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                                   EXHIBIT 99


PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 - SAFE HARBOR FOR
FORWARD-LOOKING STATEMENTS

The Private Securities Litigation Reform Act of 1995 provides a safe-harbor for
forward-looking statements made by public companies. This safe-harbor protects a
company from securities law liability in connection with forward-looking
statements if the company complies with the requirements of the safe-harbor. As
a public company, we have relied and will continue to rely on the protection of
the safe harbor in connection with our written and oral forward-looking
statements.

When evaluating our business, you should consider:

o    all of the information in this quarterly report on Form 10-Q;
o    the risk factors described in our Rule 424(b) prospectus filed with the
     Securities and Exchange Commission on August 5, 1999; and
o    the risk factors described below.


                                  RISK FACTORS

Although we believe that the expectations reflected in our forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, performance or achievements or other future events. Moreover, neither
we nor anyone else assumes responsibility for the accuracy or completeness of
forward-looking statements. You should consider our forward-looking statements
in light of the following risk factors and other information in this quarterly
report. If any of the risks described below occurs, our business, results of
operation and financial condition could differ from those projected in our
forward-looking statements. We are under no duty to update any of our
forward-looking statements after the date of the quarterly report. You should
not place undue reliance on forward-looking statements.


FACTORS RELATING TO OUR BUSINESS AND THE MARKET FOR ELECTRONIC BUSINESS
RELATIONSHIP MANAGEMENT SOLUTIONS MAKE OUR FUTURE OPERATING RESULTS UNCERTAIN,
AND MAY CAUSE THEM TO FLUCTUATE FROM PERIOD TO PERIOD.

Our operating results have varied in the past, and we expect that they may
continue to fluctuate in the future. In addition, our operating results may not
follow any past trends. Some of the factors that could affect the amount and
timing of our revenues from software licenses and related expenses and cause our
operating results to fluctuate include:

o    market acceptance of our products;

o    the length and variability of the sales cycle for our products, which
     typically ranges between two and six months from our initial contact with a
     potential customer to the signing of a license agreement;

o    the timing of customer orders, which can be affected by customer order
     deferrals in anticipation of new product introductions, product
     enhancements, concerns about Year 2000 issues, and customer budgeting and
     purchasing cycles;

o    our ability to successfully expand our sales force and marketing programs;

o    our ability to successfully expand our international operations;


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o        the introduction or enhancement of our products or our competitors'
         products;

o        changes in our or our competitors' pricing policies;

o        our ability to develop, introduce and market new products on a timely
         basis; and

o        general economic conditions, which may affect our customers' capital
         investment levels in management information systems.

Our product revenues are not predictable with any significant degree of
certainty and future product revenues may differ from historical patterns.
Historically, we have recognized a substantial portion of our revenues in the
last month of a quarter. If customers cancel or delay orders, it can have a
material adverse impact on our revenues and results of operations from quarter
to quarter. Because our results of operations may fluctuate from quarter to
quarter, you should not assume that you can predict results of operations in
future periods based on results of operations in past periods.

Even though our revenues are difficult to predict, we base our expense levels in
part on future revenue projections. Many of our expenses are fixed, and we
cannot quickly reduce spending if revenues are lower than expected. This could
result in significantly lower income or greater loss than we anticipate for any
given period.

WE EXPECT SEASONAL TRENDS TO CAUSE OUR QUARTERLY LICENSE REVENUES TO FLUCTUATE
AND IN RECENT YEARS OUR LICENSE REVENUES FOR THE FOURTH QUARTER OF OUR FISCAL
YEAR HAVE EXCEEDED THE REVENUES FOR THE FOLLOWING QUARTER.

