<PAGE>   1
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                       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 JUNE 30, 1998

 [ ]     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.)


     3355 WEST ALABAMA, SUITE 1200
           HOUSTON, TX 77098                               77098
(Address of principal executive offices)                 (Zip code)


                                 (713) 843-1799
              (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 [ ]  No [X]

The number of shares of the registrant's Common Stock, no par value, outstanding
as of June 30, 1998, was 13,929,902.

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<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,
                                                                         1998 (UNAUDITED)      1997 (AUDITED)
                                                                         ----------------      --------------
<S>                                                                          <C>                   <C>     
Current assets:
     Cash and cash equivalents                                               $ 12,749              $  7,203
     Accounts receivables, net                                                  3,212                 4,729
     Other current assets                                                         244                    --
     Deferred tax asset                                                         3,250                 3,150
                                                                             --------              --------
          Total current assets                                                 19,455                15,082
     Property and equipment, less accumulated depreciation                      1,991                 1,370
     Other assets                                                                  59                    57
                                                                             --------              --------
          Total assets                                                       $ 21,505              $ 16,509
                                                                             ========              ========
                      LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
     Accounts payable                                                        $    815              $    785
     Accrued liabilities                                                          783                   831
     Accrued compensation                                                         634                   614
     Deferred revenue                                                           3,637                 2,029
                                                                             --------              --------
          Total current liabilities                                             5,869                 4,259
                                                                             --------              --------
Shareholders' equity:
     Convertible preferred stock, $0.01 par value, 20,000 shares                   25                    25
          authorized, 2,528 and 2,528 shares issued and outstanding,
          respectively, liquidation preference of $18,002
     Common stock, no par value, 100,000 shares authorized,                         1                     1
          13,930 and 13,198 shares issued and outstanding, respectively
     Additional paid-in capital                                                34,462                31,728
     Common stock warrant to purchase 438 shares                                   --                   550
     Retained earnings (accumulated deficit)                                   (4,835)               (6,037)
     Treasury stock, 4,922 shares                                             (14,017)              (14,017)
                                                                             --------              --------
       Total shareholders' equity                                              15,636                12,250
                                                                             --------              --------
          Total liabilities and shareholders' equity                         $ 21,505              $ 16,509
                                                                             ========              ========
</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,
                                         ---------------------        ---------------------
                                          1998          1997           1998          1997
                                         -------       -------        -------       -------
<S>                                      <C>           <C>            <C>           <C>
Revenues:
   Licenses                              $ 6,219       $ 3,308        $10,603       $ 6,258
   Services                                1,774           604          3,230         1,077
                                         -------       -------        -------       -------
      Total revenues                       7,993         3,912         13,833         7,335
                                         -------       -------        -------       -------

Cost of revenues:
   Cost of licenses                          254           138            462           229
   Cost of services                          226           142            441           247
                                         -------       -------        -------       -------
      Total cost of revenues                 480           280            903           476
                                         -------       -------        -------       -------
Gross profit                               7,513         3,632         12,930         6,859
                                         -------       -------        -------       -------
Costs and expenses:
   Sales and Marketing                     3,733         1,827          6,441         3,196
   Research and Development                2,050           700          3,693         1,322
   General and Administrative                735           483          1,411           994
                                         -------       -------        -------       -------
Operating income                             995           622          1,385         1,347
Other income, net                            142            15            271            29
                                         -------       -------        -------       -------
Income before income tax provision         1,137           637          1,656         1,376
Provision for income tax                     332            --            454            --
                                         -------       -------        -------       -------
Net income                                   805           637          1,202         1,376
Pro forma charge in lieu of                                                                 
   income taxes                               --           223             --           482
                                         -------       -------        -------       -------
Pro forma net income                     $   805       $   414        $ 1,202       $   894
                                         =======       =======        =======       =======
Earnings per common share:
   Basic                                 $  0.10       $  0.05        $  0.14       $  0.11
   Diluted                               $  0.04       $  0.03        $  0.07       $  0.06

Shares used in computing earnings
   per common share:
   Basic                                   8,391         8,228          8,333         8,228
   Diluted                                17,902        14,439         17,581        14,555
</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,
                                                                      ---------------------
                                                                       1998          1997
                                                                      -------       -------
<S>                                                                   <C>          <C>
Cash flows from operating activities:
     Net income                                                       $ 1,202       $ 1,376
     Adjustments to reconcile net income to net cash provided
          by operating activities:
          Depreciation and amortization expenses                          414           291
          Deferred income taxes                                          (100)           --
          Changes in assets and liabilities:
               Decrease (increase) in accounts receivable               1,517          (663)
               Decrease (increase) in other assets                       (246)           45  
               Increase in accounts payable                                30           219
               Decrease in accrued liabilities                            (28)         (335) 
               Increase in deferred revenues                            1,608           232
                                                                      -------       -------
                    Net cash provided by operating activities           4,397         1,165
                                                                      -------       -------
Cash flows from investing activities:
     Purchase of property and equipment                                (1,035)         (594)
                                                                      -------       -------
                    Net cash used by investing activities              (1,035)         (594)
                                                                      -------       -------
Cash flows from financing activities:
     Proceeds from exercise of stock options                              688            --
     Proceeds from exercise of warrants                                 1,496            --
                                                                      -------       -------
                    Net cash provided by financing activities           2,184            --
                                                                      -------       -------
Net increase in cash and cash equivalents                               5,546           571
Cash and cash equivalents at beginning of period                        7,203           766
                                                                      -------       -------
Cash and cash equivalents at end of period                            $12,749       $ 1,337
                                                                      =======       =======
</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>
                                                                                              RETAINED
                                                  COMMON STOCK       ADDITIONAL   COMMON      EARNINGS                   TOTAL
                                   PREFERRED   -------------------    PAID-IN      STOCK    (ACCUMULATED   TREASURY   SHAREHOLDERS'
                                     STOCK      SHARES     AMOUNT     CAPITAL     WARRANT     DEFICIT)      STOCK        EQUITY
                                   ---------   --------   --------   ----------   -------   ------------   --------   -------------
<S>                                <C>         <C>        <C>        <C>          <C>       <C>            <C>        <C>     
Balance at December 31, 1997          $25       13,198       $ 1       $31,728     $ 550      $(6,037)     $(14,017)     $12,250

