<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
       EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 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 September 30, 1999, was 23,126,603.

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


                                       1
<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                                       SEPTEMBER 30,         DECEMBER 31,
                                                                      1999 (UNAUDITED)           1998
                                                                      ----------------        -----------
<S>                                                                      <C>                  <C>
 Current assets:
      Cash and cash equivalents                                          $   41,239           $   48,010
      Short-term investments                                                 14,627               10,187
      Accounts receivable, net                                               11,205                5,711
      Deferred tax asset                                                      4,555                3,245
      Other current assets                                                      766                1,676
                                                                         ----------           ----------
           Total current assets                                              72,392               68,829
      Property and equipment, net                                             7,397                5,342
      Purchased software and related assets, net                              1,226                1,374
      Long-term investments                                                   7,303                   --
      Other assets                                                              467                  492
                                                                         ----------           ----------
                  Total assets                                           $   88,785           $   76,037
                                                                         ==========           ==========

               LIABILITIES AND STOCKHOLDERS' EQUITY

 Current liabilities:
      Accounts payable                                                   $    1,500           $    1,954
      Accrued liabilities                                                     1,854                1,903
      Accrued compensation                                                    1,766                  984
      Deferred revenue                                                        6,744                4,994
                                                                         ----------           ----------
           Total current liabilities                                         11,864                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,
          23,127 and 21,103 shares issued and outstanding,
          respectively                                                            1                    1
      Additional paid-in capital                                             84,204               65,675
      Common stock to be issued, 175 shares                                      --                3,352
      Accumulated deficit                                                    (7,263)             (10,532)
      Cumulative other comprehensive income                                     (21)                  40
                                                                         ----------           ----------
            Total shareholders' equity                                       76,921               58,536
                                                                         ----------           ----------
                  Total liabilities and shareholders' equity             $   88,785           $   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                     NINE MONTHS
                                                 ENDED SEPTEMBER 30,           ENDED SEPTEMBER 30,
                                              -------------------------     --------------------------
                                                 1999           1998           1999            1998
                                              ----------     ----------     ----------      ----------
<S>                                           <C>            <C>            <C>             <C>
Revenues:
   Licenses                                   $   13,353     $    7,984     $   32,443      $   18,587
   Services                                        4,856          2,136         12,670           5,366
                                              ----------     ----------     ----------      ----------
      Total revenues                              18,209         10,120         45,113          23,953
                                              ----------     ----------     ----------      ----------

Cost of revenues:
   Cost of licenses                                  406            329            994             791
   Cost of services                                  573            281          1,528             722
                                              ----------     ----------     ----------      ----------
      Total cost of revenues                         979            610          2,522           1,513
                                              ----------     ----------     ----------      ----------
Gross profit                                      17,230          9,510         42,591          22,440
                                              ----------     ----------     ----------      ----------
Costs and expenses:
   Sales and Marketing                             7,321          4,994         18,885          12,300
   Research and Development                        4,517          2,658         11,917           7,333
   General and Administrative                      1,589          1,079          4,352           2,914
   Transaction and Restructuring                      --             --          2,524              --
                                              ----------     ----------     ----------      ----------
Operating income (loss)                            3,803            779          4,913            (107)
Other income, net                                    825            202          2,170             330
                                              ----------     ----------     ----------      ----------
Income before income tax provision                 4,628            981          7,083             223
Provision for income tax                           1,720            822          3,814           1,276
                                              ----------     ----------     ----------      ----------
Net income (loss)                                  2,908            159          3,269          (1,053)
Other comprehensive income, net of tax:
   Income/(loss) from foreign currency
   translation                                        23              3            (61)           (137)
                                              ----------     ----------     ----------      ----------
  Comprehensive income (loss)                 $    2,931     $      162     $    3,208      $   (1,190)
                                              ==========     ==========     ==========      ==========
Earnings (loss) per common share:
   Basic                                      $     0.13     $     0.01     $     0.15      $    (0.09)
   Diluted                                    $     0.12     $     0.01     $     0.13      $    (0.09)