We have experienced, and expect to continue to experience, seasonality with
respect to product license revenues. In recent years, we have experienced
relatively greater revenues from licenses in the fourth quarter of our fiscal
year, which ends June 30th, than in each of the first three quarters,
particularly the first quarter. We have historically recognized more license
revenues in the fourth quarter of our fiscal year and recognized less license
revenues in the subsequent first quarter. We believe that these fluctuations are
caused in part by customer buying patterns and the efforts of our direct sales
force to meet or exceed fiscal year-end quotas. In addition, our sales in Europe
are generally lower during the summer months than during other periods. We
expect that these seasonal trends are likely to continue in the future.

In particular, we believe these factors have caused license revenues for our
quarter ending September 30, 1999 to be less than license revenues for the
quarter ended June 30, 1999. If revenues for a quarter ending September 30 are
lower than the revenues for the prior quarter, it may be hard to determine
whether the reason for the reduction in revenues involves seasonal trends or
other factors adversely affecting our business.

OUR LIMITED OPERATING HISTORY MAKES IT DIFFICULT TO PREDICT HOW OUR BUSINESS
WILL DEVELOP AND FUTURE OPERATING RESULTS.

We commenced operations in January, 1991. We initially focused on the
development of application software for pen computers. In September, 1994, we
changed our focus to research and development of electronic business
relationship management software. We commercially released the initial version
of our principal product, Pivotal Relationship, in April, 1996. We commercially
released the initial version of Pivotal eRelationship in February, 1999. We have
a limited operating history, and we face many of the risks and uncertainties
encountered by early-stage companies in rapidly evolving markets.

These risks and uncertainties include:

o        no history of profitable operations;

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o   uncertain market acceptance of our products;

o   our reliance on a limited number of products;

o   the risks that competition, technological change or evolving customer
    preferences could adversely affect sales of our products;

o   the need to expand our sales and support capabilities;

o   our reliance on third parties to market, install, and support our products;

o   our dependence on a limited number of key personnel, including our
    co-founders; and

o   the risk that our management will not be able to effectively manage growth
    or any acquisition we may undertake.

The new and evolving nature of the electronic business relationship management
market increases these risks and uncertainties. Our limited operating history
makes it difficult to predict how our business will develop and our future
operating results.

WE HAVE A HISTORY OF LOSSES, WE MAY INCUR LOSSES IN THE FUTURE AND OUR LOSSES
MAY INCREASE BECAUSE OF OUR PLAN TO INCREASE OPERATING EXPENSES.

We have incurred net losses in each fiscal year since inception, except for the
year ended June 30, 1998, in which we had net income of approximately $4,000. In
the quarter ended September 30, 1999, we had a net loss of approximately
$686,000, and at September 30, 1999, we had an accumulated deficit of
approximately $8.1 million. We have increased our operating expenses in recent
periods and plan further increases in the future. Our planned increases in
operating expenses may result in larger losses in future periods. As a result,
we will need to generate significantly greater revenues than we have to date to
achieve and maintain profitability. We cannot assure you that our revenues will
increase. Our business strategies may not be successful, and we may not be
profitable in any future period.

THE MARKET FOR OUR PRODUCTS IS HIGHLY COMPETITIVE.

The market for our software is intensely competitive, fragmented and rapidly
changing. We face competition from companies in two distinct markets, the
electronic business relationship management software market and the electronic
commerce software market.

It is also possible that Microsoft Corporation may decide to introduce products
that compete with ours.

In addition, as we develop new products, particularly applications focused on
electronic commerce or specific industries, we may begin competing with
companies with whom we have not previously competed. It is also possible that
new competitors will enter the market or that our competitors will form
alliances that may enable them to rapidly increase their market share.

Some of our actual and potential competitors are larger, better established
companies and have greater technical, financial and marketing resources.
Increased competition may result in price reductions, lower gross margins or
loss of our market share, any of which could materially adversely affect our
business, financial condition and operating results.


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WE DEPEND UPON MICROSOFT AND THE CONTINUED ADOPTION AND PERFORMANCE OF THE
MICROSOFT WINDOWS NT AND MICROSOFT BACKOFFICE PLATFORMS.