Exercise of stock options              --          295        --           384        --          --            --           384
Exercise of stock warrants             --          438        --         1,796      (550)         --            --         1,246
Tax benefit related to exercise
   of employee stock options
   and warrants                        --          --         --           554        --          --            --           554
Net income for the six months
   ended June 30, 1998                 --          --         --           --         --        1,202           --         1,202
                                      ---       ------       ---       -------     -----      -------      --------      -------
Balance at June 30, 1998              $25       13,930       $ 1       $34,462     $  --      $(4,835)     $(14,017)     $15,636
</TABLE>


           See notes to unaudited consolidated financial statements.





                                       5
<PAGE>   6
                        BINDVIEW DEVELOPMENT CORPORATION

                 NOTES TO CONDENSED CONSOLIDATED FINANCIAL DATA

                                   (UNAUDITED)
                    (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)


NOTE 1 - BASIS OF PRESENTATION

         The accompanying unaudited interim 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 the
Company's annual audited financial statements for the year ended December 31,
1997, which are included in Amendment No. 4 to the Company's Registration
Statement on Form S-1 filed with the Securities and Exchange Commission (the
"Commission") on July 23, 1998 (Reg. No. 333-52883).

         Operating results for the three and six month periods ended June 30,
1998 are not necessarily indicative of the results that may be expected for the
full year ending December 31, 1998.

NOTE 2 - DESCRIPTION OF BUSINESS

         The Company was incorporated in May 1990. Previous to 1995, the Company
was known as The LAN Support Group, Inc. The Company develops, markets and
supports a suite of systems 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 and outstanding stock options and warrants to purchase common stock.
Incremental shares of 6,211 and 9,511 in the second quarter of 1997 and 1998,
respectively, and incremental shares of 6,327 and 9,248 in the six months ended
June 30, 1997 and 1998, respectively, were used in the calculation of diluted
earnings per common share.

NOTE 4 - INCOME TAX

         For the second quarter of 1998, the Company recorded a tax provision on
the income from operations. The effective tax rate for the second quarter
differs from the federal statutory tax rate due to a research and development
credit generated by the Company. As of June 30, 1998, the Company's remaining
net operating loss carryforwards approximate $5,800 for federal tax purposes,
which may be utilized to reduce future taxable income through the year 2012.
Based on the historical earnings generated by the Company, management believes
it is likely that the tax benefits related to the net operating loss
carryforward will be realized and has, therefore, provided no valuation
allowance for the related deferred tax asset.




                                       6



<PAGE>   7

NOTE 5 - SUBSEQUENT EVENTS

INITIAL PUBLIC OFFERING

         On May 15, 1998, the Company filed a registration statement with the
Commission permitting the Company to sell 2,759 shares of its common stock to
the public, and 563 additional shares to cover over-allotments. The registration
statement also permitted certain stockholders of the Company to sell 991 shares
to the public. The registration statement became effective on July 23, 1998.
With the exercise of the over-allotment, the initial public offering resulted in
proceeds to the Company of approximately $29,914, net of approximately
$3,300 in underwriting fees and offering expenses. The Company received no
proceeds from the sale of shares by selling stockholders in the initial public
offering.

EXERCISE OF WARRANTS AND CONVERSION OF PREFERRED STOCK

         On July 20, 1998, warrants to purchase 750 shares common stock at $4.00
per share were exercised. Pursuant to the initial public offering that became
effective on July 23, 1998, the Company's preferred stock automatically
converted into 6,320 shares of common stock.


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, but are not limited to, those discussed in the "Risk
Factors" set forth in the Company's Registration Statement on Form S-1 (Reg. No.
333-52883). The following discussion should be read in conjunction with the
discussion under "Management's Discussion and Analysis of Financial Condition
and Results of Operations" and the annual financial statements included in the
Company's Registration Statement on Form S-1 and the condensed consolidated
interim financial statements and the accompanying notes. 

RESULTS OF OPERATIONS

         The following table sets forth, for the periods indicated, the
percentage of selected items in the Condensed Consolidated Statement of Income
to total revenues:




                                       7
<PAGE>   8

<TABLE>
<CAPTION>

                                                     QUARTER                     SIX MONTHS
                                                  ENDED JUNE 30,                ENDED JUNE 30,
                                             -------------------------     -------------------------
                                                1998           1997           1998           1997
                                             ----------     ----------     ----------     ----------
                                                           (percent of total net revenues)

<S>                                          <C>            <C>            <C>            <C>
Revenues:
     Licenses                                      77.2           84.6           76.7           85.3
     Services                                      22.2           15.4           23.3           14.7
                                             ----------     ----------     ----------     ----------
          Total revenues                          100.0          100.0          100.0          100.0
                                             ----------     ----------     ----------     ----------

