<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, 1998  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 17, 1999 was $4,687,638,776.(1)  There
were 114,941,238 shares of the registrant's Common Stock outstanding as of March
17, 1999.

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, 1998, and Part III of this Form 10-K incorporates by reference
certain information from the registrant's definitive proxy statement, for its
1999 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.   [X]


(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 
    closing price of the registrant's Common Stock reported on March 17, 1999.
    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 OF CONTENTS
<TABLE>
<CAPTION>
                                                                                     PAGE
                                                                                     ----
                                     PART I
<S>         <C>                                                  <C>           
ITEM 1.     BUSINESS ..............................................................   1
               Overview ...........................................................   1
               Investment Considerations ..........................................   1   
               Investment Support Systems .........................................   4  
               Disaster Recovery Services .........................................   7   
               Computer Services and Other ........................................   8 
               Product Development ................................................   9
               Acquisitions and Offerings .........................................   9 
               Competition ........................................................  11 
               Marketing ..........................................................  11
               Employees ..........................................................  11
               Proprietary Protection .............................................  12       
 
ITEM 2.     PROPERTIES ............................................................  12
ITEM 3.     LEGAL PROCEEDINGS......................................................  13
ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS ...................  13
ITEM 4.1    CERTAIN EXECUTIVE OFFICERS OF THE REGISTRANT...........................  13
 
                                    PART II

ITEM 5.     MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS .  15
ITEM 6.     SELECTED FINANCIAL DATA ...............................................  15
ITEM 7.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
               OF OPERATIONS ......................................................  15
ITEM 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK ............  15
ITEM 8.     FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA............................  15
ITEM 9.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
            FINANCIAL DISCLOSURES .................................................  15
 
                                    PART III

ITEM 10.    DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT ....................  16
ITEM 11.    EXECUTIVE COMPENSATION ................................................  16
ITEM 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT ........  16
ITEM 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS ........................  16
 
                                    PART IV

ITEM 14.    EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K ...... 17
            SIGNATURES ............................................................ 18
            LIST OF EXHIBITS ...................................................... 19
 
</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 and
comprehensive computer disaster recovery services.  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 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 revenues accounted for approximately 80% of the
Company's total revenues during the last three years (81% in 1998). The
Company's recurring revenues are derived primarily from contracts for computer
processing, disaster recovery fees, professional services, software maintenance
and software and hardware rentals (see INVESTMENT CONSIDERATIONS). 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 75% were renewed or replaced with new contracts (74% in 1998).
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 1998.

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

INVESTMENT CONSIDERATIONS

  FORWARD-LOOKING STATEMENTS MAY PROVE INACCURATE.

  This Report and other Company communications contain forward-looking
statements made by the Company that are subject to risks and uncertainties and
that may change at any time and differ from actual results.  Forward-looking
statements include information about possible or assumed future financial
results of the Company and usually contain words such as "believes," "expects,"
"anticipates" or similar expressions.  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 such as:

  .  the timing and magnitude of software sales;

  .  the effect of year 2000 issues on software and services buying decisions;

                                       1
<PAGE>
 
  .  the timing and scope of technological advances and year 2000 compliance;

  .  the integration and performance of acquired businesses;

  .  the prospects for future acquisitions; and

  .  the overall condition of the financial services industry.

Certain of these factors are further discussed below.  These factors and those
discussed below should be considered in evaluating the Company's forward-looking
statements and any investment in the Company's common stock.

  RISK FACTORS.

  THE COMPANY'S GROWTH STRATEGY DEPENDS IN PART ON ACQUISITIONS.  IF THE COMPANY
IS UNABLE TO ACQUIRE BUSINESSES ON FAVORABLE TERMS OR SUCCESSFULLY INTEGRATE AND
MANAGE THE BUSINESSES ACQUIRED, THE COMPANY'S BUSINESS AND FINANCIAL RESULTS MAY
SUFFER.