Shares used in computing earnings
   per common share:
   Basic                                          23,089         18,372         22,442          12,051
   Diluted                                        25,225         23,422         24,881          12,051
</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>
                                                                              NINE MONTHS ENDED
                                                                                 SEPTEMBER 30,
                                                                          --------------------------
                                                                             1999            1998
                                                                          ----------      ----------
<S>                                                                       <C>             <C>
Cash flows from operating activities:
     Net income (loss)                                                    $    3,269      $   (1,053)
     Adjustments  to reconcile net income (loss) to net cash provided
          by operating activities:
          Depreciation and amortization expense                                2,076             750
          Loss on disposition of property and equipment                          197              --
          Increase in provision for bad debts                                    370              --
          Deferred income taxes                                                3,867            (789)
          Changes in assets and liabilities:
               Decrease (increase) in accounts receivable                     (5,864)          1,112
               Decrease (increase) in other assets                               910            (660)
               Increase (decrease) in accounts payable                          (454)            951
               Increase in accrued liabilities                                   819             341
               Increase in deferred revenues                                   1,750           2,328
                                                                          ----------      ----------
                    Net cash provided by operating activities                  6,940           2,980
                                                                          ----------      ----------

Cash flows from investing activities:
     Purchase of property and equipment                                       (4,180)         (3,200)
     Purchase of investments                                                 (61,822)             --
     Proceeds from investment maturities                                      50,079              --
     Other                                                                       (94)             63
                                                                          ----------      ----------
                    Net cash used by investing activities                    (16,017)         (3,137)
                                                                          ----------      ----------


Cash flows from financing activities:
     Proceeds from issuance of convertible debentures                             --           3,923
           and long-term debt
     Proceeds from initial public offering                                        --          30,025
     Interest accrued on convertible debentures                                   --             467
     Proceeds from exercise of stock options and warrants                      2,342           7,933
                                                                          ----------      ----------
                    Net cash provided by financing activities                  2,342          42,348

     Effect of exchange rate changes on cash                                     (36)            (70)
                                                                          ----------      ----------
Net increase (decrease) in cash and cash equivalents                          (6,771)         42,121
Cash and cash equivalents at beginning of period                              48,010           9,113
                                                                          ----------      ----------
Cash and cash equivalents at end of period                                $   41,239      $   51,234
                                                                          ==========      ==========
</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
                                                COMMON STOCK       ADDITIONAL   COMMON                      OTHER         TOTAL
                                            --------------------     PAID-IN    STOCK TO   ACCUMULATED  COMPREHENSIVE  SHAREHOLDERS'
                                             SHARES      AMOUNT      CAPITAL   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                      1,250          --       2,342          --           --           --          2,342
Tax benefit related to exercise
    of employee stock options                     --          --       5,177          --           --           --          5,177
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           --          --          --          --           --          (61)           (61)
Net income for the nine months ended
   September 30, 1999                             --          --          --          --        3,269           --          3,269
                                            --------    --------    --------    --------     --------     --------       --------

Balance at September 30, 1999                 23,127    $      1    $ 84,204    $     --     $ (7,263)    $    (21)      $ 76,921
                                            ========    ========    ========    ========     ========     ========       ========
</TABLE>

       See notes to unaudited condensed consolidated financial statements




                                       5
<PAGE>   6






                        BINDVIEW DEVELOPMENT CORPORATION
         NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

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 nine month period ended
September 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. Incremental shares of
5,050 and 2,136 in the third quarter of 1998 and 1999, respectively, and
incremental shares of 2,439 in the nine months ended September 30, 1999 were
used in the calculation of diluted earnings per common share. In the third
quarter of 1998 and 1999, options to acquire 200 and 251 shares of common stock
at a weighted average exercise price of $25.11 and $24.87, respectively, were
not included in the computation of earnings per share as the options' exercise
price is greater than the average market price of the common shares for the
period. For the nine months ended September 30, 1998 and 1999, options to
acquire 1 and 159 shares of common stock at a weighted average exercise price of
$15.61 and $25.11, respectively, were not included in the computation of
earnings per share as the options' exercise price is greater than the average
market price of the common shares for the period.


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/TRANSACTION AND RESTRUCTURING EXPENSES

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




                                       6
<PAGE>   7

Company issued 175 shares of common stock to satisfy this obligation.

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 $98 on
September 30, 1999.

