<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-K
(Mark One)
[X] Annual report pursuant to Section 13 or 15(d) of the Securities Exchange
    Act of 1934 for the fiscal year ended December 31, 1997 or

[_] 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...................................1-12989

                          SUNGARD(R) DATA SYSTEMS INC.
             (Exact name of registrant as specified in its charter)

                  DELAWARE                           51-0267091
          (State of incorporation)      (I.R.S. Employer Identification No.)

                 1285 DRUMMERS LANE, WAYNE, PENNSYLVANIA 19087
          (Address of principal executive offices, including zip code)

                                 (610) 341-8700
                    (Telephone number, including area code)

          Securities registered pursuant to Section 12(b) of the Act:

                    COMMON STOCK, PAR VALUE $0.01 PER SHARE

          Securities registered pursuant to Section 12(g) of the Act:

                                      NONE


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 aggregate market value of the registrant's voting stock held by non-
affiliates of the registrant as of March 16, 1998 was $3,433,753,878.(1)  There
were 102,710,449 shares of the registrant's Common Stock outstanding as of March
16, 1998.

Parts II and IV of this Form 10-K incorporate by reference certain information
from the registrant's annual report to stockholders for the fiscal year ended
December 31, 1997, and Part III of this Form 10-K incorporates by reference
certain information from the registrant's definitive proxy statement, for its
1998 annual meeting of stockholders, filed with the Securities and Exchange
Commission not later than 120 days after the end of the registrant's fiscal year
covered by this report.

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in the definitive proxy statement
incorporated by reference into Part III of this Form 10-K.  [_]


(1) This equals the number of outstanding shares of the registrant's Common
    Stock, reduced by the number of shares that may be deemed beneficially owned
    by the registrant's directors, nominees and officers, multiplied by the last
    sale price for the registrant's Common Stock reported on March 16, 1998.
    This information is provided solely for record keeping purposes of the
    Securities and Exchange Commission and shall not be construed as an
    admission that any of the registrant's directors, nominees or officers is an
    affiliate of the registrant or is the beneficial owner of any such shares.
    Any such inference is hereby disclaimed.
<PAGE>

<TABLE>
<CAPTION>

                               TABLE OF CONTENTS

                                                                PAGE
                                                                ----
                                     PART I
<S>       <C>                                                   <C>
ITEM 1.   BUSINESS............................................    1
            Overview..........................................    1
            Investment Considerations.........................    2
            Investment Support Systems........................    4
            Disaster Recovery Services........................   10
            Computer Services and Other.......................   12
            Product Development...............................   13
            Acquisitions and Offerings........................   14
            Competition.......................................   15
            Marketing.........................................   16
            Employees.........................................   16
            Proprietary Protection............................   17

ITEM 2.   PROPERTIES..........................................   17
ITEM 3.   LEGAL PROCEEDINGS...................................   18
ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.   18
ITEM 4.1  CERTAIN EXECUTIVE OFFICERS OF THE REGISTRANT........   18

</TABLE>
                                    PART II
<TABLE>
<CAPTION>

<S>        <C>                                                  <C>
ITEM 5.    MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
             STOCKHOLDER MATTERS..............................   20
ITEM 6.    SELECTED FINANCIAL DATA............................   20
ITEM 7.    MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
             CONDITION AND RESULTS OF OPERATIONS..............   20
ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA........   20
ITEM 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
             ACCOUNTING AND FINANCIAL DISCLOSURE..............   20

</TABLE>
                                    PART III
<TABLE>
<CAPTION>

<S>         <C>                                                 <C>
ITEM 10.    DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.  21
ITEM 11.    EXECUTIVE COMPENSATION.............................  21
ITEM 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
              AND MANAGEMENT...................................  21
ITEM 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.....  21

</TABLE>
                                    PART IV
<TABLE>
<CAPTION>

<S>         <C>                                                 <C>
ITEM 14.    EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND
              REPORTS ON FORM 8-K..............................  22

            SIGNATURES.........................................  23
            LIST OF EXHIBITS...................................  24

</TABLE>
<PAGE>

                                     PART I

ITEM 1.  BUSINESS

OVERVIEW

  SunGard Data Systems Inc. (the "Company") is a computer services and software
company that specializes in proprietary investment support systems,
comprehensive computer disaster recovery services and proprietary healthcare
information systems.  The Company believes that it is the only large specialized
provider of investment support systems to the financial services industry and
the pioneer and a leading provider of comprehensive computer disaster recovery
services.  The Company's business approach is to focus on market niches in which
it has opportunities to develop or acquire leading products.

  The Company seeks to maximize recurring and consulting revenues by selling
most of its services under fixed-term contracts and by emphasizing customer
support and product quality in order to establish long-term relationships with
customers.  The Company's recurring and consulting revenues accounted for
approximately 87% of the Company's total revenues during the last three years
(86% in 1997).  The Company's recurring revenues are derived primarily from
contracts for remote processing, disaster recovery and software maintenance
services, which together accounted for approximately 76% of the Company's total
revenues during the last three years (73% in 1997) (see INVESTMENT
CONSIDERATIONS - ACQUISITIONS AND RELATED EFFECT ON OPERATIONS).  Of the total
number of the Company's remote processing and disaster recovery services
contracts that were scheduled to expire during the last three years,
approximately 77% were renewed or replaced with new contracts (77% in 1997).
While there can be no assurance that the rate of contract renewals will remain
at this level, the Company believes that it will continue to renew a high
percentage of these contracts.  None of the Company's customers individually
accounted for more than two percent of the Company's revenues in 1997.

  The Company's operations are decentralized, and its management philosophy is
one of "managed entrepreneurship."  The Company's services are provided through
separate business units.  Each business is directed by its own management team
and has its own sales, marketing, product development, operations and customer
support personnel.  Overall corporate control and coordination are achieved
through centralized budgeting, financial and legal reporting, cash management
and strategic planning.  The Company believes that this approach has facilitated
more focused marketing, specialized product development, responsive customer
service and highly motivated management.  The Company's business units are
organized as follows:

  INVESTMENT SUPPORT SYSTEMS GROUP:

  SunGard Financial Systems:  Portfolio management and securities trading and
  -------------------------
accounting systems for financial institutions, banks, broker/dealers, insurance
companies, governments and corporations; general ledger accounting systems for
insurance companies.  Business units:  SunGard Brokerage Systems, SunGard
Insurance Systems, SunGard Securities Systems and Wall Street Concepts Inc.
(formerly WSC Investment Services, Inc.).

  SunGard Trading Systems:  Trading, risk management and accounting systems for
  -----------------------
derivative instruments, securities and foreign exchange for international
financial institutions, brokerage firms and corporations.  Business units:  ADS
Associates, BancWare, Front Capital Systems, Infinity, May Consulting, SunGard
Dealing Systems and SunGard Futures Systems.

  SunGard Trust and Shareholder Systems:  Trust and investment accounting,
  -------------------------------------
portfolio management and administration, securities trading, custody and
employee benefit plan systems for financial

                                       1
<PAGE>

institutions, stockbrokers and corporations; stock and bond accounting systems
for mutual funds, transfer agents and corporations; accounting systems for
nonprofit organizations.  Business units:  All Solutions, Bi-Tech Software,
Corbel, Corporate Services (BondMaster), CSS, Global Plus, Portfolio
Administration Limited, Series 7, Series 11, SunGard/Shaw Data, SunGard Asset
Management Systems, SunGard/DML, SunGard Employee Benefit Systems, SunGard
Finance SAS (Paris), SunGard Investment Products, SunGard Investment Systems,
SunGard Investment Systems SA (Geneva), SunGard Investment Administration
Services, SunGard Shareholder Systems and SunGard Trust Systems.

  DISASTER RECOVERY SERVICES GROUP:

  SunGard Recovery Services:  Comprehensive business continuity services:
  -------------------------
recovery services for mainframe computing platforms, recovery services for
midrange computing platforms including mobile and quick-ship services, work-
group recovery services, electronic vaulting services, network recovery
services; business continuity planning software and related consulting and
educational services.  Business units:  SunGard Planning Solutions and SunGard
Recovery Services.

  COMPUTER SERVICES AND OTHER:

  SunGard Computer Services:  Remote-access computer processing and outsourcing
  -------------------------
and automated mailing services.  Business units:  SunGard Computer Services and
SunGard Mailing Services.

  SunGard Healthcare Information Systems:  A variety of software information
  --------------------------------------
systems for hospitals, health maintenance organizations, health insurance
companies and workers compensation administrators. Business units: Intelus,
MACESS and Med Data.

  The Company, a Delaware corporation, was organized in 1982.  The Company's
executive offices are located at 1285 Drummers Lane, Suite 300, Wayne,
Pennsylvania 19087, and its telephone number is (610) 341-8700.

INVESTMENT CONSIDERATIONS

  Statements about the Company's expectations and all other statements in this
Report and other Company communications other than historical facts are forward-
looking statements.  Since these statements involve risks and uncertainties and
are subject to change at any time, the Company's actual results could differ
materially from expected results.  The Company derives most of its forward-
looking statements from its operating budgets and forecasts, which are based
upon many detailed assumptions.  While the Company believes that its assumptions
are reasonable, it cautions that there are inherent difficulties in predicting
certain important factors, especially the timing and magnitude of software
sales, the timing and scope of technological advances and year 2000 compliance,
the performance of recently acquired businesses, the prospects for future
acquisitions, and the overall condition of the financial services industry.
Certain of these factors are further discussed below and should be considered in
evaluating the Company's forward-looking statements and any investment in the
Company's common stock.