  The Company intends to grow by expanding its existing businesses and by
acquiring similar or complementary businesses, including acquisitions that are
intended to qualify for pooling-of-interests accounting treatment.  This growth
strategy is subject to a number of risks which could adversely affect the
Company's business and financial results, including:

  .  the Company may not be able to find suitable businesses to acquire on
     affordable terms;

  .  competition from other acquirors and stock market fluctuations may make it
     more difficult for the Company to find and complete acquisitions;

  .  the Company may have to raise money in the debt or equity markets to
     finance future acquisitions;

  .  one or more acquisitions may not qualify for pooling-of-interests
     accounting treatment; and

  .  at any given time, a large number of shares of the Company's common stock
     issued to acquire businesses may become freely tradeable in the market.

  The businesses acquired by the Company may perform worse than expected or may
be more difficult to integrate and manage than expected.  If that happens, the
Company may suffer a number of adverse consequences, including:

  .  the Company may have to devote unanticipated financial and management
     resources to the acquired businesses;

  .  the Company may not be able to realize expected operating efficiencies; and

  .  the Company may have to write off goodwill or other intangible assets if
     the acquisition was accounted for as a purchase.

  THE COMPANY'S SUCCESS DEPENDS IN PART ON ADAPTING ITS COMPUTER SERVICES AND
SOFTWARE TO CHANGES IN TECHNOLOGY AND CHANGES IN ITS CUSTOMERS' BUSINESSES. IF
THE COMPANY DOES NOT SUCCESSFULLY UPDATE ITS SERVICES AND SOFTWARE, OR IF ITS
NEW PRODUCTS OR SERVICES ARE NOT TIMELY DELIVERED OR WELL RECEIVED BY CUSTOMERS,
THE COMPANY'S BUSINESS AND FINANCIAL RESULTS MAY SUFFER.

                                       2
<PAGE>
 
  The Company's ability to successfully update its services and software and
timely develop and deliver new products and services required by its customers
is subject to a number of risks which could adversely affect the Company's
business and financial results, including:

  .  the Company may find it difficult to update its services and software and
     timely develop and deliver its new products and services in a cost-
     effective manner, especially when faced with rapid technological changes
     that are hard to predict; and

  .  the Company may find it difficult to update its services and software to
     keep pace with  business, regulatory and other developments in the
     financial services industry in which most of the Company's customers
     operate.

  THE COMPANY'S BUSINESS IS DEPENDENT LARGELY ON THE FINANCIAL SERVICES
INDUSTRY.  IF THAT INDUSTRY DOES POORLY, THE COMPANY'S BUSINESS AND FINANCIAL
RESULTS MAY SUFFER.

  The Company sells most of its computer services and software to banks,
mutual funds, brokers, insurance companies and other financial services firms.
If the financial services industry or the Company's customers in the financial
services industry experience problems, the Company's business and financial
results could be adversely affected.  For example, the Company may suffer if
securities trading activity declines, the number or value of managed portfolios
decreases, or there is continued consolidation among firms in the financial
services industry.

  THE ADVENT OF YEAR 2000, INCLUDING ANY FAILURE BY THE COMPANY TO MAKE ITS
PRODUCTS YEAR 2000 COMPLIANT OR TO FULFILL YEAR 2000 COMMITMENTS TO CUSTOMERS,
MAY ADVERSELY EFFECT THE COMPANY'S BUSINESS AND FINANCIAL RESULTS.

  The Company has made many of its products year 2000 compliant so that they can
handle dates in the year 2000 and beyond.  However, the Company is still working
on making some of its important products year 2000 compliant.  In addition, the
Company has made commitments to some customers that need to convert off non-year
2000 compliant systems, and as a result, the Company must meet significant
development obligations and complete conversions before the end of 1999.  The
Company's year 2000 compliance efforts are subject to a number of risks which
could adversely affect the Company's business and financial results, including:

  .  the Company may not be able to make all of its important products year 2000
     compliant;

  .  the Company may not be able to timely meet its year 2000 commitments to
     customers;

  .  the Company may have to add personnel and buy new software and hardware
     earlier than planned to complete its year 2000 compliance efforts, which
     could cause an unexpected increase in expenses; and
 
  .  the Company's expenses may increase faster than expected because year 2000
     issues are causing a shortage in the availability of experienced
     programmers; and
  
  .  the Company may encounter unanticipated year 2000 problems, like a problem
     with another company's software or hardware that interacts with the
     Company's products or that is used by the Company.