We have designed our products to operate on the Microsoft Windows NT and
Microsoft BackOffice platforms. As a result, we market our products exclusively
to customers who have developed their computing systems around these platforms.
Our future financial performance will depend on continued growth in the number
of businesses that successfully adopt the Microsoft Windows NT and Microsoft
BackOffice computing platforms. The Microsoft Windows NT and Microsoft
BackOffice computing platforms face increasing competition, particularly from
platforms such as Unix and Linux, databases from companies such as Oracle and
Internet server software from companies such as Netscape. Acceptance of the
Microsoft Windows NT and Microsoft BackOffice platforms may not continue to
increase in the future. The market for software applications that run on these
platforms has in the past been significantly affected by the timing of new
product releases, competitive operating systems and enhancements to competing
computing platforms. If the number of businesses that adopt Microsoft Windows NT
and Microsoft BackOffice fails to grow or grows more slowly than we currently
expect, or if Microsoft delays the release of new or enhanced products, our
revenues from Pivotal Relationship and Pivotal eRelationship could be adversely
affected.

The performance of our products depends, to some extent, on the technical
capabilities of the Microsoft Windows NT and Microsoft BackOffice platforms. If
these platforms do not meet the technical demands of our products, the
performance or scalability of our products could be limited and, as a result,
our revenues from Pivotal Relationship and Pivotal eRelationship could be
adversely affected.

Federal and state regulatory authorities have recently initiated broad antitrust
actions against Microsoft. Any outcome to these actions that weakens the
competitive position of Microsoft Windows NT or Microsoft BackOffice would
adversely affect the market for our products.

THE MARKET FOR OUR SOLUTIONS IS NEW AND HIGHLY UNCERTAIN AND OUR PLAN TO FOCUS
ON INTERNET-BASED APPLICATIONS AND INTEGRATE ELECTRONIC COMMERCE FEATURES ADDS
TO THIS UNCERTAINTY.

The market for electronic business relationship management software is still
emerging and continued growth in demand for and acceptance of electronic
business relationship management products remains uncertain. Even if the market
for electronic business relationship management software grows, businesses may
purchase our competitors' products or develop their own. We believe that many of
our potential customers are not fully aware of the benefits of electronic
business relationship management solutions, and as a result, these solutions may
never achieve full market acceptance.

The development of our Internet-based Pivotal eRelationship applications for
electronic business relationship management and our plan to integrate additional
electronic commerce features with Pivotal eRelationship present additional
challenges and uncertainties. We are uncertain how businesses will use the
Internet as a means of communication and commerce and whether a significant
market will develop for Internet-based electronic business relationship
management applications such as Pivotal eRelationship. The use of the Internet
is evolving rapidly, and many companies are developing new products and services
that use the Internet. We do not know what forms of products and services may
emerge as alternatives to our existing products or to any future Internet-based
or electronic commerce features and services we may introduce. We have spent,
and will continue to spend, considerable resources educating potential customers
about our products and electronic business relationship management software
solutions in general. However, even with these educational efforts, market
acceptance of our products may not increase. If the markets for our products do
not grow or grow more slowly than we currently anticipate, our revenues may not
grow and may even decline.

We have announced our PivotalHost program whereby we will provide customers
access to our software applications on a monthly subscription basis over the
Internet through an application service provider. We do not know whether this
will prove to be a successful business model or if it will result in any
material revenue for the Company. If a majority of our new customers purchase
our products through the PivotalHost program, we


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may experience a significant change in our revenue recognition due to the
recognition of license revenue over the extended life of the contract rather
than revenue recognition at the date of purchase.

OUR SUCCESS WILL DEPEND UPON THE SUCCESS OF OUR TWO RELATED PRODUCTS, PIVOTAL
RELATIONSHIP AND PIVOTAL ERELATIONSHIP.

We anticipate that virtually all of our revenues and growth in the foreseeable
future will come from sales of Pivotal Relationship and Pivotal eRelationship
product licenses and related services. Accordingly, failure of either of these
products to gain increased market acceptance and compete successfully would
adversely affect our business, results of operations and financial condition.
Pivotal Relationship accounted for 83% of our revenues from licences for the
quarter ended September 30, 1999. Our future financial performance will depend
on our ability to succeed in the continued sale of licenses of Pivotal
Relationship and related services as well as the development of new versions and
enhancements of the product.