  ACQUISITIONS AND RELATED EFFECT ON OPERATIONS.  The Company seeks to grow both
internally and through the acquisition of complementary businesses.  The
Company's growth, in part, depends upon the availability of suitable acquisition
candidates and whether acquisitions can be completed on acceptable terms.
Competition from other acquirors and the alternative of a public equity offering
may adversely affect both the availability and terms of future acquisitions.
Further acquisitions by the Company may require the use of debt or equity
financing.  During 1997, the Company acquired 12 businesses (see ACQUISITIONS
AND OFFERINGS), including the acquisition of Infinity Financial Technology, Inc.
("Infinity"), which closed on January 2, 1998.  Infinity derives a significantly
larger portion of its revenues from software licensing fees than does the
Company.  Since there are inherent difficulties in predicting the timing and
magnitude of software sales, the potential for fluctuations in quarterly

                                       2
<PAGE>

revenues and income is expected to be higher than in the past. Moreover, there
can be no assurance that the Company will be able to successfully integrate its
recent or future acquisitions or that any acquired business will perform as
expected. Failure to successfully integrate an acquisition or poor performance
by an acquired business could adversely affect the Company's results and cause
impairment of part of the Company's goodwill and other intangible assets
recorded in purchase transactions.

  TECHNOLOGICAL CHANGES.  The Company's success, in part, depends upon continued
adaptation of its proprietary software and recovery services to new computer and
telecommunications technology on a timely and cost effective basis.  In
particular, rapid technological developments, which cannot be predicted, could
have a material adverse effect on the Company's business and prospects.

  PRODUCT DEVELOPMENT.  The Company must continually enhance and evolve its
proprietary software to keep pace with developments in the financial services
and healthcare industries.  There can be no assurance that the Company will be
able to update its software or develop new systems without experiencing
unforeseen delays or that newly developed products will be successfully marketed
and sold.

  YEAR 2000 COMPLIANCE.  The Company has initiated a comprehensive program to
evaluate and address the impact of the year 2000 on its software systems,
computer processing and disaster recovery operations (see PRODUCT DEVELOPMENT).
The Company believes, based in part upon simulation testing and product
evaluation, that it will meet its year 2000 commitments using existing product
development and support resources, without incurring significant incremental
expenses.  There can be no assurance, however, that the Company will not be
required to add personnel and accelerate purchases of third party software and
hardware upgrades in order to make the majority of its products year 2000
compliant (meaning that they can handle dates in the year 2000 and beyond).
There also can be no assurance that unanticipated year 2000 problems will not
arise, especially in connection with third party software and hardware that
interacts with the Company's products or that is otherwise used by the Company.
The failure of any of the Company's material products to be year 2000 compliant
on a timely basis may have a material adverse effect on the Company's business
and financial results.  Furthermore, the advent of the year 2000 may cause an
acceleration of software buying decisions and a shortage in the availability of
experienced programmers.  The Company recently has entered into agreements with
certain investment support systems customers which need to convert off of non-
year 2000 compliant systems, and some of these agreements require the Company to
meet significant development obligations and complete conversions prior to
December 31, 1999.  The failure of the Company to meet these commitments could
have a material adverse impact on the Company's business and financial results.

  FINANCIAL SERVICES INDUSTRY.  The Company sells most of its computer services
and software to the financial services industry and is generally dependent upon
the continued vitality of that industry.  A material adverse change in the
condition of the financial services industry, such as a significant decline in
securities or derivatives trading activities or in the number or value of
managed portfolios, could have a material adverse effect on the Company's
business and prospects.

  HEALTHCARE INFORMATION SYSTEMS BUSINESS.  Since 1995, the Company has
acquired three providers of software information systems to the healthcare
industry and anticipates acquiring additional businesses (see COMPUTER SERVICES
AND OTHER).  Although the Company has experience managing software businesses,
the Company has limited experience in the healthcare information systems market.
In addition, a number of the Company's competitors in this market have
substantially greater financial, technological and marketing resources than the
Company which may limit the Company's ability to acquire additional businesses.

                                       3
<PAGE>

INVESTMENT SUPPORT SYSTEMS

  The Company designs, markets and maintains a comprehensive family of
proprietary investment support systems for the financial services industry. The
fundamental purpose of these systems is to automate the complex accounting
calculations, record keeping and reporting associated with investment
operations.  The Company markets its investment support systems throughout the
United States, and many systems also are marketed internationally.

  The Company delivers its investment support systems as remote processing
services using the Company's computers and through software licenses for use on
customers' computers.  The Company provides investment support remote processing
services primarily from its computer centers in Birmingham (Alabama), Charlotte
North Carolina, Fairfield (New Jersey), Hopkins (Minnesota), Voorhees (New
Jersey), and Waltham (Massachusetts) (see PROPERTIES). As of December 31, 1997,
the Company had approximately 2,300 remote processing contracts in force. These
contracts generally have initial terms of one or more years and then continue
for successive, one-year or longer renewal terms, although some allow the
customer to terminate on relatively short notice.

  The Company's investment support systems business has continued to increase in
both size and scope, due primarily to acquisitions (see ACQUISITIONS AND
OFFERINGS).  During 1997, the Company continued its product unification and
enhancement efforts to provide customers with access to multiple systems and
data through common graphical interfaces and shared databases.  The Company also
continued evolving its mainframe computer systems by converting some systems to
client-server technology and by developing sophisticated personal computer and
workstation front-end products for others.  Also during 1997, the Company
continued to add multicurrency and Internet functionality to its systems and
pursue opportunities to market more of its systems internationally.

  INVESTMENT ACCOUNTING AND PORTFOLIO MANAGEMENT SYSTEMS.  The Company's
investment accounting and portfolio management systems maintain the books of
record for all types of large investment portfolios, such as those managed by
banks, mutual funds, employee retirement plans and insurance companies.  The
primary functions of these systems are to accept investment transactions, value
portfolios using transmissions of security prices received from various
worldwide sources, perform complex accounting calculations and general ledger
postings, and generate a variety of accounting, audit, tax and regulatory
reports.  In addition, some of these products are used by investment advisers
and other portfolio managers to manage large investment portfolios.  These
systems track investment activities such as purchases and sales, combine these
activities with outside market data such as security prices and quality ratings,
and provide analytical models to assist with investment strategy and management
decisions.  The Company's principal investment accounting and portfolio
management systems, some of which have multicurrency capabilities, are described
in the following table:

<TABLE>
<CAPTION>
       SYSTEM              PLATFORM       MODE OF DELIVERY            PRIMARY MARKETS
===================================================================================================
<S>                    <C>                <C>                         <C>

APS(TM)/PMS(TM)        microcomputer      software license            small banks, thrifts,
--------------------------------------------------------------------  government treasurers and
SERIES2(TM)            UNIX workstation   remote processing service   other financial institutions

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

APS2(TM)               microcomputer      software license and
                       UNIX workstation   remote processing

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

APSYS (TM)III          IBM mainframe      software license            private banks in
                       Digital                                        Luxembourg and
                                                                      Switzerland

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

GLOBAL PORTFOLIO(TM)II IBM midrange       software license and        large banks, employee
                       Digital VAX/VMS    remote processing service   saving schemes and stock
                       Digital Alpha/VMS                              brokers in France, Belgium
                                                                      and Luxembourg

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

INVEST ONE(R)          IBM mainframe      remote processing service   international banks, large
                                          and software license        bank trust departments,
                      ---------------------------------------------   mutual funds, insurance
                       UNIX workstation   software license            companies and other
                                                                      financial institutions

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

ON-LINE(TM)            Bull mainframe     remote processing service   institutional and retail
                                                                      investment advisers and
                                                                      other portfolio managers

--------------------------------------------------------------------
ON-SITE(TM)            UNIX workstation   software license
--------------------------------------------------------------------------------------------------
</TABLE>

                                       4
<PAGE>

<TABLE>
<CAPTION>
       SYSTEM              PLATFORM       MODE OF DELIVERY            PRIMARY MARKETS
===================================================================================================
<S>                    <C>                <C>                         <C>
---------------------------------------------------------------------------------------------------
PAL(TM)                IBM midrange       remote processing service   United Kingdom
                                                                      stockbroking firms and fund
                                                                      managers

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

PAR EX(R)              microcomputer      software license and        insurance companies
                                          remote processing service

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

PRISM(TM)              IBM mainframe      software license

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

SDIM(TM)               microcomputer      software license

---------------------------------------------------------------------------------------------------
</TABLE>

  During 1997, the Company completed a new module of INVEST ONE to increase the
speed of executions and add processing features to support master/feeder
portfolio structures.  In September 1997, the Company expanded its international
product offerings with the acquisition of the business of EES Finance SA, which
offers GLOBAL PORTFOLIO II, a middle- and back-office multicurrency
client/server portfolio management system sold primarily in France, Belgium and
Luxembourg (see ACQUISITIONS AND OFFERINGS).  In April 1997, the Company
acquired PORT(TM), a performance measurement product obtained through the
acquisition of Premier Solutions Ltd. (see ACQUISITIONS AND OFFERINGS).  The
Company also introduced APS2, a PC-based Windows NT enhanced portfolio
management and accounting system that will replace APS, PMS and SERIES 2. During
1997, the Company expanded its offerings to SunGard Insurance Systems customers
with the introduction of Portfolio Partners Services, which includes certain
statutory investment accounting services using PAR EX and custody services
through the Bank of New York. The Bank holds the customers' assets, and the
Company handles account record keeping and customer communications.

  The Company also provides certain general ledger accounting systems to
insurance companies and nonprofit organizations, which are markets where the
Company has opportunities to cross-sell its investment accounting systems. The
Company's general ledger accounting products include ABC(TM) (Accounting Budget
and Cost System), CDS(TM) (Cash Disbursement System) and EAS(TM) (Enterprise
Accounting System(TM)) for insurance companies, and IFAS(TM) (Interactive Fund
Accounting System) for educational institutions, state and local governments and
other nonprofit organizations. During 1997, the Company developed and released a
Windows NT (with SQL server) version of EAS.