Cost of revenues:
     Cost of licenses                               3.2            3.5            3.3            3.1
     Cost of services                               2.8            3.6            3.2            3.4
                                             ----------     ----------     ----------     ----------
          Total cost of revenues                    6.0            7.2            6.5            6.5
                                             ----------     ----------     ----------     ----------
Gross profit                                       94.0           92.8           93.5           93.5
                                             ----------     ----------     ----------     ----------

Costs and expenses
     Sales and Marketing                           46.7           46.7           46.6           43.6
     Research and Development                      25.6           17.9           26.7           18.0
     General and Administrative                     9.2           12.3           10.2           13.6
                                             ----------     ----------     ----------     ----------
Operating income                                   12.4           15.9           10.0           18.4
Other income,net                                    1.8            0.4            2.0            0.4
                                             ----------     ----------     ----------     ----------
Income before income tax provision                 14.2           16.3           12.0           18.8
Provision for income tax                            4.2             --            3.3             --
                                             ----------     ----------     ----------     ----------
Net income                                         10.1           16.3            8.7           18.8
Pro forma charge in lieu of income taxes             --            5.7             --            6.6
                                             ----------     ----------     ----------     ----------
Pro forma net income                               10.1           10.6            8.7           12.2
                                             ==========     ==========     ==========     ==========
</TABLE>

REVENUES

         The Company's revenues are derived from the sale of software products
and related services including subscription contracts. The Company's revenues
increased $4.1 million or 104% in the second quarter of 1998 over the comparable
quarter of the prior year and $6.5 million or 89% over the comparable six 
months of the prior year.

         The Company's license revenues increased $2.9 million or 88% in the 
second quarter of 1998 over the comparable quarter of the prior year and 
$4.3 million or 69% 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.

         The Company's service revenues increased $1.2 million or 194% in the 
second quarter of 1998 over the comparable quarter of the prior year and $2.2
million or 200% 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 of subscription contracts by the Company's growing installed customer
base. As subscription contracts are recognized ratably over the one-year
contract term, an increase in such revenues as a percentage of total revenues
would result in greater deferred revenue recognition. This may, in turn, 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 $116,000 or 84% in the second quarter of 1998 over the comparable 
quarter of the prior year and $233,000 or 101% 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




                                       8
<PAGE>   9
costs will remain relatively consistent 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 $84,000 or 59% in the second quarter of 1998 over the comparable
quarter of the prior year and $194,000 or 79% 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 $1.9 million or 104% in the second quarter of 1998
over the comparable quarter of the prior year and $3.2 million or 102% over the
comparable six months of the prior year. Sales and marketing expenses remained
constant at 46.7% of revenues for the second quarter of 1998 and 1997 and
increased to 46.6% of revenues from 43.6% of revenues for the six months ended
June 30, 1998 and 1997, respectively. Due to the seasonal nature of revenues,
the Company anticipates that for the remainder of 1998, sales and marketing
expenses will decrease as a percentage of revenues but increase in absolute
dollars as the Company continues to invest in marketing campaigns relative to
the sales growth and increase its expansion of domestic and international sales
efforts.

         Research and development expenses consist primarily of salaries and
benefits of product development, product management and quality assurance
personnel, payments to contract programmers and expendable equipment purchases.
The Company's research and development expenses increased $1.4 million or 193%
in the second quarter of 1998 over the comparable quarter of the prior year and
$2.4 million or 179% over the comparable six months of the prior year. Research
and development expenses increased to 25.6% of revenues in the second quarter of
1998 compared to 17.9% in the corresponding period of 1997 and increased to
26.7% of revenues from 18.0% of revenues for the six months ended June 30, 1998
and 1997, respectively. The Company is committed to continuing a significant
research and development program to support current operations and meet the
future demands of product introductions and enhancements. Accordingly, the
Company anticipates it will continue to devote substantial resources to product
research and development for the foreseeable future, and research and
development expenses will increase in absolute dollars.

         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 $252,000 or 52% in the second quarter of 1998 over the
comparable quarter of the prior year and $417,000 or 42% over the comparable six
months of the prior year. General and administrative expenses declined to 9.2%
of revenues in the second quarter of 1998 compared to 12.3% in the corresponding
period of 1997 and declined to 10.2% of revenues from 13.6% of revenues for the
six months ended June 30, 1998 and 1997, respectively. This decline in general
and administrative expenses as a percentage of revenue is a result of the
Company's ongoing efforts to manage operating expenses. The Company expects that
general and administrative expenses may decrease as a percentage of total
revenue, but will increase in absolute dollars due to increased costs related to
being a public company.

OTHER INCOME, NET

         The Company had other income of $142,000 in the second quarter of 1998
compared to $15,000 in the corresponding period of 1997. This increase is 
primarily due to an increase in interest income related to higher cash and 
cash equivalent balances.





                                       9
<PAGE>   10
PROVISION FOR INCOME TAXES

         The Company is currently generating a research and development credit
on its federal income tax provision. As a result of this credit, the Company's
effective tax rate for the second quarter of 1998 is 28%. If the Company is
unable to receive this credit in subsequent quarters, the effective tax rate
could rise to 35%.

LIQUIDITY AND CAPITAL RESOURCES

         The Company's working capital increased to $13.3 million at June 30,
1998 from $10.8 million at December 31, 1997. The Company's cash and cash
equivalent balance increased to $12.7 million at June 30, 1998 from $7.2 million
at December 31, 1997 due primarily to positive cash flow from operating
activities and the exercise of stock options and warrants.