THE SUCCESS OF PIVOTAL ERELATIONSHIP WILL DEPEND UPON THE CONTINUED USE AND
EXPANSION OF THE INTERNET.

Increased sales of Pivotal eRelationship, and any future Internet-based
applications and electronic commerce features we integrate with it, will depend
upon the expansion of the Internet as a leading platform for commerce and
communication. If the Internet does not continue to become a widespread
communications medium and commercial marketplace, the demand for Pivotal
eRelationship could be significantly reduced, and Pivotal eRelationship and any
future Internet-based and electronic commerce features may not be commercially
successful. The Internet infrastructure may not be able to support the demands
placed on it by continued growth. The Internet could lose its viability due to
delays in the development or adoption of new equipment, standards and protocols
to handle increased levels of Internet activity, security, reliability, cost,
ease of use, accessibility and quality of service.

Other concerns that could inhibit the growth of the Internet and its use by
business as a medium for communication and commerce include:

o    concerns about security of transactions conducted over the Internet;

o    concerns about privacy and the use of data collected and stored
     recording interactions over the Internet;

o    the possibility that federal, state, local or foreign governments will
     adopt laws or regulations limiting the use of the Internet or the use of
     information collected from communications or transactions over the
     Internet; and

o    the possibility that governments will seek to tax Internet commerce.

OUR FUTURE REVENUE GROWTH COULD BE IMPAIRED IF WE ARE UNABLE TO EXPAND OUR
DIRECT SALES AND SUPPORT INFRASTRUCTURE.

Our future revenue growth will depend in large part on our ability to
successfully expand our direct sales force and our customer support capability.
We may not be able to successfully manage the expansion of these functions or to
recruit and train additional direct sales, consulting and customer support
personnel. There is presently a shortage of qualified personnel to fill these
positions. If we are unable to hire and retain additional highly skilled direct
sales personnel, we may not be able to increase our license revenue to the
extent necessary to achieve profitability. If we are unable to hire highly
trained consulting and customer support personnel we may be unable to meet
customer demands. We are not likely to be able to increase our revenues as we
plan if we fail to expand our direct sales force or our consulting and customer
support staff. Even if we are successful in expanding our direct sales force and
customer support capability, the expansion may not result in revenue growth.

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WE RELY ON OUR PIVOTAL ALLIANCE NETWORK OF INDEPENDENT COMPANIES TO SELL,
INSTALL AND SERVICE OUR PRODUCTS AND TO PROVIDE SPECIALIZED SOFTWARE FOR USE
WITH THEM, AND OUR PIVOTALHOST PROGRAM WILL RELY ON THIRD-PARTY APPLICATION
SERVICE PROVIDERS.

We do not have the internal implementation and customization capability to
support our current level of sales of licenses. Accordingly, we have established
and relied on our international network of independent companies we call the
Pivotal Alliance. Members of the Pivotal Alliance market and sell our products,
provide implementation and customization services, provide technical support and
maintenance on a continuing basis and provide us with software applications that
we can bundle with our solutions to address specific industry and customer
requirements. Approximately 30% of our revenues for the quarters ended September
30, 1999 and 1998, respectively were from sales made through third-party
resellers. Almost all of our customers retain members of the Pivotal Alliance to
install and customize our products. If we fail to maintain our existing Pivotal
Alliance relationships, or to establish new relationships, or if existing or new
members of the Pivotal Alliance do not perform to our expectations, our ability
to sell, install and service our products may suffer.

There is an industry trend toward consolidation of systems integrators that
implement, customize and maintain software solutions. Some of the systems
integrators in the Pivotal Alliance have engaged in discussions concerning
business consolidations. We are uncertain as to the effect that any
consolidation may have on our relationships with members of the Pivotal
Alliance.