  SECURITIES TRADING AND ACCOUNTING SYSTEMS.  The Company's securities trading
and accounting systems are used primarily by the "sell side" of the investment
business.  The users of these products generally are traders or dealers of
securities (including those trading for their own accounts) and their back-
office operations.  In addition to performing many investment accounting
functions, the Company's securities trading and accounting systems maintain
inventories of unsold securities, process trade activities and assist users in
monitoring compliance with audit limits, trading limits and government
regulations.  The Company's principal software products in this category are:

<TABLE>
<CAPTION>
   SYSTEM          PLATFORM          MODE OF DELIVERY               PRIMARY MARKETS
===========================================================================================
<S>            <C>                 <C>                            <C>
BOLT(R) 2       IBM mainframe       remote processing service      capital markets
-------------------------------------------------------------      departments
INTRADER(R)     UNIX workstation    software license               of domestic banks,
-------------------------------------------------------------      broker/dealers and other
PHASE3(R)       Tandem              remote processing              financial institutions
                                    service and
                                    software license
-------------------------------------------------------------------------------------------
</TABLE>

                                       5
<PAGE>

  During 1997, the Company began offering to Phase3 customers BROKERSELECT(R), a
product which provides secure access to Phase3 over the Internet.  Phase3
Replication Services also were offered in 1997, providing continuous replication
of data from the Phase3 database to a customer's local servers.

  DERIVATIVES TRADING AND RISK MANAGEMENT SYSTEMS.  The Company provides
software applications and software development platforms that are used to handle
most aspects of risk management, trading and operations for capital markets
globally.  The Company's trading systems are used by both the "sell side" and
the "buy side" of the investment business.  Generally, these products are used
by traders and market-makers of over-the-counter and exchange-traded derivative
instruments, securities and foreign exchange contracts and by their middle- and
back-office operations.  These systems provide trading support, risk management,
trade processing and accounting functions, and also assist users in determining
hedging strategies and monitoring compliance with capital requirements, trading
limits and government regulations.  The Company's principal software products in
this category are:

<TABLE>
<CAPTION>
        SYSTEM              PLATFORM        MODE OF DELIVERY           PRIMARY MARKETS
=============================================================================================
<S>                     <C>               <C>                   <C>

DEVON DERIVATIVES       Windows NT        software license      trading rooms and capital
  SYSTEM(TM)            UNIX workstation                        markets departments of
INFINITY 7(TM)                                                  international banks, and
INFINITY FOREX(TM)                                              trading rooms of other
INFINITY PANORAMA(TM)                                           financial institutions
OPUS(TM)
--------------------------------------------------------------
INTAS(TM)              Windows NT        software license
OPTAS(TM)              UNIX workstation
TRADENET(TM)
--------------------------------------------------------------------------------------------
GLOBAL TRADER(TM)      Windows NT        software license      small- and medium-sized
                                                               international banks and
                                                               financial institutions
--------------------------------------------------------------------------------------------
RESOURCE IQ(TM)        Windows NT        software license      large U.S. corporations
                                                               and financial institutions
--------------------------------------------------------------------------------------------
CONVERGENCE(TM)        Windows NT        software license      U.S. and international
FINANCIAL CONTROLLER(TM)                                       financial institutions
OPTION ADJUSTED VaR(TM)
--------------------------------------------------------------------------------------------
GMI SYSTEM(TM)         IBM AS 400        software license      international banks and
---------------------------------------- and                   brokerage firms active in
OCTAGON(TM)            UNIX workstation  remote processing     the futures markets for
                       Digital VAX       service               principal and customer
                       Open VMS                                business
--------------------------------------------------------------------------------------------
MICROHEDGE(R)           Windows NT        software license      options traders, trading
                                                                rooms of large banks and
                                                                financial institutions
--------------------------------------------------------------------------------------------
MATRIX(TM)              IBM AS 400        software license      capital markets
                                                                departments of
--------------------------------------------------------------  international banks and
DYNAMIX(TM)             Windows NT        software license      other financial institutions
---------------------------------------------------------------------------------------------
</TABLE>

  The Company expanded its product offerings in the derivatives trading and risk
management area of the business with three recent acquisitions. In October
1997, the Company further expanded its international presence with the
acquisition of ADS Associates, Inc. (see ACQUISITIONS AND OFFERINGS), which
sells GLOBAL TRADER, a front-office trading support system for institutional
traders in the foreign exchange, fixed income, derivative and international
money markets, and RESOURCE IQ, a

                                       6
<PAGE>

treasury information management system. The acquisition of BancWare, Inc., in
December 1997, added CONVERGENCE, FINANCIAL CONTROLLER and OPTION ADJUSTED VaR,
all asset and liability management software products that will complement the
Company's existing risk management products (see ACQUISITIONS AND OFFERINGS).

  On January 2, 1998, the Company acquired Infinity Financial Technology, Inc.
("Infinity"), a derivatives trading and risk management company, which
represented the largest acquisition in the Company's history (see ACQUISITIONS
AND OFFERINGS). The acquisition of Infinity brings to the Company a significant
product line, including INFINITY 7, an open system, client/server architecture
and family of applications that run on leading relational database management
systems and allow financial institutions and corporations to either build or use
turnkey applications to process, store, integrate and analyze their traded
instrument portfolios. When combined with the Company's existing products, the
addition of Infinity allows the Company to offer a complete range of front-to-
back office derivatives trading, risk management and operations control
functionality (see INVESTMENT CONSIDERATIONS - ACQUISITIONS AND RELATED EFFECT
ON OPERATIONS).

  In addition, during 1997, the Company added two businesses to SunGard Futures
Systems.  In January 1997, the Company acquired GMI Software, Inc., a supplier
of international financial derivatives software for global futures and
options trading, and, in December 1997, the Company acquired May Consulting
Incorporated which offers MICROHEDGE, a risk management system for exchange
traded derivatives (see ACQUISITIONS AND OFFERINGS).

  TRUST, GLOBAL CUSTODY AND SECURITIES LENDING SYSTEMS.  The Company's trust
systems automate the investment, administrative and operations areas unique to
the bank trust businesses, including cash management, management and investment
of assets, preparation of tax returns for taxable trusts, payment of trust
expenses, payment of benefits to retirees, beneficiary distributions, customer
statement production and other customer service duties.  The Company's global
custody systems automate the functions associated with the worldwide custody and
safekeeping of investment assets, such as trade settlement, investment income
collection, preparation of client statements, tax reclamation, foreign exchange,
and reconciliation of depository and sub-custodian positions.  The Company's
securities lending systems automate the functions associated with worldwide
securities lending activities.  The Company's principal trust, global custody
and securities lending systems are:

<TABLE>
<CAPTION>

     SYSTEM              PLATFORM               MODE OF DELIVERY              PRIMARY MARKETS
=====================================================================================================
<S>               <C>                      <C>                         <C>
AUTOTRUST(R)      IBM mainframe            remote processing service   small and medium size bank
-----------------------------------------                              trust departments
CHARLOTTE(R)      Windows NT
---------------------------------------------------------------------
TRUSTWARE(R)      Digital Vax              software license and
  SERIES 7        Digital Alpha            remote processing service
-----------------------------------------------------------------------------------------------------
GLOBAL PLUS(R)    IBM midrange             software license and        U.S. and international banks
                                           remote processing service   and financial institutions
-----------------------------------------------------------------------------------------------------
OMNI ES(TM)       IBM mainframe            software license and        large and medium size bank
                                           remote processing service   trust, custody and securities
                                                                       departments
-----------------------------------------------------------------------------------------------------
OMNI IC(R)        scalable, multiplatform  software license            bank global custody
                                                                       departments
-----------------------------------------------------------------------------------------------------
TRUSTWARE(R)      Digital Vax              software license and        large and medium size bank
  SERIES 11       Digital Alpha            remote processing service   trust, custody and securities
                                                                       departments and investment
                                                                       management firms
-----------------------------------------------------------------------------------------------------
WORLDLEND(TM)     IBM mainframe            software license and        U.S. and international banks,
                  Windows NT               remote processing service   broker/dealers and other
                                                                       financial institutions
-----------------------------------------------------------------------------------------------------
</TABLE>

                                       7
<PAGE>

  During 1997, the Company introduced CHARLOTTE, successor to AUTOTRUST.  The
Company offers specialized trust asset custody services to the community bank
market served by CHARLOTTE, AUTOTRUST and SERIES 7 customers and other banks and
trust companies. These services are provided under a master contract with The
Bank of New York. The Bank holds the customers' trust assets, and the Company
handles account record keeping and customer communications.

  The GLOBAL PLUS product was added to the trust and global custody product line
with the acquisition of Premier Solutions Ltd. in April 1997.  GLOBAL PLUS is a
real-time, multi-currency trust and custody accounting system used primarily by
both domestic and international financial institutions (see ACQUISITIONS AND
OFFERINGS).  Also in 1997, OMNILEND and OMNI IFS were replaced by the WORLDLEND
suite of products which provide, in addition to other features, enhanced
graphical user interfaces.

  The Company also markets EXPEDITER(R) to its trust accounting systems
customers.  EXPEDITER is a product that facilitates the automated entry of
mutual fund transactions.  Since its introduction in 1993, EXPEDITER has
continued to expand its selection of mutual funds with over 80 mutual fund
families participating in 1997.  EXPEDITER is marketed not only to users of the
Company's trust accounting systems, but also to users of the Company's
securities trading systems and participant accounting systems, and more
recently, for use with other vendors' software products.

  PARTICIPANT ACCOUNTING SYSTEMS.  The Company's participant accounting systems
automate the investment operations associated with defined contribution
retirement plans such as 401(k) plans.  These systems maintain the books of
record for each participant's share of the cash and securities in the plan,
monitor compliance with government regulations and plan restrictions, process
payments of benefits to retirees, and produce tax reports for plan sponsors and
participants.  The Company's principal participant accounting systems are:

<TABLE>
<CAPTION>

   SYSTEM         PLATFORM           MODE OF DELIVERY             PRIMARY MARKETS
=========================================================================================
<S>           <C>               <C>                         <C>
OMNIPLUS(TM)  IBM mainframe     remote processing service,  corporate, bank and other
OMNIPAY(R)                      software license and full   retirement plan managers
OMNIDBEN(TM)                    service bureau processing
              --------------------------------------------
              UNIX workstation  software license
              --------------------------------------------
              IBM AS 400        software license
              --------------------------------------------
              microcomputer     software license
------------------------------------------------------------------------------------------
QUANTECH(TM)  microcomputer     software license            retirement administration
                                                            firms and institutions
------------------------------------------------------------------------------------------
STATS(R)      microcomputer     software license            small and medium size banks
------------------------------------------------------------------------------------------
</TABLE>

  As a complement to the Company's participant accounting systems, the Company
offers AUTODOC (R), a documentation generation system for the creation of
retirement plan documents and forms and other complex documents.