  The Company believes that year 2000 compliance issues have caused some
acceleration of software buying and conversion activity. As a result, the
Company's rate of internal growth may decline in the second half of 1999 or in
the year 2000, which could adversely affect the Company's business and financial
results.
                                      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), Waltham (Massachusetts) and Weehawken (New Jersey) (see PROPERTIES). As
of December 31, 1998, the Company had approximately 8,900 remote processing and
software maintenance contracts in force for its investment support systems.
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 to internal growth and acquisitions (see ACQUISITIONS
AND OFFERINGS). During 1998, the Company continued its product enhancement
efforts to provide customers with additional functionality, connectivity and
productivity. Also during 1998, the Company continued to introduce Internet
technologies to its systems and pursue opportunities to market more of its
systems outside of the United States. In addition, many of the Company's systems
were made Euro-compliant during 1998 in advance of the January 1, 1999
conversion to the new single currency.

  BROKERAGE SYSTEMS.  The Company's brokerage systems provide comprehensive
processing of securities and exchange-traded futures and options for the banking
and brokerage industry.  These systems manage all important facets of processing
transactions, including customer management, order routing, execution,
clearance, position keeping, regulatory reporting and accounting.  The Company
also provides comprehensive options analysis and risk management systems for
professional option traders, large banks and financial institutions.  In
addition, the Company provides systems that collect, consolidate and report tax
information on securities transactions on behalf of fiduciaries for financial
services firms.

  The Company expanded its brokerage systems with several recent acquisitions
(see ACQUISITIONS AND OFFERINGS).  During 1998, the Company acquired Plaid
Brothers Software, Inc., a provider of software used by retail brokers in
tracking customer contacts, managing portfolios and measuring performance, and
also acquired a futures and options accounting product from the Board of Trade
Clearing Corporation.  In February 1999, the Company acquired Sterling Wentworth
Corporation, a provider of software designed for prospecting, client profiling,
needs analysis and cross-selling for use by insurance, banking and brokerage
companies.  In March 1999, the Company acquired Automated Securities Clearance,
Ltd., whose products include an automated order-routing and execution system for
use by broker/dealers, an electronic communications network for trading over-
the-counter stocks and a wireless communication system for straight-through
processing of securities listed on the New York Stock Exchange.

  E-COMMERCE. The Company's Expediter product facilitates the automated entry of
mutual fund transactions. Expediter is marketed to users of the Company's trust
accounting, securities trading and participant accounting systems, and for use
with other vendors' software products. In addition, the Company has entered into
an arrangement with a securities lending agent who is offering securities
lending services to the Company's asset management customers. 

                                       4
<PAGE>
 
  EMPLOYEE BENEFIT 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
benefits payments to retirees, and produce tax reports for plan sponsors and
participants. As a complement to the Company's participant accounting systems,
the Company offers document generation systems for the creation of retirement
plan documents and forms and other complex documents. In July 1998, the Company
expanded its document generation business by acquiring the business of Pension
Publications of Denver, Inc. (see ACQUISITIONS AND OFFERINGS).

  ENERGY SYSTEMS. In December 1998, the Company acquired the business of Primo
Systems, Inc., a provider of risk management systems to the oil, natural gas,
electric power and coal industries (see ACQUISITIONS AND OFFERINGS). With this
acquisition, the Company started a new product line, which it intends to expand
through acquisition, to provide systems that permit energy companies and power
trading firms to control physical and financial trading and provide trading
support, market and credit risk management, trade processing, power scheduling
and accounting functions.