         The Company believes that the net proceeds of its initial public
offering, together with existing cash and cash equivalents, 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 is currently in the process of assessing its compliance
with Year 2000 issues. At this time, the Company is not aware of any material
operational issues or costs associated with Year 2000 compliance of its own
products. The Company does not expect to incur significant costs to make its
products or internal information systems Year 2000 compliant. Based upon the
Company's assessment of its other critical components and processes, including
relationships with vendors, suppliers, customers and banks, the Company does not
believe that a material uncertainty exists that would significantly affect its
business or results of operations.

         The Company currently intends to use the net proceeds of its initial
public offering 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 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 be invested in government securities and other short-term,
investment-grade, interest-bearing instruments.


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         Not applicable.




                                       10


<PAGE>   11

                           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.

CAUTIONARY STATEMENTS

         OPERATING RESULTS SUBJECT TO SIGNIFICANT FLUCTUATIONS; SEASONALITY. The
Company's quarterly revenues, expenses and operating results have in the past
varied and in the future will continue to vary significantly due to a variety of
factors, such as demand for the Company's products, the size and timing of
significant orders and their fulfillment, the length of the sales cycle for
larger orders, the number, timing and significance of product enhancements and
new product announcements by the Company and its competitors, changes in pricing
policies by the Company or its competitors, customer order deferrals in
anticipation of enhancements or new products offered by the Company or its
competitors or in anticipation of changes or delays in network operating system
("NOS") platforms and technologies, the ability of the Company to develop,
introduce and market new and enhanced versions of its products on a timely
basis, changes in the Company's level of operating expenses, budgeting cycles of
its customers, product life cycles, undetected software errors and other product
quality problems, the Company's ability to attract and retain qualified
personnel, changes in the Company's sales incentive plans and staffing of sales
territories, changes in the mix of products and services sold, changes in the
mix of domestic and international revenues, the level of international
expansion, changes in the mix of channels through which the Company's products
are offered, the impact of industry consolidation, the Company's ability to
control costs and general domestic and international economic and political
conditions. The Company operates with virtually no order backlog because its
software products are shipped shortly after orders are received, which makes
product revenues in any quarter substantially dependent on orders booked
throughout that quarter. A disproportionate amount of the Company's sales are
booked in the last few weeks or days of each quarter as a result of customer
buying patterns. The Company believes this pattern will continue. Moreover, the
Company's expense levels are based to a significant extent on the Company's
expectations of future revenues and therefore are relatively fixed in the short
term. If revenue levels are below expectations, operating results are likely to
be adversely and disproportionately affected because only a small portion of the
Company's expenses vary with its revenues.

         The Company's quarterly operating results are subject to certain
seasonal fluctuations, largely due to customer buying patterns. Historically,
the Company's revenues have tended to be strongest in the fourth quarter of the
year and to decrease in the first quarter of the following year. The Company
believes this seasonality is due to the calendar year budgeting cycles of many
of its customers and to compensation polices tending to compensate sales
personnel for achieving annual revenue quotas. In future periods, the Company
expects 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, the Company provided telephone support free
of charge and sold product upgrades separately or through subscription
contracts. The Company now requires its customers to purchase a subscription
policy in order to receive product upgrades and technical support. Unlike
software license revenues that are generally recognized




                                       11





<PAGE>   12

upon shipment of the product, the Company recognizes revenues from the sale of
subscription contracts ratably over the life of the contract term. As a result,
to the extent that the Company derives a larger percentage of its revenues from
the sale of subscription contracts, the Company will experience an increase in
deferred revenue that is likely to result in decreases in operating margins that
could have an adverse effect on the Company's business operating results and
financial condition.

         Based upon all of the factors described above, the Company believes
that its quarterly revenues, expenses and operating results are likely to vary
significantly in the future, that period-to-period comparisons of its operating
results are not necessarily meaningful and that, in any event, such comparisons
should not be relied upon as indications of future performance. The Company has
limited ability to forecast future revenues, and it is likely that in some
future quarter the Company's operating results will be below the expectations of
public market analysts and investors. In the event operating results are below
expectations, or in the event adverse conditions prevail or are perceived to
prevail generally or with respect to the Company's business, the price of the
Company's Common Stock would likely be adversely affected.

         LIMITED OPERATING HISTORY; FUTURE OPERATING RESULTS UNCERTAIN. Although
the Company was founded in 1990 and began shipping its first products in 1991,
the Company has derived substantially all of its revenues since 1995 from sales
of its BindView NCS product line released in 1993 and its BindView EMS product
line, which replaced the BindView NCS product line in 1996. The Company
therefore has a limited history of operating results based on its primary
products and, accordingly, the Company's prospects should be viewed in light of
the risks and uncertainties inherent to a software company in the early stages
of development, particularly in the highly competitive and rapidly evolving
systems management software market. To compete in this market, the Company
believes that it will be necessary to devote substantial resources to expanding
its sales and marketing organization and to continued product development. As a
result, the Company will need to recognize significant quarterly revenues to
maintain profitability. Although the Company's revenues have increased in recent
years, and revenues for recent quarters have exceeded revenues for the same
quarter for the prior year, there can be no assurance that the Company's
revenues will grow in future periods, that they will grow at past rates or that
the Company will remain profitable on a quarterly or annual basis in the future.