  INVESTMENT REPORTING AND ANALYSIS SYSTEMS. The Company's investment reporting
and analysis systems accept data from other investment support systems or
outside sources and perform special reporting or analyses for fund managers and
customers. Some of these systems analyze the performance of portfolios, perform
other types of investment measurement and analysis, and produce regulatory
reports for retirement plan sponsors and participants. The Company's principal
software products in this category are:

                                       8
<PAGE>

<TABLE>
<CAPTION>
     SYSTEM           PLATFORM          MODE OF DELIVERY              PRIMARY MARKETS
==============================================================================================
<S>                <C>                <C>                        <C>
DATAPREP(TM)       IBM mainframe        remote processing        corporate, bank and other
GCR(TM)                                 service                  retirement plan managers
                                        and software license
--------------------------------------------------------------
XAMIN(TM)          workstation         remote processing
SUPERF4(R)         --------------       service
                   IBM mainframe        and software license
----------------------------------------------------------------------------------------------
OMNIVEST(TM)       UNIX workstation     software license         investment management
                                                                 departments of banks and
                                                                 other financial institutions
----------------------------------------------------------------------------------------------
REMIC OID(TM)      HP 3000              remote processing        brokerage firms and banks
                   microcomputer
-------------------------------------------------------------
RATES PLUS AND     HP 3000              remote processing
 HPS(TM)
----------------------------------------------------------------------------------------------
STREET NAME        HP 3000              remote processing        master limited partnerships
 PARTNERS(TM)
--------------------------------------------------------------------------------------------
</TABLE>

  During 1997, the Company completed development of XAMIN, a client server
performance measurement and analysis system for master trusts and 401(k) plans.

  The Company also expanded its product offerings through the acquisition, in
December 1997, of WSC Investment Services, Inc., which offers a suite of
products, including REMIC OID, RATES PLUS AND HPS and STREET NAME PARTNERS, that
collect, consolidate and report tax information on securities transactions on
behalf of fiduciaries for financial services firms (see ACQUISITIONS AND
OFFERINGS).  The Company has also introduced INCOME REALLOCATION(TM), a system
that processes income reallocations for 1099 reporting.

  SHAREHOLDER ACCOUNTING SYSTEMS.  The Company's shareholder accounting systems
automate the transfer agent process for stock, bond and mutual fund issues.
These systems maintain shareholder and bondholder positions, process dividend
and interest distributions, generate proxy materials, tabulate votes, and
produce tax reports and periodic shareholder statements.  The Company's
principal software products in this category are:

<TABLE>
<CAPTION>

    SYSTEM           PLATFORM          MODE OF DELIVERY             PRIMARY MARKETS
=========================================================================================
<S>              <C>               <C>                        <C>
INVESTAR(R)      IBM mainframe     remote processing          large mutual fund managers
INVESTAR ONE(TM) UNIX workstation  service                    and transfer agents
                                   and software license
-----------------------------------------------------------------------------------------
SUNSTAR(R)       IBM mainframe     remote processing          large commercial bond and
                 UNIX workstation  service                    equity transfer agents
                                   and software license
-----------------------------------------------------------------------------------------
BONDMASTER(R)    Digital Vax       remote processing          large bank, corporate and
                 Digital Alpha     service                    municipal bond transfer
                                   and software license       agents
-----------------------------------------------------------------------------------------
CSSII(R)         IBM mainframe     software license           corporate and utility
                                                              stock
                                                              transfer agents
-----------------------------------------------------------------------------------------
</TABLE>

  In August 1997 and March 1998, the Company signed multi-year software
development and services agreements for INVESTAR and INVESTAR ONE with two of
the largest mutual fund companies in the United States (see INVESTMENT
CONSIDERATIONS - YEAR 2000 COMPLIANCE). These agreements are

                                       9
<PAGE>

the two largest customer contracts in the Company's history.  The Company also
completed its final development testing for INVESTAR ONE, which will be
available during 1998.

  The Company added ACCOUNTCONTROL(TM) to its corporate services product line
with the April 1997 acquisition of Stellar Technology, Inc. (see ACQUISITIONS
AND OFFERINGS).  ACCOUNTCONTROL is a risk management system that is offered to
the corporate trust marketplace.

DISASTER RECOVERY SERVICES

  Many businesses depend upon computers to perform critical tasks and use
communications networks to transmit data between a centralized computer facility
and distant offices.  If a natural disaster, fire, power failure or other
emergency disrupts a company's computer operations or interrupts communications
between its data processing center and remote locations, its ability to stay in
business may be jeopardized.  To address this problem, the Company maintains
alternate sites for use by customers whenever they are unable to operate or
communicate with their own computer systems.

  The primary alternate sites provided by the Company are fully equipped and
operational computer centers known as "hotsites," where customers may restore
their critical applications using the Company's installed computer equipment.
The Company also provides environmentally prepared computer centers known as
"coldsites," in which customers may install and operate their own computer
equipment.  In addition, the Company provides mobile recovery resources that may
be delivered or shipped directly to customer-specified locations.

  The Company also provides general office space equipped with office equipment,
which customers may use alone or in conjunction with the use of a hotsite or
coldsite. This service offering, known as Work Group Recovery(SM), also includes
MegaVoice(R), a centralized voice communications recovery service that backs up
customers' automated telephone call distribution systems. The Company also
offers Program Management Services(SM), which encompasses the design,
coordination and management of all aspects of customers' disaster recovery
programs.

  Most of the Company's larger disaster recovery customers purchase a basic
package of services that includes use of a hotsite for six weeks to recover from
any computer center failure, a coldsite for six months if recovery operations
must continue for more than six weeks, a hotsite to regularly test disaster
recovery procedures, and general office space during recovery operations and
tests. Technical assistance is also provided when conducting recovery operations
and tests and when designing and implementing a backup communications network.

  The Company provides disaster recovery services to users of IBM (and
compatible) mainframe computers and also to users of Data General, Digital,
Filenet, Hewlett Packard, IBM midrange (AS/400, RS/6000 and Systems/3X), NCR,
Netframe, Prime, Pyramid, Sequent, Sequoia, Silicon Graphics, Stratus, Sun
Microsystems, Tandem and Unisys computers.  These services are marketed directly
and through representatives primarily to IBM (and compatible), Digital, Hewlett
Packard and Unisys mainframe and various midrange computer installations in
North America.

  In 1997, the Company continued to expand its disaster recovery offerings to
users of midrange computers. This effort was enhanced by an acquisition in
February 1997 that increased the number of customer contracts for midrange
computer facilities and the types of midrange offerings (see ACQUISITIONS AND
OFFERINGS). The Company also expanded the customer base of its Unisys platform
offerings during June 1997 through an acquisition of a disaster recovery
business (see ACQUISITIONS AND OFFERINGS).

  Also in 1997, the Company expanded its sales force and incorporated a
subsidiary in Mexico to enhance its marketing and sales activities in the
region. The Company continued to expand its marketing partner program by
establishing alliances with hardware providers and others and by signing certain
agreements with third parties to expand and enhance its recovery services and
capabilities.

                                       10
<PAGE>

  The Company introduced several new programs during 1997. The Company
introduced the SunGard National Network(SM), a dedicated network between the
Company's disaster recovery centers and customer locations that provides
customers with a nationwide managed recovery network utilizing synchronous
optical technology (SONET). The Company also began offering recovery services
for Silicon Graphics equipment and introduced its DR Made Simple(SM) program,
which offers recovery services to entry level customers directly over the
Internet.

  As of December 31, 1997, the Company had approximately 11,000 disaster
recovery contracts in force.  These contracts generally require the payment of
monthly fees and range in duration from one to five years.  The amount of the
monthly fees depends upon the type of facilities and services selected, contract
duration and competitive factors. Many customers have multiple contracts
covering different types of facilities and services.

  During 1997, for the twelfth consecutive year, the Company successfully
supported all customers who experienced computer related failures.

  DISASTER RECOVERY FACILITIES.  The Company believes that it conceived and
first implemented the concept of the MegaCenter(R), a multiple hotsite and
coldsite facility that customers may use directly or remotely.  The Company
operates five MegaCenters, located in Atlanta, Chicago, Philadelphia, Scottsdale
(Arizona) and Warminster (Pennsylvania) (see PROPERTIES).  The Philadelphia,
Scottsdale and Atlanta MegaCenters also provide Work Group Recovery services.
The Company believes that its Philadelphia MegaCenter, which houses Digital,
Filenet, Hewlett Packard, Hitachi, Netframe, IBM mainframe, Pyramid, Sequent,
Stratus and Tandem hotsites, and mobile Hewlett Packard, IBM midrange, NCR,
Sequoia, Silicon Graphics and Sun Microsystems computer systems, is the world's
largest commercial facility dedicated to disaster recovery.

  The Company also operates MetroCenter(R) facilities in strategic locations
throughout North America to provide Work Group Recovery services, enhanced
remote operations capabilities, and recovery operations and testing support for
mobile computer systems.  MetroCenters are located in Beachwood (Ohio), Bellevue
(Washington), Boston, Chicago, Dallas, Denver, Herndon (Virginia), Jersey City
(New Jersey), Los Angeles, Northville (Michigan), St. Louis, St. Paul, San Ramon
(California) and Mississagua (Toronto).  The Denver, St. Paul and Toronto
MetroCenters also have coldsites that can be used in conjunction with the remote
operations capability.