  INVESTMENT AND SHAREHOLDER 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 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 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 also provides general ledger accounting systems to insurance
companies. These systems provide general ledger, budget performance and
responsibility reporting, cost accounting and profitability analysis. The
Company aquired an additional insurance accounting and reporting product in 
February 1999 (see ACQUISITIONS AND OFFERINGS).

  NON-PROFIT ERP SYSTEMS.  The Company provides a fund accounting system for the
accounting and management requirements of educational institutions, state and
local governments and other nonprofit organizations.

  SECURITIES AND TREASURY 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 integrating front- and back-office operations
and performing many investment accounting functions, the Company's securities
systems maintain inventories of unsold securities, process trade activities and
assist users in monitoring compliance with audit limits, trading limits and
government regulations.

                                       5
<PAGE>

  The Company also provides a front-office trading support system for
institutional traders in the foreign exchange, fixed income, derivative and
international money markets.  In addition, the Company provides pricing,
analysis, risk management and administration systems for equities, derivatives
and interest rate instruments.

  The Company's global treasury and risk management systems are used by the
treasury departments of Fortune 2000 companies and governmental entities.  These
products enable the efficient management of an organization's cash, debt and
investment portfolios.  The Company expanded its treasury systems product
offerings by acquiring Multinational Computer Models, Inc. in July 1998 and the
business of ICMS International, Inc. in September 1998 (see ACQUISITIONS AND
OFFERINGS).

  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 derivative instruments, securities and
foreign exchange contracts and by their middle- and back-office operations.
These front-to-back office 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.

  On January 2, 1998, the Company acquired Infinity Financial Technology, Inc.
("IFT"), a derivatives trading and risk management company, which represented
the largest acquisition in the Company's history (see ACQUISITIONS AND
OFFERINGS). During 1998, the Company merged IFT and its existing related
businesses, Renaissance Software and SunGard Capital Markets, to form a new
operating group named Infinity, A SunGard Company. During 1998, this operating
group launched a global professional services division to focus on application
implementation and integration consulting around the Company's products. The
acquisition in December 1998 of Jaeger & Partner, a Swiss consulting business,
further expanded the Company's professional services offerings (see ACQUISITIONS
AND OFFERINGS).

  The Company also provides asset and liability management software with
comprehensive risk management and performance measurement functionality to
financial institutions. This product offering was expanded with the Company's
acquisition of DollarMark Solutions, Inc. in February 1999 (see ACQUISITIONS AND
OFFERINGS).

  TRUST AND CUSTODY 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 system automates the functions associated
with worldwide securities lending activities.

                                       6
<PAGE>
 
  WHOLESALE BANKING SYSTEMS. In March 1999, the Company acquired Tiger Systems,
Inc., a provider of international electronic banking systems (see ACQUISITIONS
AND OFFERINGS). Tiger Systems' products are used for international funds
transfer, trade services and cash management by corporate and correspondent
banks via the Internet or private networks, often under a bank's private label.
The Company also provides a multicurrency front- and back-office system used by
banks for portfolio management, deal capture and analytics.

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, and general office space equipped with workstations and office
equipment. In addition, the Company provides mobile recovery resources that may
be delivered or shipped directly to customer-specified locations and electronic
vaulting operations that include remote journaling, hot storage, shadowing and
customer support services.

  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 and RS/6000), 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 mainframe and various midrange computer
installations in North America.

  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. As of December 31, 1998, the Company had approximately 13,000 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 is based upon component pricing and 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.

                                       7
<PAGE>
 
  During 1998, for the thirteenth 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, 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). During 1998, the Company completed a
major expansion of its Philadelphia MegaCenter, which the Company believes is 
the world's largest commercial facility dedicated to disaster recovery. The
Philadelphia MegaCenter 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.

  The Company also operates MetroCenter 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 Toronto.  The Denver, St. Paul and Toronto MetroCenters 
also have coldsites that can be used in conjunction with the remote operations
capability.

  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. The SunGard
National Network, a dedicated network linking all of the Company's MegaCenters
and MetroCenters and many customer locations, provides customers with a
nationwide managed recovery network utilizing synchronous optical technology
(SONET).