         SIGNIFICANT COMPETITION. The market in which the Company competes is
intensely competitive and characterized by rapidly changing technology and
evolving standards. Companies offering competitive products vary in the scope
and breadth of the products and services offered and include: (i) providers of
security analysis and audit products, such as Axent Technologies, Inc. and
Security Dynamics Technologies, Inc.; (ii) providers of standalone inventory and
asset management products such as Tally Systems Corp.; (iii) providers of LAN
desktop management suites, such as Intel Corporation, Hewlett-Packard Company
and Microsoft Corporation; and (iv) providers of Year 2000 assessment products
such as Network Associates, Inc. In addition, the native tools provided by
Novell, Inc. and third-party tools provided by certain vendors, such as Computer
Associates, Inc. and other companies, may compete with certain management
features of the Company's products. The Company has experienced, and expects to
continue to experience, increased competition from current and potential
competitors, many of whom have significantly greater financial, technical,
marketing and other resources than the Company. Such competitors may be able to
respond more quickly to new or emerging technologies and changes in customer
requirements or devote greater resources to the development, promotion and sale
of their products than the Company. Also, certain current and potential
competitors, including such enterprise management companies as IBM/Tivoli and
Computer Associates, Inc., may have greater name recognition or more extensive
customer bases that could be leveraged. The Company expects additional
competition as other established and emerging companies enter into the network
management software market and new products and technologies are introduced.
Increased competition could result in price reductions, fewer customer orders,
reduced gross margins, longer sales cycles and loss of market share, any of
which would materially adversely affect the Company's business, operating
results and financial condition.

         In addition, vendors of operating system software, particularly
Microsoft and Novell, may in the future enhance their products to include
functionality that is currently provided by the Company's products. The
widespread inclusion of the functionality of the Company's software as standard
features of operating system software could render the Company's products
obsolete and unmarketable, particularly if the quality of such functionality
were comparable to that of the Company's products. Even if the functionality
provided as standard features by operating system software is more limited




                                       12
<PAGE>   13

than that of the Company's software, there can be no assurance that a
significant number of customers would not elect to accept more limited
functionality in lieu of purchasing additional software.

         Current and potential competitors may make strategic acquisitions or
establish cooperative relationships among themselves or with third parties,
thereby increasing their ability to address the needs of the Company's current
or prospective customers. Accordingly, it is possible that new competitors or
alliances among current and new competitors may emerge and rapidly gain
significant market share. Such competition could materially adversely affect the
Company's ability to obtain new licenses or to obtain maintenance and support
renewals for existing licenses on terms favorable to the Company. There can be
no assurance that the Company will be able to compete successfully against
current and future competitors, and the failure to do so would materially
adversely affect the Company's business, operating results and financial
condition.

         RAPID TECHNOLOGICAL CHANGE AND NEW PRODUCTS. The market for the
Company's 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. The introduction of
products embodying new technologies and the emergence of new industry standards
could render existing products obsolete and unmarketable. The Company relies
heavily on its relationships with Microsoft and Novell and attempts to
coordinate its product offerings with the future releases of operating systems
by such vendors. The Company may or may not be made aware of such feature
enhancements prior to their release and, therefore, may not be able to introduce
products on a timely basis that capitalize on such operating system releases and
feature enhancements. As a result of the complexities inherent in client/server
computing environments, the life cycles of the Company's software products are
difficult to estimate and new products and product enhancements can require long
development and testing periods and are dependent on the Company's ability to
hire and retain increasingly scarce and technically competent personnel. As a
result, significant delays in the general availability of such new releases or
significant problems in the installation or implementation of such new releases
could have a material adverse effect on the Company's business, operating
results and financial condition. The Company has, on occasion, experienced
delays in the scheduled introduction of new and enhanced products and there can
be no assurance that such delays will not be experienced in the future. As a
result, the Company's future success will depend, in part, upon its ability to
continue to enhance existing products and develop and introduce in a timely
manner new products to keep pace with technological change and evolving industry
standards, satisfy customer requirements and achieve market acceptance. There
can be no assurance that the Company will successfully identify new product
opportunities and develop and bring new products to market in a timely and
cost-effective manner, or that products, capabilities or technologies developed
by others will not render the Company's products or technologies obsolete or
noncompetitive or shorten the life cycles of the Company's products.

         DEPENDENCE ON CONTINUED GROWTH OF THE MARKET FOR WINDOWS NT AND NOVELL
NETWARE OPERATING SYSTEMS. To date, all of the Company's revenues have been
dependent upon Microsoft's Windows NT and Novell's NetWare operating systems.
Although demand for Windows NT and Novell NetWare operating systems has grown in
recent years with the proliferation of distributed computing, this market is
still emerging and there can be no assurance that it will continue to grow or
that, even if the market does grow, organizations will continue to adopt the
Company's products. The rate of acceptance of the Company's products is
dependent upon the increasing complexity of Windows NT and NetWare operating
systems and the lack of effective tools to simplify system administration and
security management for these environments. There can be no assurance that the
market for the Company's products will continue to develop or that the Company's
products will be widely accepted. Additionally, there can be no assurance that
the market for system administration and security management software generally
will continue to grow. If the markets for the Company's products fail to develop
or develop more slowly than the Company currently anticipates, the Company's
business, operating results and financial condition would be materially
adversely affected. The percentages of the Company's revenues attributable to
licenses of its software operating on particular platforms are subject to change
from time to time due to a number of factors outside the Company's control, such
as changing market acceptance and penetration of the various operating system
platforms supported by the Company 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 the Company's revenues to
date have been attributable to the sale of its NOSadmin and NETinventory
products, and these products are currently expected to account for substantially
all of the Company's revenues for the foreseeable future. The Company's future
operating results are dependent upon continued




                                       13


<PAGE>   14

market acceptance of its NOSadmin and NETinventory products and enhancements to
these products, as well as the continued development of additional snap-in
modules to its Enterprise Console product. Consequently, a decline in the demand
for, or market acceptance of, the Company's NOSadmin and NETinventory products
as a result of competition, technological change or other factors, would have a
material adverse effect on the Company's business, operating results and
financial condition. Although the Company currently has plans to broaden its
product line, there can be no assurance that such product concentration will be
reduced.