  The Company periodically opens new facilities or expands existing facilities
to accommodate both the growth in its customer base and the addition of
different types of computer systems and service offerings.  Also, the Company
regularly upgrades its systems to offer the most advanced computer equipment
generally used by its customers.  During 1997, the Company opened one new
MetroCenter outside of Seattle in Bellevue, Washington and added a Denver
MetroCenter as part of the Company's acquisition of Data Assurance Corporation
(see ACQUISITIONS AND OFFERINGS).   In addition, during 1997, the Company
relocated its MetroCenter in Santa Ana to Irvine, California in order to expand
its workgroup recovery capabilities in the Los Angeles area, expanded its
Philadelphia MegaCenter and Jersey City MetroCenter, and added a new Mobile Data
Center.  The Company continued during 1997 to expand its midrange system product
offerings at various facilities and, in addition, expanded its electronic
vaulting operations, which include remote journaling, hot storage, shadowing and
customer support services.  The disk access, tape cartridge and other peripheral
equipment at all facilities were upgraded or augmented, and the capabilities of
storage and retrieval systems were increased.  Also, in January 1998, the
Company installed an Hitachi Data Systems HDS Skyline Series processor Model 827
in its Philadelphia MegaCenter.

  The Company believes that by operating a relatively small number of large
facilities linked by a comprehensive communications network it can provide
superior disaster recovery services in the most effective manner.  All
MegaCenters and MetroCenters are linked by a communications network that is
capable of handling a full range of digital and analog data transmission
methods, including satellite and fiber-optic applications.  The Company
regularly upgrades this network to offer the

                                       11
<PAGE>

communications technology generally used by its customers. During 1997, the
Company continued expanding its matrix-switching capabilities to allow for more
efficient and reliable communications during customer tests and recovery
operations.

  The Company markets its comprehensive disaster recovery facilities and
services on a component pricing basis, allowing each customer to select the
specific items of equipment and other recovery services needed to satisfy its
individual disaster recovery requirements.

  PLANNING SERVICES.  The Company provides professional consulting and
educational services to develop comprehensive, business-wide continuity plans.
The services performed by the Company include risk analyses and audits to
determine exposure to the disruption of critical operations, business and
application impact analyses to prioritize recovery strategies, and the
development of enterprise recovery plans.  The Company also designs testing and
maintenance programs to verify that customers' plans reflect the most current
operational conditions.  In addition, the Company conducts regular seminars on
disaster recovery, business resumption and related topics.

  The Company also markets a Windows-based microcomputer software product named
CBR(R) Comprehensive Business Recovery, which automates the preparation and
maintenance of disaster recovery and business resumption plans, including
comprehensive company-wide planning capabilities.  During 1997, the Company
released CBR version 3.0, an enhanced system, which, in addition to other
features, enables users to validate and test their disaster recovery plans.  The
Company also continues to support its DOS-based microcomputer disaster recovery
planning software product known as DP/90 PLUS(R).

  In January 1998, the Company expanded its contingency planning services as a
result of its acquisition of a disaster recovery consulting business (see
ACQUISITIONS AND OFFERINGS).

COMPUTER SERVICES AND OTHER

  COMPUTER SERVICES.  The Company provides remote-access computer services
primarily to software developers, financial institutions and government agencies
and also provides outsourcing services.  In addition, the Company provides
direct marketing computer services and automated mass mailing and printing
services.  These activities are supported at the Company's computer centers in
Voorhees and Birmingham (see PROPERTIES), which also are used to provide remote
processing services for several of the Company's investment support systems
business units.

  In 1997, the Company upgraded and expanded its Voorhees, data center facility
to support the addition of new mainframe processors and related peripherals. In
addition, the Company began marketing its services to companies which require
significant testing resources to evaluate year 2000 compliance. Also in 1997,
the Company introduced a new service to provide full computer-center support to
customers using Unix and Windows NT systems.

  HEALTHCARE INFORMATION SYSTEMS.  Certain of the Company's healthcare
information systems focus on hospital electronic medical records and clinical
data management.  Other healthcare information systems assist health maintenance
organizations (HMO's) and other companies with high volume claims processing in
reducing costs and improving service to their customers.  The Company's
healthcare information systems use proprietary work-flow management and
document-imaging to increase efficiency and flexibility for users.  The
Company's principal systems of this type are:

                                       12
<PAGE>

<TABLE>
<CAPTION>

      SYSTEM            PLATFORM           MODE OF DELIVERY                 PRIMARY MARKETS
======================================================================================================
<S>                  <C>              <C>                          <C>

I-MAX(TM)            Windows NT       software license             HMO's, health insurance
                     Netware servers                               companies and workers compensation
                                                                   administrators
------------------------------------------------------------------------------------------------------
RMS(TM)              Windows NT       software license             state pension administration
                     Netware servers                               agencies
------------------------------------------------------------------------------------------------------
CHARTFFLO(R) 2000    Windows NT       software license             hospitals, healthcare
ACCOUNTFLO(TM)       Unix servers                                  institutions
CDM(TM)                                                            and medical clinics
-------------------------------------------------------------
ENTERPRISE 2OOO(TM)  Windows NT       software license
                     UNIX servers
-------------------------------------------------------------
MEDREC(TM)II         Windows NT       software license
------------------------------------------------------------------------------------------------------
</TABLE>

  In 1997, the Company acquired Med Data Systems, Inc., which offers MEDREC II,
a PC network-based system specializing in patient chart-tracking for the medical
records departments of hospitals and healthcare institutions. Also in 1997, the
Company's I-MAX product was configured for implementation within the workers
compensation market.

PRODUCT DEVELOPMENT

  The investment support systems needs of the financial services industry are
complex and substantial, and continually evolve as a result of changes in laws,
introductions of new types of investment vehicles and technology and increased
competition.  For these reasons, the Company believes that it is important to
continually maintain, enhance and evolve its proprietary investment support
systems (see INVESTMENT CONSIDERATIONS - PRODUCT DEVELOPMENT). The Company funds
most of its routine ongoing software maintenance and support activities through
the software maintenance fees paid by its investment support systems license
customers and a portion of the monthly fees paid by its investment support
systems remote processing customers.  As of December 31, 1997, the Company had
in force approximately 8,100 remote processing and software maintenance
contracts for its investment support systems.

  The Company's expenditures for software development during 1997, 1996 and
1995, including amounts that were capitalized, totalled approximately
$79,816,000, $65,101,000 and $53,908,000, respectively.  These amounts do not
include routine software maintenance and support costs that are included in cost
of sales, nor do they include costs incurred in performing certain custom
development projects for individual customers in the ordinary course of
business.

  The Company will continue its comprehensive program to evaluate and address
the impact of the year 2000 on its software systems, computer processing and
disaster recovery operations.  This program includes steps to identify each item
or element that will require modification and to establish a plan to complete
and test all required modifications.  The assessment, identification and
planning phases are substantially complete.  Modification and testing of many of
the Company's software products are completed and substantially all of the
remaining modification and testing activity is expected to be completed during
1998.  The Company also is evaluating its third-party hardware and software
systems, many of which are an integral part of its products or operations.  For
these systems, the Company is relying upon its outside vendors to meet year 2000
commitments.  The Company expects to meet year 2000 operation commitments and
expects to complete this effort on a timely basis, without significant
disruption to its customers or operations (see INVESTMENT CONSIDERATIONS - YEAR
2000 COMPLIANCE).

  During 1998, the Company expects to develop Windows NT and UNIX versions of
many products and to provide greater Internet capabilities.  These developments
are examples of the Company's strategy of using the established functionality of
its existing systems to develop state-of-the-art systems for new technological
environments.

                                       13
<PAGE>

  Also in 1998, the Company plans to develop enhancements to INVEST ONE to
support the European Monetary Union and a front-end relational database for ON-
LINE.  The Company plans to continue to enhance the functionality of EXPEDITER
by providing sub-accounting and automated reconciliation as a client server
application and developing an interface with National Securities Clearing
Corporation's Fund/Serv system. Developments to PHASE3 include an
internationalization project to add multicurrency functionality and to make the
system calendar independent, enhanced SQL capabilities and Internet access. The
Company also plans to release a new version of I-MAX with significantly enhanced
functionality, including integration with SQL. The Company will continue
developing functionality for its derivatives trading, foreign exchange and
consolidated risk management systems. In particular, during 1998, the Company
plans to enhance and build upon its Infinity product line in order to offer
next-generation software for front-to-back office derivatives trading, risk
management and operations control.

  The Company expands its disaster recovery services by adding new hotsites at
existing facilities, upgrading its computer equipment, developing new services
and opening new facilities. In 1998, the Company plans to add mainframe disk
storage capacity, expand its midrange product lines, and increase marketing
efforts in Mexico. During 1998, the Company plans to upgrade its Unisys
mainframe capability with the addition of a Unisys "ClearPath" NX4802 mainframe
processor at its Warminster MegaCenter. The Company also plans in 1998, as
demand requires, to expand its electronic vaulting product offerings, upgrade
its disk storage, tape cartridge and other peripheral hotsite equipment, open
new MetroCenters, upgrade its communications equipment and expand the SunGard
National Network.

  Also during 1998, the Company plans to release a new contingency planning
software product named PreCovery(TM), a client/server SQL database application
running on Windows NT. This expanded product offering will integrate business
analysis and testing tools with automated plan development and reporting
features, and offer Internet browser capability.

ACQUISITIONS AND OFFERINGS

  The Company seeks to grow through internal development and the acquisition of
businesses that broaden or complement its existing product lines (see INVESTMENT
CONSIDERATIONS - ACQUISITIONS AND RELATED EFFECT ON OPERATIONS).  Since its
initial public offering in 1986, the Company has acquired thirty-five
investment support systems businesses, twenty disaster recovery businesses, two
computer services businesses and three healthcare information systems businesses
(see INVESTMENT CONSIDERATIONS - HEALTHCARE INFORMATION SYSTEMS BUSINESS). Also
during this period, the Company completed two additional public offerings, a
common stock offering in 1987 and a convertible debenture offering in 1990. The
debentures were converted into common stock in 1993.

  During 1997, the Company spent approximately $57,457,000 in cash, net of cash
acquired, to acquire three investment support systems businesses and two
disaster recovery services businesses. The Company also issued during 1997 a
total of 3,682,000 shares of its common stock to acquire five investment support
systems businesses and one healthcare information systems business in
transactions that were accounted for as poolings-of-interests. In addition, the
Company issued approximately 13,223,000 shares of its common stock to acquire
Infinity Financial Technology, Inc. ("Infinity"), which closed on January 2,
1998 and was accounted for as a pooling-of-interests.

