proprietary
technology. The software industry has experienced widespread unauthorized
reproduction of software products. We rely on a combination of trademark, trade
secret, and copyright law and contractual restrictions to protect our
technology. These legal protections provide only limited protection. However,
as our products are more globally distributed, this associated with the
unauthorized reproduction of software products could increase. The steps we
have taken may deter competitors from misappropriating our proprietary
information. However, we may not be able to detect unauthorized use or take
appropriate steps to enforce our intellectual property rights. If we litigated
to enforce our rights, litigation would be expensive, would divert management
resources and may not be adequate to protect our business. We also could be
subject to claims alleging infringement of third-party intellectual property
rights. In addition, we may be required to indemnify our distribution partners
and end-users for similar claims made against them. Any claims against us could
require us to spend significant time and money in litigation, pay damages,
develop non-infringing intellectual property or acquire licenses to
intellectual property that is the subject of the infringement claims. As a
result, claims against us could materially adversely affect our business.

RISKS ASSOCIATED WITH COMPLETED AND POTENTIAL ACQUISITIONS. We have made and
may continue to make investments in complementary companies, technologies,
services or products if we find appropriate opportunities. If we buy a company,
we could have difficulty assimilating the personnel and operations of the
acquired company. If we make other types of acquisitions, assimilating the
technology, services or products into our operations could be difficult.
Acquisitions can disrupt our ongoing business, distract management and other
resources and make it difficult to maintain our standards, controls and
procedures. We may not succeed in overcoming these risks or in any other
problems we might encounter in connection with any future acquisitions. We may
be required to incur debt or issue equity securities to pay for any future
acquisitions. In addition, there can be no assurance that we will be able to
successfully integrate our recent acquisitions of Curasoft and Netect or we
will be able to integrate the products and technology we acquired into our
sales model or product offerings.

RISKS OF UNDETECTED SOFTWARE ERRORS. Our software products are complex and may
contain certain undetected errors, particularly when first introduced or when
new versions or enhancements are released. We have previously discovered
software errors in certain of our new products after their introduction. We
cannot be certain that, despite our testing, such errors will not be found in
current versions, new versions or enhancements of our products after
commencement of commercial shipments. Such undetected errors could result in
adverse publicity, loss of revenues, delay in market acceptance or claims
against us by customers, all of which could materially adversely affect our
business.

YEAR 2000 RISKS. Background. Some computers, software and other equipment
include programming code in which calendar year data is abbreviated to only two
digits. As a result of this design decision, some of these systems could fail
to operate or fail to produce correct results if "00" is interpreted to mean
1900 or some other default condition, rather than 2000. These problems are
widely expected to increase in frequency and severity as the year 2000
approaches and are commonly referred to as the "Millennium Bug" or "Year 2000
Problem". See Management's Discussion and Analysis of Results of Operations and
Financial Condition.

RISK OF PRODUCT LIABILITY CLAIMS. Because our product design provides critical
network management services, we may receive significant liability claims. Our
agreements with customers typically contain provisions intended to limit our
exposure to liability claims. These limitations may not, however, preclude all
potential claims. Liability claims could require us to spend significant time
and money in litigation or to pay significant damages. As a result, any such
claims, whether or not successful, could seriously damage our reputation and
our business.

ANTI-TAKEOVER PROVISIONS. Incumbent management and our Board of Directors could
use certain provisions of our certificate of incorporation to make it more
difficult for a third party to acquire control of our company, even if the

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<PAGE>   19
change in control might be beneficial to our stockholders. This could
discourage potential takeover attempts and could adversely affect the market
price of our common stock.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)  Exhibits:

     The following exhibits are filed with this Quarterly Report.

     10.1 -- Employment Agreement between BindView Development and Marc
              Caminetsky

     10.2 -- Employment Agreement  between BindView Development and Paul Cormier

     11   -- Statement Regarding Computation of Loss Per Common Share

     27   -- Financial Data Schedule


(b) Reports on Form 8-K:

     The Company filed a Form 8-K dated March 1, 1999 and Form 8-K/A dated May
7, 1999 to report its merger with Netect Ltd.


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<PAGE>   20



                                   SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

     BINDVIEW DEVELOPMENT CORPORATION

                                    By:      /s/ ERIC J. PULASKI
                                       ----------------------------------------
                                                  Eric J. Pulaski
                                         President and Chief Executive Officer

July 28, 1999

                                    By:      /s/ SCOTT R. PLANTOWSKY
                                       ----------------------------------------
                                                 Scott R. Plantowsky
                                             Vice-President and Chief
                                               Financial Officer

July 28, 1999


                                      20

<PAGE>   21


                               INDEX TO EXHIBITS

EXHIBIT
  NO.                               DESCRIPTION
-------                             -----------
10.1   -- Employment Agreement between BindView Development and Marc Caminetsky

10.2   -- Employment Agreement between BindView Development and Paul Cormier

 11    -- Statement Regarding Computation of Earnings (Loss) Per Common Share

 27    -- Financial Data Schedule