         RISKS ASSOCIATED WITH LENGTH OF SALES CYCLE. The Company has
traditionally focused sales of its products to the workgroups and divisions of a
customer, resulting in a sales cycle ranging between three and six months.
Recently, the Company has focused more of its selling effort on products for the
customer's entire enterprise, since such sales represent a larger revenue
opportunity. However, the sales cycle for these enterprise-wide sales typically
ranges between six and twelve months, which can be more than twice as long as
the sales cycle for smaller scale implementations. Because of the costs
involved, customers of enterprise-wide sales generally commit significant
resources to an evaluation of available network management software and require
the Company to expend substantial time, effort and money educating them about
the value of the Company's products and services. Enterprise-wide sales of the
Company's software products require an extensive sales effort throughout a
customer's organization because decisions to license and deploy such software
generally involve the evaluation of the software by a significant number of
customer personnel in various functional and geographic areas, each often having
specific and conflicting requirements. A variety of factors, including factors
over which the Company has little or no control, may cause potential customers
to favor competing products or to delay or forego a purchase. As a result of the
length of the sales cycle for larger, enterprise-wide sales of its products and
services, the Company has a limited ability to forecast the timing and amount of
specific sales. The delay or failure to complete one or more large,
enterprise-wide sales in a particular quarter or calendar year could have a
materially adverse effect on the Company's business, operating results and
financial condition and could cause the Company's operating results to vary
significantly from quarter to quarter. See "Operating Results Subject to
Significant Fluctuations; Seasonality", above.

         MANAGEMENT OF A RAPIDLY CHANGING BUSINESS. The Company has recently
experienced a period of significant expansion that has placed significant
demands upon its management, systems and resources. This expansion of the
Company's business has placed, and any future expansion is expected to continue
to place, a significant strain on the Company's management and operations,
including its sales, customer support, research and development, finance and
administrative operations. The Company is in the process of upgrading its
internal financial, reporting and sales contact management systems to enhance
the Company's ability to obtain, analyze and manage information and sales
contacts derived from its domestic and international operations. There can be no
assurance, however, that the Company's existing or future controls, systems or
procedures will be adequate to support the Company's operations. The Company is
also considering moving to new headquarters facilities in 1998, which can be a
disruptive, time consuming and expensive process. The Company's ability to
manage its future growth, if any, will require the Company to continually
improve its financial and management controls, reporting systems and procedures
on a timely basis, implement new systems as necessary, expand, train and manage
its employee workforce and recruit qualified management personnel. There can be
no assurance that the Company's controls, systems, procedures or management will
be adequate to support the Company's operations. Further, the implementation of
such controls, systems or procedures could entail substantial expense and
require the time and attention of key management personnel, either of which
could have a materially adverse effect on the Company's business, operating
results or financial condition. The rapid expansion of the Company's business
may result in the Company being subject to a variety of local, state, federal
and international taxes. Although the Company believes it is currently in
compliance with the rules and regulations of such tax jurisdictions, due to the
complexity inherent in such tax laws, any discovered current or future tax
liabilities could have a materially adverse effect on the Company's business,
operating results and financial condition. The founders of the Company,
including the Company's Chief Executive Officer, have had no prior experience
managing a large or public company, and have only limited experience managing a
rapidly growing business organization. The failure of the Company's management
to respond effectively to changing business conditions would have a material
adverse effect upon the Company's business, operating results and financial
condition.

         DEPENDENCE ON KEY PERSONNEL; NEED FOR ADDITIONAL QUALIFIED PERSONNEL.
The Company's success depends to a significant extent upon the efforts of Eric
J. Pulaski, the Company's President and Chief Executive Officer, who is not
bound by an employment contract, and other key management, sales and marketing,
technical support and research and



                                       14
<PAGE>   15

development personnel. The loss of key management or technical personnel could
adversely affect the Company. The Company does not maintain key man life
insurance policies on any of its executive officers. The Company believes that
its future success will depend in large part upon its continuing ability to
attract and retain highly skilled research and development, technical support
and sales and marketing personnel. Like other software companies, the Company
faces intense competition for such personnel and the Company has at times
experienced and continues to experience difficulty in recruiting qualified
personnel. The Company anticipates that it will need to continue to increase the
size of its research and development, direct telesales, services and support
personnel in future periods. In particular, the Company has experienced
difficulties in hiring and retaining qualified research and development
personnel. In order to support sales growth, if any, the Company will need to
increase the size of its sales and marketing staff, increase the staff's
productivity and, in selected markets, develop indirect distribution channels.
There can be no assurance that the Company will be able to successfully leverage
its sales force or that the Company's sales and marketing organization will
successfully compete against the more extensive and better funded sales and
marketing organizations of many of the Company's current and future competitors.
There can be no assurance that the Company will be successful in attracting,
assimilating and retaining additional qualified personnel in the future. The
loss of the services of one or more of the Company's key individuals or the
failure to attract and retain additional qualified personnel, could have a
material adverse effect on the Company's business, operating results and
financial condition.