  SunGard Financial Systems expanded its product offerings in December 1997 by
acquiring WSC Investment Services, Inc., a New York-based business that provides
tax-information data processing to financial services firms.

                                       14
<PAGE>

  SunGard Trading Systems expanded its derivatives trading and risk management
business through the October 1997 acquisition of ADS Associates, Inc., a
California-based provider of trading support systems to small-to-medium size
institutions, and the December 1997 acquisition of BancWare, Inc., a provider of
asset and liability management software with comprehensive risk management and
performance measurement solutions.

  On January 2, 1998, the Company acquired Infinity, a public company that,
before being acquired by the Company, traded on The Nasdaq Stock Market.
Infinity develops, markets and supports enterprise software solutions for
financial trading and risk management with a suite of off-the-shelf
applications.

  In addition, SunGard Trading Systems expanded its Futures Systems business
unit by acquiring, in January 1997, GMI Software, Inc., a provider of software
and services to financial institutions worldwide for the processing of exchange-
traded futures and options and other securities, and by acquiring, in December
1997, May Consulting Incorporated, a supplier of comprehensive options analysis
and risk management software for professional option traders, large banks and
financial institutions.

  SunGard Trust and Shareholder Systems also grew by acquisition.  In April
1997, the Company expanded its Asset Management Systems product line with the
acquisition of Premier Solutions Ltd., a provider of global trust, custody
accounting and portfolio management systems used by domestic and international
banks and other financial institutions. The Company also acquired, in April
1997, the business of Stellar Technology, Inc. and its ACCOUNTCONTROL product,
which complements the Company's BONDMASTER product. In September 1997, the
Company purchased the business of EES Finance SA, a Paris-based provider of
portfolio management software sold in France, Belgium and Luxembourg.

  SunGard Recovery Services acquired two disaster recovery businesses during
1997.  In February 1997, the Company acquired the business of Data Assurance
Corporation, which provides, among other offerings, recovery services to the
credit union industry operating on Data General platforms.  In June 1997, the
Company acquired the business of Recovery Business Services, Inc., a provider of
recovery services to users of Unisys and Unisys-compatible mainframe computers.
In addition, in January 1998, the Company acquired the business of Raymond
Professional Management, an Atlanta-based provider of disaster recovery planning
services to the healthcare and telecommunications industries.

  SunGard Healthcare Information Systems also expanded in 1997 with the
acquisition of Med Data Systems, Inc., a California-based patient record
management software and services company.

  On June 4, 1997, the Company's common stock began trading on the New York
Stock Exchange and, in September 1997, the Company's common stock split two-for-
one.

COMPETITION

  Since most of the Company's computer services and software are specialized and
technical in nature, the various market-niches in which the Company competes
have a relatively small number of significant competitors. Some of the Company's
existing competitors and some potential competitors have substantially greater
financial, technological and marketing resources than the Company. The Company
believes that, for most of its businesses, service, quality and reliability are
more important competitive factors than price.

  In its investment support systems business, the Company competes with numerous
other data processing and financial software vendors, which may be broadly
categorized into two groups.  One group is comprised of specialized investment
support

                                       15
<PAGE>

systems companies, most of which are much smaller than the Company. The other
group is comprised of large computer services companies whose principal
businesses are not in the investment support systems area, such as Automatic
Data Processing, Inc., The Thomson Corporation, and First Data Corporation, all
of whom are also active acquirors. The Company also faces competition from the
internal processing and development capabilities of its customers and prospects.

  The key competitive factors in marketing investment support systems are the
accuracy and timeliness of processed information provided to customers, features
and adaptability of the software, level and quality of customer support, level
of software development expertise and overall net cost.  The Company believes
that it competes effectively as to each of these factors and that its reputation
and experience in these markets are important competitive advantages.

  The computer disaster recovery business remains highly competitive.  The
Company's principal competitors in this business are Comdisco, Inc. and IBM
Corporation, each of which have substantially greater financial and other
resources than the Company.  The Company also faces potential competition from
major companies that have computer facilities that could be made available for
disaster recovery use.  The Company believes that it competes effectively as to
the key competitive factors in this market, namely quality of facilities, scope
and quality of services, level and quality of customer support, level of
technical expertise and price.  The Company also believes that its experience
and reputation as the innovator in this business are important competitive
advantages.

  The Company's healthcare information systems business competes primarily with
companies that provide imaging systems through vertical market resellers that
focus on hospitals and HMO's. The Company believes that it competes effectively
as to the key competitive factors in marketing its applications software to
healthcare institutions. These factors include features and adaptability of the
software for specific market segments, knowledge of the healthcare industry,
level and quality of customer support, level of software development expertise
and overall net cost.

MARKETING

  Most of the Company's specialized computer services and software are marketed
throughout the United States, and many are marketed internationally as well.
The Company's export sales during 1997, 1996 and 1995 totalled approximately
$94,318,000, $58,019,000 and $51,273,000, respectively.  In addition, the
Company's foreign subsidiaries had sales for those years totalling approximately
$71,217,000, $57,457,000 and $43,612,000, respectively.  Combined export and
foreign sales during 1997 totalled $166 million and increased by 43% over 1996
combined export and foreign sales.  As a percentage of total revenues, combined
export and foreign sales have grown from 12% in 1993 to 19% in 1997.

  The Company develops and maintains proprietary marketing information by
identifying prospective customers through a variety of data bases and other
sources, and then canvassing the prospects by direct mail, telephone calls and
personal visits.  The Company also attempts to identify and attract customers by
conducting seminars and participating in industry conferences.  Customer
references have been an important aid in obtaining new business.

EMPLOYEES

  At December 31, 1997, the Company had approximately 4,500 full-time employees.
The Company believes that its success, in part, depends on its continuing
ability to attract and retain skilled technical, marketing and management
personnel.  While data processing professionals and software developers are in
high demand, the Company believes that, to date, it has been able to attract and
retain highly qualified personnel.  None of the Company's employees is covered
by a collective bargaining contract.  The Company believes that its employee
relations are excellent.

                                       16
<PAGE>

PROPRIETARY PROTECTION

  The Company owns registered marks for the SUNGARD name and owns or has applied
for registration for many of its service and software names.  The Company has
few registrations of its copyrights and has no patents.  The Company believes
that registered copyrights and patents are of less significance in its business
than software development skills, technological expertise and marketing
capabilities, although the Company intends to consider the advisability of
software patents in view of ongoing developments in that area.  The Company
relies primarily on contractual restrictions and trade secret laws for the
protection of its proprietary services and software.  The Company also has
established policies requiring its personnel to maintain the confidentiality of
the Company's proprietary property.

ITEM 2.  PROPERTIES

  The following table indicates the location and size of the Company's principal
computer facilities and disaster recovery MegaCenters.

<TABLE>
<CAPTION>
        LOCATION                                     PURPOSE                             SQUARE FEET
====================================================================================================
<S>                       <C>                                                            <C>

Birmingham, AL            SunGard Asset Management Systems, SunGard Employee Benefit          86,000
                          Systems and SunGard Mailing Services computer center.
----------------------------------------------------------------------------------------------------
Charlotte, NC             SunGard Trust Systems computer center.                              36,100
----------------------------------------------------------------------------------------------------
Fairfield, NJ             SunGard/Shaw Data computer center.                                  22,000
   (near New York)
----------------------------------------------------------------------------------------------------
Hopkins, MN               SunGard Securities Systems computer center.                         46,200
   (near Minneapolis)
----------------------------------------------------------------------------------------------------
Northbrook, IL            SunGard Recovery Services MegaCenter.                               84,000
   (near Chicago)
----------------------------------------------------------------------------------------------------
Philadelphia, PA          SunGard Recovery Services MegaCenter.                              339,830
----------------------------------------------------------------------------------------------------
Roswell, GA               SunGard Recovery Services MegaCenter.                               37,800
   (near Atlanta)
----------------------------------------------------------------------------------------------------
Scottsdale, AZ            SunGard Recovery Services MegaCenter.                               13,800
----------------------------------------------------------------------------------------------------
Voorhees, NJ              SunGard Computer Services computer center.                          51,000
   (near Philadelphia)
----------------------------------------------------------------------------------------------------
Waltham, MA               SunGard Brokerage Systems computer center.                          31,300
   (near Boston)
----------------------------------------------------------------------------------------------------
Warminster, PA            SunGard Recovery Services MegaCenter.                               20,000
   (near Philadelphia)
----------------------------------------------------------------------------------------------------
</TABLE>

  The Company leases all of its offices and facilities, with the exception of
its Birmingham, Voorhees and Warminster facilities, which are owned, and its
Hopkins facility, which consists of two connected buildings, one leased and the
other owned. The Company also owns its MetroCenters in St. Paul, Minnesota and
Northbrook, Illinois. In addition, the Company leases space, primarily for
sales offices, customer support offices, MetroCenters and remote operations
centers, in many locations in the United States and internationally. The Company
believes that its leased and owned facilities are adequate for the Company's
present operations.

                                       17
<PAGE>

ITEM 3.  LEGAL PROCEEDINGS

  The Company is presently a party to certain lawsuits arising in the ordinary
course of its business.  The Company believes that none of its current legal
proceedings will be material to its business or financial condition.


ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

  None.


ITEM 4.1   CERTAIN EXECUTIVE OFFICERS OF THE REGISTRANT

  The executive officers of the Company who are not also directors are listed
below.