At the time of the merger, management approved restructuring plans to eliminate
duplicate senior management positions and to close the Israeli operations of
Netect. The restructuring plans were based on management's best estimate of
those costs based on the information available at that time. The restructuring
expenses related to this plan include involuntary employee separation expenses
for approximately 15 former Netect employees, the costs to close Netect's
Israeli operations and other miscellaneous restructuring expenses. The
restructuring expense adjustment relates to additional costs to close Netect's
Israeli operations that exceeded management's initial estimate. The transaction
costs related to the acquisition include investment banking fees of $590,
accounting and legal expenses of $565, transfer fees of $138, and other
miscellaneous transaction expenses of $240. At September 30, 1999 there were no
remaining unpaid transaction costs on the Company's Balance Sheet. The Company
has completed most of the actions related to the restructuring plans. The
Company believes the remaining reserve is sufficient to complete the remaining
actions under the plan.

The accrued restructuring expenses and amounts charged against the provision as
of September 30, 1999, were as follows:


<TABLE>
<CAPTION>
  (in thousands)                   Beginning         Cash                        Accrued Expenses at
                                    Accrual       Expenditures    Adjustment    September 30, 1999
                                  ------------    ------------    ----------    -------------------
<S>                               <C>             <C>             <C>            <C>
Restructuring Expenses

Employee severance and
     Related costs                         575            (477)             --                     98
Israeli office closing                     119            (357)            238                     --
Other restructuring costs                   59             (59)             --                     --
                                  ------------    ------------    ------------    -------------------
TOTAL                             $        753    $       (893)   $        238    $                98
                                  ============    ============    ============    ===================
</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

For the third quarter of 1999, the Company recorded a tax provision on the
income from operations. The effective tax rate increased in the third quarter
from the second quarter due to the expiration of a research and development
credit that the Company had been generating. As the U.S. Congress did not extent
this credit, it expired on June 30, 1999. The amounts previously reported by the
Company for the three months ended September 30, 1999 in its earnings release on
October 21, 1999 and as disclosed in this Form 10-Q are based on current tax
laws and exclude any benefit of this tax credit. If Congress retroactively
reinstates this credit from July 1, 1999, the Company will include the effect of
this retroactive change in its annual and fourth quarter 1999 income statement.
If the research and development tax credit is not retroactively reinstated, the
effective tax rate of the Company for future periods will increase.

As of September 30, 1999, the Company's remaining net operating loss
carryforwards for tax purposes approximate



                                       7
<PAGE>   8

$8,800 in Israel and $3,050 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.



                                       8
<PAGE>   9





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.

The merger with Netect on March 1, 1999, has been 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               NINE MONTHS
                                           ENDED SEPTEMBER 30,     ENDED SEPTEMBER 30,
                                          --------------------    --------------------
                                            1999        1998        1999        1998
                                          --------    --------    --------    --------
                                                (PERCENT OF TOTAL NET REVENUES)
<S>                                       <C>         <C>         <C>         <C>
Revenues:
     Licenses                                 73.3        78.9        71.9        77.6
     Services                                 26.7        21.1        28.1        22.4
                                          --------    --------    --------    --------
          Total revenues                     100.0       100.0       100.0       100.0
                                          --------    --------    --------    --------

Cost of revenues:
     Cost of licenses                          2.2         3.2         2.2         3.3
     Cost of services                          3.2         2.8         3.4         3.0
                                          --------    --------    --------    --------
          Total cost of revenues               5.4         6.0         5.6         6.3
                                          --------    --------    --------    --------
Gross profit                                  94.6        94.0        94.4        93.7
                                          --------    --------    --------    --------

Costs and expenses:
     Sales and Marketing                      40.2        49.3        41.9        51.4
     Research and Development                 24.8        26.3        26.4        30.5
     General and Administrative                8.7        10.7         9.6        12.2
     Transaction and Restructuring (1)          --          --         5.6          --
                                          --------    --------    --------    --------
Operating income (loss)                       20.9         7.7        10.9        (0.4)
Other income, net                              4.5         2.0         4.8         1.3
                                          --------    --------    --------    --------
Income before income tax provision            25.4         9.7        15.7         0.9
Provision for income tax                       9.4         8.1         8.5         5.3
                                          --------    --------    --------    --------
Net income (loss)                             16.0         1.6         7.2        (4.4)
                                          ========    ========    ========    ========
</TABLE>

(1) Represents a $2,524 non-recurring, non-tax deductible charge related to
costs associated with the Netect merger and restructuring for the nine months
ended September 30, 1999.