  PLANNING SERVICES. The Company provides planning software and professional
consulting and educational services to develop comprehensive, business-wide
continuity plans. The Company's contingency planning software integrates
business analysis and testing tools with automated plan development and
reporting features and offers Internet capabilities. 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 January
1998, the Company aquired a contingency planning services business (see
ACQUISITIONS AND OFFERINGS).

COMPUTER SERVICES AND OTHER

  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.

  The Company's healthcare information systems assist health maintenance
organizations (HMOs), workers compensation administrators and other companies
with high-volume claims processing in reducing costs and improving service to
their customers. These systems use proprietary work-flow management and 
document-imaging to increase efficiency and flexibility for users. See 
AQUISITIONS AND OFFERINGS - 1999 TRANSACTIONS.

                                       8
<PAGE>
 
PRODUCT DEVELOPMENT

  The Company continually upgrades, enhances and expands its proprietary
products and services to meet the needs of its customers and to utilize advances
in technology (see INVESTMENT CONSIDERATIONS).

  For a discussion of the Company's comprehensive program to evaluate and
address the impact of the year 2000 on its software systems, computer processing
and disaster recovery operations, see MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS in the Company's 1998 Annual
Report to Stockholders (included in Exhibit 13.1 to this Report).  See also
INVESTMENT CONSIDERATIONS.

  The investment support systems needs of the financial services industry are
complex and substantial, and continually evolve as a result of increased trading
volume, complexity of financial instruments, changes in laws, introductions of
new types of investment vehicles and technology and increased competition. For
these reasons, the Company continually maintains, enhances and evolves its
proprietary investment support systems. The Company expects to continue to
develop enhanced and new functionality for its products, provide greater
Internet capabilities and develop Windows NT and UNIX versions of many products.
The Company's product development strategy depends in part on the introduction
of new technology into the established functionality of its existing systems.

  The Company funds most of its routine ongoing software maintenance and support
activities through the software maintenance and related upgrade fees paid by its
investment support systems license customers and a portion of the monthly fees
paid by its remote processing customers. The Company's expenditures for software
development during 1998, 1997 and 1996, including amounts that were capitalized,
totalled approximately $116,393,000, $92,785,000 and $73,858,000, 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 expands its disaster recovery and computer processing services by
adding new service offerings and by opening new facilities or expanding 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 and communications networks to offer the most
advanced computer equipment and communications technology generally used by its
customers.

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).  Since its initial public offering in 1986, the Company has
acquired 48 investment support systems businesses, 20 disaster recovery
businesses and five computer services businesses.  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 1998, the Company spent approximately $16,890,000 in cash, net of cash
acquired, to acquire four investment support systems businesses and one disaster
recovery services business.  In addition, the Company issued during 1998 a total
of 14,566,000 shares of its common stock to acquire three investment support
systems businesses in transactions that were accounted for as poolings of
interests.

                                       9
<PAGE>
 
  In January 1998, the Company acquired Infinity Financial Technology, Inc.
("IFT"), a provider of enterprise software solutions for financial trading and
risk management. IFT was a public company that, before being acquired by the
Company, traded on The Nasdaq Stock Market. IFT and the Company's existing
related businesses, Renaissance Software and SunGard Capital Markets, were
merged during 1998 to create a new operating group named Infinity, A SunGard
Company.

  Also in January 1998, the Company acquired the business of Raymond
Professional Management, Inc., a provider of disaster recovery planning services
to the healthcare and telecommunications industries.

  The Company expanded its brokerage systems product offerings by acquiring, in
May 1998, Plaid Brothers Software, Inc., a provider of contact and stock
portfolio management software for retail securities brokerage houses, and, in
July 1998, certain back-office accounting software for futures and options from
the Board of Trade Clearing Corporation.

  In July 1998, the Company acquired the business of Pension Publications of
Denver, Inc., a provider of retirement plan documents, publications and
educational programs.

  In July and September 1998, the Company acquired, respectively, Multinational
Computer Models, Inc. and the business of ICMS International, Inc., both
providers of treasury and risk management software systems to corporations.