         RISKS ASSOCIATED WITH INTERNATIONAL SALES AND OPERATIONS. The Company 
only recently opened its first direct telesales and service office outside the
United States. Historically, the Company has generated revenues outside North
America through indirect channels, including VARs and other distributors. The
Company is in the early stages of developing its indirect distribution channels
in certain markets outside the United States. There can be no assurance that the
Company will be able to attract third parties that will be able to market the
Company's products effectively and will be qualified to provide timely and
cost-effective customer support and service. The Company's arrangements with its
resellers generally provide that such resellers may carry competing product
offerings. There can be no assurance that any distributor or reseller will
continue to represent the Company's products. The inability to recruit, or the
loss of, important sales personnel, distributors or resellers could materially
adversely affect the Company's business, operating results and financial
condition.

         The Company anticipates that for the foreseeable future an increasing
percentage of its revenues may be derived from sources outside North America as
the Company seeks to expand its sales and support operations internationally. In
January 1998, the Company established its first international direct telesales
office and is still adapting the telesales model utilized by the Company in
North America to local conditions. In order to successfully expand international
sales, the Company must establish additional international direct telesales
offices, expand the management and support organizations for its international
sales channel, hire additional personnel, customize its products for local
markets, recruit additional international resellers where appropriate and expand
the use of its direct telesales model. There are currently only a limited number
of companies that have established a direct telesales model in countries outside
the United States. In the event the Company is unable to establish and generate
increased sales through a direct telesales model, it will incur higher personnel
costs without corresponding increases in revenue, resulting in lower operating
margins for its international operations. In addition, the differing employment
policies of countries outside the United States potentially reduce the Company's
flexibility in managing headcount and, in turn, managing personnel-related
expenses. To the extent that the Company is unable to address the risks
associated with these international sales in a timely and cost-effective manner,
the Company's sales growth internationally, if any, will be limited, operating
margins could be reduced by increases in personnel-related expenses without
corresponding increases in revenues, and the Company's business, operating
results and financial condition could be materially adversely affected. Even if
the Company is able to successfully expand its international operations, there
can be no assurance that the Company will be able to maintain or increase
international market demand for its products.

         The Company's international operations are generally subject to a
number of risks, including costs of customizing products for foreign countries,
protectionist laws and business practices favoring local competition, dependence
on local vendors, compliance with multiple, conflicting and changing
governmental laws and regulations, longer sales cycles, greater difficulty or
delay in accounts receivable collection, import and export restrictions and
tariffs, difficulties in staffing and managing foreign operations, foreign
currency exchange rate fluctuations, multiple and



                                       15


<PAGE>   16

conflicting tax laws and regulations and political and economic instability. To
date, substantially all of the Company's revenues and costs have been
denominated in U.S. dollars. However, the Company believes that in the future,
an increasing portion of the Company's revenues and costs will be denominated in
foreign currencies. There can be no assurance that future fluctuations in the
value of foreign currencies will not have a material adverse effect on the
Company's business, operating results and financial condition. Management
currently does not have an active foreign exchange hedging program. As a result
the Company's foreign operations are subject to the risks of future foreign
currency fluctuations, to the extent that they are not hedged by obligations
denominated in local currencies. See "Operating Results Subject to Significant
Fluctuations; Seasonality".

         LIMITED PROTECTION OF PROPRIETARY TECHNOLOGY; RISKS OF INFRINGEMENT.
The Company relies primarily on a combination of copyright, trademark and trade
secret laws, confidentiality procedures and contractual provisions to protect
its proprietary rights. However, the Company believes that such measures afford
only limited protection. There can be no assurance that others will not develop
technologies that are similar or superior to the Company's technology or design
around the copyrights and trade secrets owned by the Company. The Company
licenses its software products primarily under "shrink wrap" licenses (i.e.,
licenses included as part of the product packaging). Shrink wrap licenses are
not negotiated with or signed by individual licensees and purport to take effect
upon the opening of the product package. In cases where the Company negotiates a
specific license with a customer, the license agreement contains provisions
purporting to protect the Company's proprietary rights. The Company believes,
however, that these measures afford only limited protection. Despite the
Company's efforts to protect its proprietary rights, unauthorized parties may
attempt to copy aspects of the Company's products or to obtain and use
information that the Company regards as proprietary. Policing unauthorized use
of the Company's products is difficult and the Company is unable to determine
the extent to which its products may be copied by unauthorized parties. In
addition, the laws of some foreign countries do not protect the Company's
proprietary rights as fully as do the laws of the United States. There can be no
assurance that the Company's means of protecting its proprietary rights will be
adequate or that competition will not independently develop similar or superior
technology.

         The Company is not aware that it is infringing upon any proprietary
rights of third parties. There can be no assurance, however, that third parties
will not claim infringement by the Company of their intellectual property
rights. The Company expects that software product developers increasingly will
be subject to infringement claims as the number of products and competitors in
the Company's industry segment grows and the functionality of products in
different industry segments overlaps. Any such claims, with or without merit,
could be time consuming to defend, result in costly litigation, divert
management's attention and resources, cause product shipment delays or require
the Company to enter into royalty or licensing agreements. Such royalty or
licensing agreements, if required, may not be available on terms acceptable to
the Company, if at all. In the event of a successful claim of product
infringement against the Company and failure or inability of the Company to
either license the infringed or similar technology or develop alternative
technology on a timely basis, the Company's business, operating results and
financial condition could be materially adversely affected.