<TABLE>
<CAPTION>
         NAME            AGE                      PRINCIPAL POSITIONS WITH THE COMPANY
===========================================================================================================
<S>                      <C>  <C>
Kenneth R. Adams          62  Chief Executive Officer, SunGard Healthcare Information Systems Group
-----------------------------------------------------------------------------------------------------------
Bruce H. Battjer          47  Chief Executive Officer, SunGard Computer Services Group
-----------------------------------------------------------------------------------------------------------
Andrew P. Bronstein       39  Vice President and Controller, SunGard Data Systems Inc.
-----------------------------------------------------------------------------------------------------------
Cristobal I. Conde        37  Chief Executive Officer, SunGard Trading Systems Group
-----------------------------------------------------------------------------------------------------------
Philip L. Dowd            56  Chief Executive Officer, SunGard Trust and Shareholder Systems Group
-----------------------------------------------------------------------------------------------------------
Lawrence A. Gross         45  Vice President and General Counsel, SunGard Data Systems Inc.
-----------------------------------------------------------------------------------------------------------
Michael F. Mulholland     48  Chief Executive Officer, SunGard Recovery Services Group
-----------------------------------------------------------------------------------------------------------
Michael K. Muratore       51  Chief Executive Officer, SunGard Financial Systems Group
-----------------------------------------------------------------------------------------------------------
Donna J. Pedrick          48  Vice President-Human Resources, SunGard Data Systems Inc.
-----------------------------------------------------------------------------------------------------------
Michael J. Ruane          44  Chief Financial Officer and Vice President-Finance, SunGard Data Systems Inc.
-----------------------------------------------------------------------------------------------------------
Richard C. Tarbox         45  Vice President-Corporate Development, SunGard Data Systems Inc.
-----------------------------------------------------------------------------------------------------------
</TABLE>

  Mr. Adams has been Chairman and Chief Executive Officer of Intelus Corporation
and of MACESS Corporation since 1995 and Chairman and Chief Executive Officer of
Med Data Systems, Inc. since July 1997.  Before that, he was Chairman and Chief
Executive Officer of SunGard Recovery Services Inc. since 1988 and was its
President from 1990 to 1992.  From 1983 to 1988, Mr. Adams was President and a
director of SunGard Trust Systems Inc.

  Mr. Battjer has been Chief Executive Officer and a director of SunGard
Computer Services Inc. since 1995.  Before that, Mr. Battjer served in various
executive positions in SunGard's Recovery Services Group, most recently as
President of Planning Solutions.

  Mr. Bronstein has been Vice President and Controller of the Company since
1994.  Before that, he was Corporate Controller since 1992.  From 1985 to 1992,
he was a manager with Coopers & Lybrand L.L.P., Philadelphia, where he served as
senior manager on the Company's account and as director of the firm's
Philadelphia high technology group.  Mr. Bronstein is a director and officer of
most of the Company's domestic subsidiaries.

                                       18
<PAGE>

  Mr. Conde has been Chief Executive Officer and a director of SunGard Systems
International Inc. (formerly named SunGard Capital Markets Inc.) since 1991.  He
was one of the founders of that company in 1983 and was its Executive Vice
President from 1983 to 1991.  Before it was acquired by the Company in 1987,
SunGard Systems International Inc., originally named Devon Systems
International, Inc., was an independent software company.  Mr. Conde is a
director and/or officer of some of the Company's domestic subsidiaries and many
of its foreign subsidiaries.

  Mr. Dowd has been Chief Executive Officer of SunGard Investment Systems Inc.
since 1990 and one of its directors since 1982.  He was President of SunGard
Investment Systems Inc. from 1982 to 1990.  Mr. Dowd is a director and/or
officer of many of the Company's investment support systems subsidiaries.

  Mr. Gross has been Vice President and General Counsel of the Company since
1986 and Secretary of the Company since 1987.  From 1979 to 1986, he was a
lawyer with Blank, Rome, Comisky & McCauley, Philadelphia, and he has
represented the Company since 1983.  Mr. Gross is a director and officer of most
of the Company's domestic subsidiaries and some of its foreign subsidiaries.

  Mr. Mulholland has been Chairman and Chief Executive Officer of SunGard
Recovery Services Inc. since 1995 and was its President and Chief Operating
Officer since 1992.  From 1987 to 1992, Mr. Mulholland served in various
executive capacities in the Company and the Recovery Services Group.

  Mr. Muratore has been Chief Executive Officer and a director of SunGard
Financial Systems Inc. since 1995.  Before that, he was Chief Executive Officer
and a director of SunGard Computer Services Inc. since 1989 and President-
Processing Divisions of SunGard Business Systems Inc. since 1990.  From 1985 to
1988, Mr. Muratore was President of the Company's Central Computer Facility,
which was consolidated with SunGard Computer Services Inc. at the end of 1988.

  Ms. Pedrick has been Vice President-Human Resources of the Company since 1988.
From 1983 to 1988, she was Director-Human Resources of the Company.

  Mr. Ruane has been Chief Financial Officer, Vice President-Finance and
Treasurer of the Company  since 1994.  From 1992 until 1994, Mr. Ruane was Chief
Financial Officer and Vice President-Finance of SunGard's Trading Systems Group.
Before that, he was Vice President-Controller of the Company from 1990 through
1992, and Corporate Controller of the Company from 1985 to 1990.  Mr. Ruane is a
director and officer of most of the Company's domestic and foreign subsidiaries.

  Mr. Tarbox has been Vice President-Corporate Development of the Company since
1987.

                                       19
<PAGE>

                                    PART II


ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
         MATTERS

  This information is incorporated by reference to the section entitled STOCK
INFORMATION in the Company's 1997 Annual Report to Stockholders (included in
Exhibit 13.1 to this Report on Form 10-K).


ITEM 6.  SELECTED FINANCIAL DATA

  This information is incorporated by reference to the section entitled SELECTED
FINANCIAL INFORMATION in the Company's 1997 Annual Report to Stockholders
(included in Exhibit 13.1 to this Report on Form 10-K).


ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

  This information is incorporated by reference to the section entitled
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS in the Company's 1997 Annual Report to Stockholders (included in
Exhibit 13.1 to this Report on Form 10-K).


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

  The financial statements of the Company, supplementary data and related
documents that are included in this Report on Form 10-K are listed in Item
14(a), Part IV, of this Report.


ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

  None.

                                       20
<PAGE>

                                    PART III


  This Part incorporates certain information from the Company's definitive proxy
statement for its 1998 Annual Meeting of Stockholders ("1998 Proxy Statement")
filed with the Securities and Exchange Commission not later than 120 days after
the end of the Company's fiscal year covered by this Report on Form 10-K.
Notwithstanding such incorporation, the sections of the Company's 1998 Proxy
Statement entitled REPORT OF THE COMPENSATION COMMITTEE AND EQUITY AWARD
SUBCOMMITTEE and PERFORMANCE GRAPH shall not be deemed to be "filed" as part of
this Report.


ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

  Information concerning the directors of the Company is incorporated by
reference to the Company's 1998 Proxy Statement including but not necessarily
limited to the section of such proxy statement entitled ELECTION OF DIRECTORS.

  Information concerning executive officers of the Company who are not also
directors is included in Item 4.1, Part I, of this Report on Form 10-K.


ITEM 11.  EXECUTIVE COMPENSATION

  This information is incorporated by reference to the Company's 1998 Proxy
Statement including but not necessarily limited to the section of such proxy
statement entitled EXECUTIVE COMPENSATION.


ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

  This information is incorporated by reference to the Company's 1998 Proxy
Statement including but not necessarily limited to the section of such proxy
statement entitled BENEFICIAL OWNERSHIP OF COMMON STOCK.


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

  This information is incorporated by reference to the Company's 1998 Proxy
Statement including but not necessarily limited to the sections of such proxy
statement entitled EXECUTIVE COMPENSATION, BENEFICIAL OWNERSHIP OF COMMON STOCK
and ELECTION OF DIRECTORS.

                                       21
<PAGE>

                                    PART IV


ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

  (a)(1)  FINANCIAL STATEMENTS

  The following financial statements of the Company, supplementary data and
related documents are incorporated by reference to the Company's 1997 Annual
Report to Stockholders (included in Exhibit 13.1 to this Report on Form 10-K):

  Report of Independent Accountants on Financial Statements, dated February 12,
  1998

  Consolidated Statements of Income for each of the years ended December 31,
  1997, 1996 and 1995

  Consolidated Balance Sheets as of December 31, 1997 and 1996

  Consolidated Statements of Cash Flows for each of the years ended December 31,
  1997, 1996 and 1995

  Consolidated Statement of Stockholders' Equity for each of the years ended
  December 31, 1997, 1996 and 1995

  Notes to Consolidated Financial Statements

  Quarterly Financial Information (unaudited)

  (a)(2) FINANCIAL STATEMENT SCHEDULES

  None.

  (a)(3)  EXHIBITS

  The Exhibits that are incorporated by reference in this Report on Form 10-K,
or are filed with this Report, are listed in the LIST OF EXHIBITS beginning on
page 24 of this Report.  Exhibits 10.14 through 10.25 are the management
contracts and compensatory plans and arrangements that are required to be
filed as Exhibits to this Report.

  (b)    REPORTS ON FORM 8-K

  Form 8-K (dated October 17, 1997) filed on October 27, 1997, relating to the
Company's entering into a definitive agreement to acquire Infinity Financial
Technology, Inc.

                                       22
<PAGE>

                                   SIGNATURES

PURSUANT TO THE REQUIREMENTS OF SECTION 13 OR 15(D) 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.

                                 SUNGARD DATA SYSTEMS INC.