  In December 1998, the Company acquired the business of Primo Systems, Inc., a
provider of risk management software systems for the energy industry. Also in
December 1998, the Company acquired Jaeger & Partner AG, a Swiss-based company
that provides asset and liability management software and related risk
management consulting services.

  1999 TRANSACTIONS. During the first quarter of 1999, the Company completed
five acquisitions and entered into definitive agreements to acquire two
companies.

  In January 1999, the Company entered into a definitive agreement to acquire
FDP Corp., a provider of software systems for the sales, marketing and
administration functions of life insurance companies and employee benefit
administrators.

  In February 1999, the Company acquired Sterling Wentworth Corporation, a
provider of rule-based selling, analysis and advisory software tools for the
financial services industry.  Also in February 1999, the Company acquired
DollarMark Solutions, Inc., a provider of asset and liability management
software and services for thrifts, banks and other financial institutions.  In
addition, in February 1999, the Company added an investment accounting and
reporting software product to its insurance systems business unit by acquiring
the business of Annual Statement Automated Products, Inc.

  In March 1999, the Company acquired Automated Securities Clearance, Ltd., a
provider of an equity order management software system for brokerage firms,
electronic communications networks for trading over-the-counter stocks and
wireless communication systems for trading exchange listed securities.  Also in
March 1999, the Company acquired Tiger Systems, Inc., a provider of electronic
banking automation software systems and products.

  In March 1999, the Company entered into a definitive agreement to acquire
Oshap Technologies Ltd., an Israel-based group of technology software firms
whose principal holdings are a 98% ownership interest in MINT Technologies Ltd.,
a provider of solutions in the field of enterprise application integration, and
a 77% ownership interest in Decalog NV, a provider of management and decision-
support applications for asset managers.

  In addition, in March 1999, the Company sold two healthcare information
systems businesses, Intelus Corporation and Med Data Systems, Inc.

                                       10
<PAGE>
 
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 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., First Data Corporation, Reuters Group PLC, and The
Thomson Corporation, and 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 is 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.

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 international sales during 1998, 1997 and 1996 totalled
approximately $269,676,000, $215,258,000 and $158,280,000, respectively.

  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, 1998, the Company had approximately 5,300 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.

                                       11
<PAGE>
 
PROPRIETARY PROTECTION

  The Company owns registered marks for the SUNGARD name and owns or has applied
for trademark registration for many of its products and services.  The Company
has few registrations of its copyrights and has no patents.  The Company
believes that patents and the registration of its copyrights 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 copyright
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               86,000
                          Benefit Systems and SunGard Mailing Services computer center.
 
Charlotte, NC             SunGard Trust Systems computer center.                           36,100
 
Fairfield, NJ             SunGard Portfolio Solutions 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.                            15,300
 
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)

Weehawken, NJ             Automated Securities Clearance computer center.                   7,500
  (near New York)
-------------------------------------------------------------------------------------------------
</TABLE>

  The Company leases all of its offices and facilities, with the exception of
its Voorhees, Warminster and Weehawken 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 and certain offices in Birmingham, Alabama. 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.

                                       12
<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 SUNGARD DATA SYSTEMS INC.
==============================================================================
<S>                    <C>  <C>
 
Andrew P. Bronstein     40  Vice President and Controller
 
Cristobal I. Conde      38  Executive Vice President
 
Philip L. Dowd          57  Senior Vice President
 
Lawrence A. Gross       46  Vice President and General Counsel
 
Michael K. Muratore     52  Senior Vice President
 
Donna J. Pedrick        49  Vice President-Human Resources
 
Michael J. Ruane        45  Chief Financial Officer and Vice President-Finance

Richard C. Tarbox       46  Vice President-Corporate Development
------------------------------------------------------------------------------
</TABLE>

  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.