         RISKS ASSOCIATED WITH POTENTIAL ACQUISITIONS. Historically, the Company
has not engaged in a substantial number of acquisitions. However, in order to
remain competitive in the future, the Company may find it necessary to acquire
businesses, products and technologies that could complement or expand the
Company's business. In the event that the Company identifies an appropriate
acquisition candidate, there can be no assurance that the Company would be able
to successfully negotiate the terms of any such acquisition, finance such
acquisition or integrate such acquired business, products or technologies into
the Company's existing business and operations. Furthermore, the negotiation of
potential acquisitions as well as the integration of an acquired business could
cause diversions of management time and resources. There can be no assurance
that a given acquisition, whether or not consummated, would not materially
adversely affect the Company's business, operating results and financial
condition. If the Company proceeds with one or more significant acquisitions in
which the consideration consists of cash, the Company may be required to use a
substantial portion of the Company's available cash (including proceeds of this
offering) to consummate the acquisitions. If the Company consummates one or more
significant acquisitions in which the consideration consists of stock,
shareholders of the Company could suffer a significant dilution of their
interests in the Company.

         RISK OF UNDETECTED SOFTWARE ERRORS. Software products as complex as
those offered by the Company may contain certain undetected errors, particularly
when first introduced or when new versions or enhancements are released.



                                       16
<PAGE>   17

The Company has in the past discovered software errors in certain of its new
products after their introduction. There can be no assurance that, despite
testing by the Company, such errors will not be found in current versions, new
versions or enhancements of its products after commencement of commercial
shipments, resulting in adverse publicity, loss of revenues, delay in market
acceptance or claims by customers brought against the Company, all of which
could have a material adverse effect on the Company's business, operating
results and financial condition.

         YEAR 2000 COMPLIANCE. Many currently installed computer systems and
software products were not built to cope with issues that will result from
accepting and processing dates beyond December 31, 1999. This problem stems from
the fact that many software products, computer systems, and other equipment with
embedded hardware chips that use dates, have stored the year component of such
dates as a two-digit number relative to the year 1900 rather than as a
four-digit number (e.g., storing the year as "98" rather than "1998"). On
January 1, 2000, systems using only a two-digit year may interpret the year "00"
as "1900" rather than "2000" and continue to misinterpret subsequent years as
well. In addition, the clocks of many systems that automatically compute leap
years may incorrectly compute leap years beyond 1999. Many other associated
problems could also occur, including system failures or miscalculations causing
disruption of operations. As a result, in the next two years, computer systems
and/or software used by many companies may need to be upgraded to comply with
such "Year 2000" requirements. Significant uncertainty exists in the software
industry concerning the potential effects associated with such compliance.
Although the latest versions of BindView EMS are designed to be Year 2000
compliant, releases of BindView EMS before version 5.2a are not Year 2000
compliant or have not been tested for Year 2000 compliance. There can be no
assurance the Company's software products designed to be Year 2000 compliant
contain all necessary date code changes.

         The Company believes that the purchasing patterns of customers and
potential customers may be affected by Year 2000 issues in a variety of ways.
Many companies are expending significant resources to correct or patch their
current software systems for Year 2000 compliance. These expenditures may result
in reduced funds available to purchase products and services such as those
offered by the Company. Potential customers may also choose to defer purchasing
Year 2000 compliant products until they believe it is absolutely necessary, thus
resulting in depressed market sales within the industry. Conversely, Year 2000
issues may cause other companies to accelerate purchases, thereby causing an
increase in short-term demand and a consequent decrease in long-term demand for
software products. Additionally, Year 2000 issues could cause a significant
number of companies, including current customers of the Company, to reevaluate
their current software needs and, as a result, switch to other systems or
suppliers. Any of the foregoing could result in a material adverse effect on the
Company's business, operating results and financial condition.

         BindView currently uses third-party software applications, some of
which are not Year 2000 compliant. The Company is in the process of upgrading
these systems to be able to handle the transition to the Year 2000 and beyond
and plans to have these upgrades completed within the next 12 months. In
addition, the Company is not yet certain as to the extent to which the computer
software and business systems of its suppliers are Year 2000 compliant. If
systems of third parties on which the Company relies are not converted on a
timely basis, the Year 2000 issue could have a material adverse effect on the
Company's business, financial conditions or results of operations.

         PRODUCT LIABILITY. Although the Company's license agreements with its
customers typically contain provisions designed to limit the Company's exposure
to potential product liability claims, it is possible that such limitation of
liability provisions may not be effective as a result of existing or future laws
or unfavorable judicial decisions. The Company has not experienced any material
product liability claims to date. However, the sale and support of the Company's
products may entail the risks of such claims, which may be substantial in light
of the use of the Company's products in business-critical applications. In
particular, because certain products of the Company are sold to customer's with
the intent of aiding them in their attempt to resolve security management,
inventory management and Year 2000 issues, it is possible that the Company could
be exposed to product liability claims in the event such products result in
additional problems for the customer or do not perform as the customer might
expect. A successful product liability claim brought against the Company could
have a material adverse effect on the Company's business, operating results and
financial condition. Moreover, defending such a suit, regardless of its merits,
could entail substantial expense and require the time and attention of key
management personnel, either of which could have a materially adverse effect on
the Company's business, operating results and financial condition.



                                       17
<PAGE>   18

 ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits:

         The following exhibits are filed with this Quarterly Report.

         11       --       Statement Regarding Computation of Earnings Per Share
         27       --       Financial Data Schedule.

(b)      Reports on Form 8-K:

         None.




                                       18
<PAGE>   19

                                   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

August 13, 1998

                                   


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

August 13, 1998




                                       19

<PAGE>   20

                               INDEX TO EXHIBITS


<TABLE>
<CAPTION>

   Exhibit
     No.                          Description
   -------                        -----------
<S>         <C>  
     11     --  Statement Regarding Computation of Earnings Per Share 

     27     --  Financial Data Schedule.

</TABLE>




                                       20