Date:   March 30, 1998           By:     s/ James L. Mann
                                         ----------------
                                         JAMES L. MANN,
                              CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER

PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THIS REPORT
HAS BEEN SIGNED BELOW BY THE FOLLOWING PERSONS ON BEHALF OF THE REGISTRANT AND
IN THE CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>

              SIGNATURE                            CAPACITY                  DATE
--------------------------------------  ------------------------------  ---------------
<S>                                     <C>                             <C>

              s/ James L. Mann          Chief Executive Officer,        March 30, 1998
--------------------------------------
              JAMES L. MANN             President, and Chairman
                                        of the Board of Directors
                                        (principal executive officer)

              s/ Michael J. Ruane       Chief Financial Officer and     March 30, 1998
--------------------------------------
              MICHAEL J. RUANE          Vice President-Finance
                                        (principal financial officer)

              s/ Andrew P. Bronstein    Vice President and Controller   March 30, 1998
--------------------------------------
              ANDREW P. BRONSTEIN       (principal accounting officer)


              s/ Gregory S. Bentley          Director                   March 30, 1998
--------------------------------------
              GREGORY S. BENTLEY


              s/ Michael C. Brooks           Director                   March 30, 1998
--------------------------------------
              MICHAEL C. BROOKS


              s/ Albert A. Eisenstat         Director                   March 30, 1998
--------------------------------------
              ALBERT A. EISENSTAT


              s/ Bernard Goldstein           Director                   March 30, 1998
--------------------------------------
              BERNARD GOLDSTEIN


              s/ Michael Roth                Director                   March 30, 1998
--------------------------------------
              MICHAEL ROTH


              s/ Malcolm I. Ruddock          Director                   March 30, 1998
--------------------------------------
              MALCOLM I. RUDDOCK


              s/ Lawrence J. Schoenberg      Director                   March 30, 1998
--------------------------------------
              LAWRENCE J. SCHOENBERG
</TABLE>

                                       23
<PAGE>

                                LIST OF EXHIBITS

NUMBER                          DOCUMENT
------     ---------------------------------------------------------------------

 3.1       Restated Certificate of Incorporation of the Company (filed with this
           Report).

 3.2/1/    Amended and Restated Bylaws of the Company.

 4.1/1/    Specimen Common Stock Certificate of the Company.

10.1/1/    Lease, dated June 18, 1981, between the Company and American National
           Bank and Trust Company of Chicago, relating to the Company's facility
           in Northbrook, Illinois ("First Northbrook Lease").

10.2/2/    Amendment to the First Northbrook Lease, dated September 16, 1986.

10.3/3/    Amendment to the First Northbrook Lease, dated October 14, 1987.

10.4/4/    Amendment to the First Northbrook Lease, dated October 1, 1988.

10.5/4/    Lease, dated October 1, 1988, between the Company and American
           National Bank and Trust Company of Chicago, relating to the Company's
           facility in Northbrook, Illinois ("Second Northbrook Lease").

10.6/5/    Amendment to the Second Northbrook Lease, dated September 15, 1989.

10.7/6/    Lease, dated April 12, 1984, between the Company and Broad and Noble
           Associates, Inc., relating to the Company's facility at 401 North
           Broad Street, Philadelphia, Pennsylvania, and Amendments thereto,
           dated October 18, 1989, September 30, 1991 and November 19, 1992
           ("401 Lease").

10.8/7/    Amendment to 401 Lease, dated October 9, 1995.

10.9/8/    Amendment to 401 Lease, dated December 23, 1996.

10.10      Amendment to 401 Lease, dated March 1997 (filed with this
           Report).

10.11      Amendment to 401 Lease, dated December 18, 1997 (filed with this
           Report).

10.12/9/   Lease, dated May 19, 1989, between the Company and Northmeadow
           Associates, relating to the Company's facility in Roswell, Georgia,
           Amendment thereto, dated June 1989, and Assignment and Assumption
           thereof, dated December 31, 1990.

10.13/10/  Credit Agreement, dated August 29, 1996, among the Company, certain
           banks and other financial institutions and PNC Bank, National
           Association, as Agent.

10.14/9/   The Company's 1982 Incentive Stock Option Plan and Amendments
           thereto, dated January 1, 1987 and November 8, 1991./15/

10.15/11/  The Company's 1986 Stock Option Plan, Amendments thereto, dated
           January 1, 1987, November 1, 1988, February 6, 1990, November 8,
           1991, February 16, 1993 and February 13, 1995, and United Kingdom
           Addendum thereto, dated February 12, 1991./15/



                                       24
<PAGE>

NUMBER                          DOCUMENT
------     ---------------------------------------------------------------------

10.16/9/   The Company's 1988 Nonqualified Stock Option Plan and Amendment
           thereto, dated October 30, 1990./15/

10.17/5/   The Company's 1990 Amended and Restated Restricted Stock Incentive
           Plan./15/

10.18/12/  The Company's Restricted Stock Award Plan for Outside Directors./15/

10.19/13/  The Company's 1994 Equity Incentive Plan./15/

10.20/7/   The Company's 1996 Equity Incentive Plan./15/

10.21/8/   The United Kingdom Addendum to the Company's 1996 Equity Incentive
           Plan./15/

10.22      The Company's 1998 Equity Incentive Plan (filed with this
           Report)./15/

10.23/8/   Summary Description of the Company's Annual Executive Incentive
           Compensation Program./15/

10.24/7/   Summary Description of the Company's Long-Term Executive Incentive
           Compensation Plan./15/

10.25/9/   Form of Indemnification Agreement entered into by the Company with
           its directors and officers./15/

10.26/14/  Agreement and Plan of Merger and Reorganization entered into by an
           among the Company, Information Data Inc. and Infinity Financial
           Technology, Inc., dated October 17, 1997.

13.1       Portions of the Company's Annual Report to Stockholders for the
           fiscal year ended December 31, 1997 expressly incorporated herein by
           reference (filed with this Report).

21.1       Subsidiaries of the Registrant (filed with this Report).

23.1       Consent of Independent Accountants regarding the Company's
           consolidated financial statements (filed with this Report).

27.1       Financial Data Schedule for the year ended December 31, 1997 (filed
           with this Report).

27.2       Financial Data Schedule for the quarter ended September 30, 1997
           (restated) (filed with this Report).

27.3       Financial Data Schedule for the quarter ended June 30, 1997
           (restated) (filed with this Report).

27.4       Financial Data Schedule for the quarter ended March 31, 1997
           (restated) (filed with this Report).

27.5       Financial Data Schedule for the year ended December 31, 1996
           (restated) (filed with this Report).

27.6       Financial Data Schedule for the quarter ended September 30, 1996
           (restated) (filed with this Report).

27.7       Financial Data Schedule for the quarter ended June 30, 1996
           (restated) (filed with this Report).

                                       25
<PAGE>

27.8       Financial Data Schedule for the quarter ended March 31, 1996
           (restated) (filed with this Report).

27.9       Financial Data Schedule for the year ended December 31, 1995
           (restated) (filed with this Report).
__________

(1) Incorporated by reference to the Exhibits filed with the Company's
    Registration Statement on Form S-1 and Amendments No. 1, No. 2, and No. 3
    thereto (Registration No. 33-3181).

(2) Incorporated by reference to the Exhibits filed with the Company's
    Registration Statement on Form S-1 and Amendment No. 1 thereto (Registration
    No. 33-12536).

(3) Incorporated by reference to the Exhibits filed with the Company's Annual
    Report on Form 10-K for the fiscal year ended December 31, 1987 (Commission
    File No. 0-14232).

(4) Incorporated by reference to the Exhibits filed with the Company's Annual
    Report on Form 10-K for the fiscal year ended December 31, 1988 (Commission
    File No. 0-14232).

(5) Incorporated by reference to the Exhibits filed with the Company's Annual
    Report on Form 10-K for the fiscal year ended December 31, 1989 (Commission
    File No. 0-14232).

(6) Incorporated by reference to the Exhibits filed with the Company's Annual
    Report on Form 10-K for the fiscal year ended December 31, 1992 (Commission
    File No. 0-14232).

(7) Incorporated by reference to the Exhibits filed with the Company's Annual
    Report on Form 10-K for the fiscal year ended December 31, 1995 (Commission
    File No. 0-14232).

(8) Incorporated by reference to the Exhibits filed with the Company's Annual
    Report on Form 10-K for the fiscal year ended December 31, 1996 (Commission
    File No. 0-14232).

(9) Incorporated by reference to the Exhibits filed with the Company's Annual
    Report on Form 10-K for the fiscal year ended December 31, 1991 (Commission
    File No. 0-14232).

(10) Incorporated by reference to the Exhibits filed with the Company's
     Quarterly Report on Form 10-Q for the quarterly period ended September 30,
     1996 (Commission File No. 0-14232).

(11) Incorporated by reference to the Exhibits filed with the Company's Annual
     Report on Form 10-K for the fiscal year ended December 31, 1994 (Commission
     File No. 0-14232).

(12) Incorporated by reference to the Exhibits filed with the Company's Annual
     Report on Form 10-K for the fiscal year ended December 31, 1990 (Commission
     File No. 0-14232).

(13) Incorporated by reference to the Exhibits filed with the Company's Annual
     Report on Form 10-K for the fiscal year ended December 31, 1993 (Commission
     File No. 0-14232).

(14) Incorporated by reference to the Exhibits filed with the Company's
     Registration Statement on Form S-4 and Amendment No. 1 thereto
     (Registration No. 333-40053).

(15) Management contract or compensatory plan or arrangement.

                                       26
<PAGE>

                    INDEX OF EXHIBITS FILED WITH THIS REPORT



NUMBER                          DOCUMENT
------   -----------------------------------------------------------------------


3.1      Restated Certificate of Incorporation of the Company.

10.10    Amendment to 401 Lease, dated March 1997.

10.11    Amendment to 401 Lease, dated December 18, 1997.

10.22    The Company's 1998 Equity Incentive Plan./(1)/

13.1     Portions of the Company's Annual Report to Stockholders for the fiscal
         year ended December 31, 1997 expressly incorporated herein by
         reference.

21.1     Subsidiaries of the Registrant.

23.1     Consent of Independent Accountants regarding the Company's consolidated
         financial statements.

27.1     Financial Data Schedule for the year ended December 31, 1997.

27.2     Financial Data Schedule for the quarter ended September 30, 1997
         (restated).

27.3     Financial Data Schedule for the quarter ended June 30, 1997 (restated).

27.4     Financial Data Schedule for the quarter ended March 31, 1997
         (restated).

27.5     Financial Data Schedule for the year ended December 31, 1996
         (restated).

27.6     Financial Data Schedule for the quarter ended September 30, 1996
         (restated).

27.7     Financial Data Schedule for the quarter ended June 30, 1996 (restated).

27.8     Financial Data Schedule for the quarter ended March 31, 1996
         (restated).

27.9     Financial Data Schedule for the year ended December 31, 1995
         (restated).

_______________

(1)    Management contract or compensatory plan or arrangement.