  Mr. Conde has been Executive Vice President of the Company since October 1998.
From 1991 to October 1998, Mr. Conde was Chief Executive Officer of the SunGard
Trading Systems Group.  He was one of the founders of Devon Systems
International, Inc., an independent software company, before it was acquired by
the Company in 1987.  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 Senior Vice President of the Company since October 1998.
From 1990 to October 1998, Mr. Dowd was Chief Executive Officer of the SunGard
Trust and Shareholder Systems Group.  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. Muratore has been Senior Vice President of the Company since October 1998.
From 1995 to October 1998, Mr. Muratore was Chief Executive Officer of the
SunGard Financial Systems Group, and

                                       13
<PAGE>
 
from 1990 to 1995, he was Chief Executive Officer of the SunGard Computer
Services Group. From 1985 to 1989, Mr. Muratore held various senior executive
positions with the Company. Mr. Muratore is a director and/or officer of many of
the Company's investment support systems subsidiaries.

  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.

                                       14
<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 1998 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 1998 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 1998 Annual Report to Stockholders (included in
Exhibit 13.1 to this Report on Form 10-K).


ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

  The Company does not use derivative financial instruments to manage market
risk exposures or for trading or speculative purposes. The Company invests
available cash in short-term, highly-liquid financial instruments, with a
substantial portion of such investments having initial maturities of three
months or less. While changes in interest rates could decrease the Company's
interest income, the Company does not consider the interest rate risk for these
investments to be material.

  While 23% of the Company's 1998 revenues came from sales to customers located
outside of the United States, more than half of these sales were U.S.-dollar
denominated sales by the Company's U.S.-based operations. For the Company's
foreign operations, the Company generally matches local currency revenues with
local currency costs. For these reasons, the Company does not believe that it
has a material exposure to changes in foreign currency exchange rates.

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.

                                       15
<PAGE>
 
                                    PART III

  This Part incorporates certain information from the Company's definitive proxy
statement for its 1999 Annual Meeting of Stockholders ("1999 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 1999 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 1999 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 1999 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 1999 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 1999 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.

                                       16
<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 1998 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 11,
  1999, except as to subsequent events, for which the date is March 1, 1999

  Consolidated Statements of Income for each of the years ended December 31,
  1998, 1997 and 1996

  Consolidated Balance Sheets as of December 31, 1998 and 1997

  Consolidated Statements of Cash Flows for each of the years ended December 31,
  1998, 1997 and 1996

  Consolidated Statement of Stockholders' Equity for each of the years ended
  December 31, 1998, 1997 and 1996

  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 19 of this Report. Exhibits 10.15 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

  None.

                                       17
<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, 1999        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, 1999
--------------------------------------                                                                                    
              JAMES L. MANN                       President, and Chairman                                                 
                                                      of the Board of Directors                                           
                                                      (principal executive officer)                                       
                                                                                                                          
          /s/ Michael J. Ruane                    Chief Financial Officer and                March 30, 1999
--------------------------------------                Vice President-Finance                                              
              MICHAEL J. RUANE                        (principal financial officer)                                       
                                                                                                                          
                                                                                                                          
          /s/ Andrew P. Bronstein                 Vice President and Controller              March 30, 1999
--------------------------------------                (principal accounting officer)                                      
              ANDREW P. BRONSTEIN                                                                                         
                                                                                                                          
                                                                                                                          
          /s/ Gregory S. Bentley                   Director                                  March 30, 1999              
---------------------------------------                                                                                   
              GREGORY S. BENTLEY                                                                                          
                                                                                                                          
                                                                                                                          
          /s/ Michael C. Brooks                    Director                                  March 30, 1999                     
---------------------------------------                                                                                   
              MICHAEL C. BROOKS                                                                                           
                                                                                                                          
                                                                                                                          
          /s/ Albert A. Eisenstat                  Director                                  March 30, 1999            
---------------------------------------                                                                                   
              ALBERT A. EISENSTAT                                                                                         
                                                                                                                          
                                                                                                                          
          /s/ Bernard Goldstein                    Director                                  March 30, 1999    
---------------------------------------                                                                                   
              BERNARD GOLDSTEIN                                                                                           
                                                                                                                          