REVENUES

The Company's revenues are derived from the sale of software products and
related services including subscription contracts. The Company's revenues
increased $8.1 million or 80% in the third quarter of 1999 over the comparable
quarter of the prior year and $21.2 million or 88% over the comparable nine
months of the prior year.

The Company's license revenues increased $5.4 million or 67% in the third
quarter of 1999 over the comparable quarter of the prior year and $13.9 million
or 75% over the comparable nine 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.



                                       9
<PAGE>   10

The Company's service revenues increased $2.7 million or 127% in the third
quarter of 1999 over the comparable quarter of the prior year and $7.3 million
or 136% over the comparable nine months of the prior year. The increase in the
Company's service revenues over these periods is a result of an increase in
purchases and renewals of subscription contracts by the Company's growing
installed customer base. Because revenues from 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.
The costs associated with these services, are recognized as they are incurred.
This may negatively impact the Company's operating margins during periods in
which the Company incurs infrastructure ramp-up costs in response to increases
in purchases and renewals of subscription contacts.

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 $77,000 or 23% in the third quarter of 1999 over the comparable
quarter of the prior year and $203,000 or 26% over the comparable nine 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 $292,000 or
104% in the third quarter of 1999 over the comparable quarter of the prior year
and $806,000 or 112% over the comparable nine 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 $2.3 million or 47% in the third quarter of 1999 over the
comparable quarter of the prior year and $6.6 million or 54% over the comparable
nine 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 40.2% of revenues in the third quarter of 1999 compared to 49.3% of revenue
in the corresponding period of 1998 and decreased to 41.9% of revenues from
51.4% of revenues for the nine months ended September 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 in 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 fourth quarter
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 $1.9 million or 70% in the
third quarter of 1999 over the comparable quarter of the prior year and $4.6
million or 63% over the comparable nine 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 24.8% of revenues in the third quarter of 1999 compared to
26.3% in the corresponding period of 1998 and decreased to 26.4% of revenues
from 30.5% of revenues for the nine months ended September 30, 1999 and 1998,
respectively. This decline in research and development expenses as a percentage
of revenue is a result of certain product lines reaching a stage in their
product



                                       10
<PAGE>   11

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 its 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
fourth quarter 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 $510,000 or 47% in the third quarter of 1999 over the comparable
quarter of the prior year and $1.4 million or 49% over the comparable nine
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 8.7% of revenues in the third
quarter of 1999 compared to 10.7% in the corresponding period of 1998 and
declined to 9.6% of revenues from 12.2% of revenues for the nine months ended
September 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 combined with the Company's revenue
growth. The Company expects that for the fourth quarter 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.

At the time of the merger, management approved restructuring plans to eliminate
duplicate senior management positions and to close the Israeli operations of
Netect. The restructuring plans were based on management's best estimate of
those costs based on the information available at that time. The restructuring
expenses related to this plan include involuntary employee separation expenses
for approximately 15 former Netect employees, the costs to close Netect's
Israeli operations and other miscellaneous restructuring expenses. The
restructuring expense adjustment relates to additional costs to close Netect's
Israeli operations that exceeded management's initial estimate. The transaction
costs related to the acquisition include investment banking fees of $590,000,
accounting and legal expenses of $565,000, transfer fees of $138,000, and other
miscellaneous transaction expenses of $240,000. At September 30, 1999 there
were no remaining unpaid transaction costs on the Company's Balance Sheet. The
Company has completed most of the actions related to the restructuring plans.
The Company believes the remaining reserve is sufficient to complete the
remaining actions under the plan.

The accrued restructuring expenses and amounts charged against the provision
as of September 30, 1999, were as follows:


<TABLE>
<CAPTION>
  (in thousands)                   Beginning         Cash                        Accrued Expenses at
                                    Accrual       Expenditures    Adjustment    September 30, 1999
                                  ------------    ------------    ----------    -------------------
<S>                               <C>             <C>             <C>            <C>
Restructuring Expenses
Employee severance and
     Related costs                         575            (477)             --                     98
Israeli office closing                     119            (357)            238                     --
Other restructuring costs                   59             (59)             --                     --
                                  ------------    ------------    ------------    -------------------
TOTAL                             $        753    $       (893)   $        238    $                98
                                  ============    ============    ============    ===================
</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.