                                                                                                                          
          /s/ Michael Roth                         Director                                  March 30, 1999    
---------------------------------------                                                                                   
              MICHAEL ROTH                                                                                                
                                                                                                                          
                                                                                                                          
          /s/ Malcolm I. Ruddock                   Director                                  March 30, 1999    
---------------------------------------                                                                                   
              MALCOLM I. RUDDOCK                                                                                          
                                                                                                                          
                                                                                                                          
          /s/ Lawrence J. Schoenberg               Director                                  March 30, 1999    
---------------------------------------                                                                                   
              LAWRENCE J. SCHOENBERG                                                                            
</TABLE> 

                                       18
<PAGE>
 
                                LIST OF EXHIBITS

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

 3.1        Restated Certificate of Incorporation of the Company (filed with
            this Report).
 
 3.2        Amended and Restated Bylaws of the Company (filed with this Report).
                                                                              
 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        Amendment to the First Northbrook Lease, dated September 29, 1998 
            (filed with this Report).                                         
                                                                              
10.6/4/     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").

10.7/5/     Amendment to the Second Northbrook Lease, dated September 15, 1989.
                                                                              
10.8/6/     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").
                                                                               
10.9/7/     Amendment to 401 Lease, dated October 9, 1995.                   
                                                                               
10.10/8/    Amendment to 401 Lease, dated December 23, 1996.                 
                                                                             
10.11/9/    Amendment to 401 Lease, dated March 1997.                        
                                                                             
10.12/9/    Amendment to 401 Lease, dated December 18, 1997.                 
                                                                             
10.13/10/   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.

10.14/11/   Credit Agreement, dated August 29, 1996, among the Company, certain
            banks and other financial institutions and PNC Bank, National
            Association, as Agent.

10.15/12/   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./16/

                                       19
<PAGE>
 
10.16/10/   The Company's 1988 Nonqualified Stock Option Plan and Amendment
            thereto, dated October 30, 1990./16/

10.17/5/    The Company's 1990 Amended and Restated Restricted Stock Incentive
            Plan./16/       
                                                                              
10.18/13/   The Company's Restricted Stock Award Plan for Outside Directors./16/
                                                                              
10.19/14/   The Company's 1994 Equity Incentive Plan./16/                     
             
10.20/7/    The Company's 1996 Equity Incentive Plan./16/                    

10.21/8/    The United Kingdom Addendum to the Company's 1996 Equity Incentive
            Plan./16/                                                          
   
10.22/9/    The Company's 1998 Equity Incentive Plan./16/                     
                                                                              
10.23       Summary Description of the Company's Annual Executive Incentive   
            Compensation Program (filed with this Report)./16/                
                                                                              
10.24       Summary Description of the Company's Long-Term Executive Incentive
            Compensation Plan (filed with this Report)./16/

10.25/10/   Form of Indemnification Agreement entered into by the Company with
            its directors and officers./16/                                     
                                                                              
10.26/15/   Agreement and Plan of Merger and Reorganization entered into by and
            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, 1998 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, 1998 (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).

                                       20
<PAGE>
 
(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, 1997 (Commission
     File No. 1-12989).

(10) 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).

(11) 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).

(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, 1994 (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, 1990 (Commission
     File No. 0-14232).

(14) 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).

(15) 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).

(16) Management contract or compensatory plan or arrangement.

                                       21
<PAGE>
 
                   INDEX OF EXHIBITS FILED WITH THIS REPORT



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


3.1    Restated Certificate of Incorporation of the Company.

3.2    Amended and Restated Bylaws of the Company.

10.5   Amendment to the First Northbrook Lease, dated September 29, 1998

10.23  Summary Description of the Company's Annual Executive Incentive
       Compensation Program/(1)/

10.24  Summary Description of the Company's Long-Term Executive Incentive
       Compensation Plan/(1)/

13.1   Portions of the Company's Annual Report to Stockholders for the fiscal
       year ended December 31, 1998 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, 1998.


_______________

(1)    Management contract or compensatory plan or arrangement.