                                       11
<PAGE>   12

OTHER INCOME, NET

The Company had other income of $825,000 in the third quarter of 1999 compared
to $202,000 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 research and development credit for federal income tax purposes that the
Company was previously generating expired on June 30, 1999. As a result of the
expiration of this credit, the Company's effective tax rate for the third
quarter of 1999 increased to 37%.

During the first quarter of 1999, the Company did not recognize a tax benefit
for certain losses generated by Netect because the Company's ability to realize
such benefits was limited by the former structure of Netect and by the Company's
plans for Netect's future operations. Also, the U.S. Congress allowed a certain
research and development federal income tax credit provision to expire on June
30, 1999, which the Company otherwise would have been able to use. These
factors, along with the non-deductibility nature of the transaction expenses
incurred in connection with the company's merger with Netect, have resulted in
the Company's effective tax rate exceeding 37% for the first quarter and the
nine months ended September 30, 1999. Although there can be no assurance that
Congress will retroactively reinstate this credit, if congress retroactively
reinstates the research and development credit, the Company expects that its
effective tax rate should stabilize near 37% for the remainder of 1999 and for
the fiscal quarters of 2000. If this credit is not retroactively reinstated, or
if the Company is unable to receive this credit in subsequent quarters, the
effective tax rate could rise beyond 39%.

LIQUIDITY AND CAPITAL RESOURCES

The Company's working capital increased to $60.5 million at September 30, 1999
from $59.0 million at December 31, 1998. The Company's cash, cash equivalent,
short-term and long-term investments balance increased to $63.2 million at
September 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 completed in 1998, 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. Possible
acquisitions of businesses, products and technologies could require the use of
substantial amounts of capital, some of which might require the issuance of
additional equity or debt securities. 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



                                       12
<PAGE>   13

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".

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 are Year
2000 compliant or will compliant in the fourth quarter of 1999. 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/NOSadmin software are
designed to be Year 2000 compliant, releases of this software before version
5.2a have not been tested for Year 2000 compliance and/or are not Year 2000
compliant. Customers of BindView EMS/NOSadmin software before version 5.2a under
subscription contracts have been provided upgrades to versions of this software
that are designed to be Year 2000 compliant. Customers that have not upgraded to
Year 2000 compliant versions of BindView EMS/NOSadmin software 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/NOSadmin software. 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 and operating
results.

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



                                       13
<PAGE>   14

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

-   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 than 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.



                                       14
<PAGE>   15



                           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
operating margins. Decreased operating margins may materially adversely



                                       15
<PAGE>   16

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 software, replaced in 1996 by BindView EMS/NOSadmin software. 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.
     -    providers of enterprise resource planning application add-ons for SAP
          security administration and vulnerability assessment, such as BMC
          Software, Insite Objects, Inc. and Envive Corp.
     -    providers of network security scanning technology, such as Network
          Associates, ISS Group, Inc. and Axent Technologies.

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.



                                       16
<PAGE>   17

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. In addition, we
have and may continue to bundled and offer discounts to our customers. Bundling
or discounting our products may result in reduced operating margins, reduced
profitability and increase the complexity of revenue recognition. 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
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, 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. Majority 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.



                                       17
<PAGE>   18

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:


     -    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



                                       18
<PAGE>   19

     -    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, 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. 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 important
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.



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<PAGE>   20

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
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 - BindView Development Corporation Omnibus Incentive Plan

    11   - Statement Regarding Computation of Loss Per Common Share

    27   - Financial Data Schedule


(b) Reports on Form 8-K:

    The Company did not file any Current Reports on Form 8-K during the
quarterly period covered by this report.



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<PAGE>   21





                                   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

November 12, 1999

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

November 12, 1999



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<PAGE>   22




                                INDEX TO EXHIBITS

<TABLE>
<CAPTION>
  EXHIBIT
     NO.                        DESCRIPTION
  -------                       -----------
<S>           <C>
    10.1      -- BindView Development Corporation Omnibus Incentive Plan

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

     27       -- Financial Data Schedule
</TABLE>




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