Enterprise 360 is a consortium founded in 1998 to integrate and promote our
products as part of a turnkey electronic business relationship management
solution. The terms of our relationship with the members of the consortium have
not been formalized and are subject to change, and any of the members may
withdraw at any time. We have not generated a significant amount of revenues
through this relationship and do not know whether it will be successful.

The success of our PivotalHost program will depend on the commitment and
performance of third-party application service providers to successfully
implement and market services that incorporate our solutions. Likewise, the
success of our participation in the hosting program announced by Microsoft and
Cisco will depend on their continued commitment to the program and our
participation in it, and their success in implementing and marketing their
hosting program.

THE LOSS OF OUR CO-FOUNDERS OR OTHER KEY PERSONNEL OR OUR FAILURE TO ATTRACT AND
RETAIN ADDITIONAL PERSONNEL COULD ADVERSELY AFFECT OUR BUSINESS.

Our success depends largely upon the continued service of our executive officers
and other key management, sales and marketing and technical personnel. The loss
of the services of one or more of our executive officers or other key employees
could have a material adverse effect on our business, results of operations and
financial condition. In particular, we rely on our co-founders, Norman Francis,
President, Chief Executive Officer and director, and Keith Wales, our Chief
Technical Officer, Vice-President, Research and Development and director.
Messrs. Francis and Wales do not have employment agreements and, therefore,
could terminate their employment with us at any time without penalty. We have
key man insurance on the lives of Messrs. Francis and Wales in the amount of
Cdn.$1,000,000 each. However, this insurance would not sufficiently compensate
us for the loss of services of either Mr. Francis or Mr. Wales.

Our future success also depends on our ability to attract and retain highly
qualified personnel. The competition for qualified personnel in the computer
software and Internet markets is intense, and we may be unable to attract or
retain highly qualified personnel in the future. In addition, due to intense
competition for qualified employees, it may be necessary for us to increase the
level of compensation paid to existing and new employees to the degree that our
operating expenses could be materially increased.


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WE FACE RISKS FROM THE EXPANSION OF OUR INTERNATIONAL OPERATIONS.

We intend to substantially expand our operations outside the United States and
Canada. International operations are subject to numerous inherent potential
risks, including:

o        unexpected changes in regulatory requirements;

o        export restrictions, tariffs and other trade barriers;

o        changes in local tax rates or rulings by local tax authorities;

o        challenges in staffing and managing foreign operations, differing
         technology standards, employment laws and practices in foreign
         countries;

o        less favorable intellectual property laws;

o        longer accounts receivable payment cycles and difficulties in
         collecting payments;

o        political and economic instability; and

o        fluctuations in currency exchange rates and the imposition of currency
         exchange controls.

Any of these factors could have a material adverse effect on our business,
financial condition or results of operations.

Our international expansion will require significant management attention and
financial resources. We will have to significantly enhance our direct and
indirect international sales channels and our support and services capabilities.
We may not be able to maintain or increase international market demand for our
products. We may not be able to sustain or increase international revenues from
licenses or from consulting and customer support.

In some foreign countries we rely on selected solution providers to translate
our software into local languages, adapt it to local business practices and
complete installations in local markets. We are highly dependent on the ability
and integrity of these solution providers, and if any of them should fail to
properly translate, adapt or install our software, our reputation could be
damaged and we could be subjected to liability. If any of these solution
providers should fail to adequately secure our software against unauthorized
copying, our proprietary software could be compromised.

FLUCTUATIONS IN EXCHANGE RATES BETWEEN THE UNITED STATES DOLLAR AND THE CANADIAN
DOLLAR OR UNITED KINGDOM POUND STERLING MAY AFFECT OUR OPERATING RESULTS.

Substantially all of our revenues and corresponding receivables are in United
States dollars. However, a majority of our research and development expenses,
customer support costs and administrative expenses are in Canadian dollars. We
also are investing in our international operations resulting in increased future
operating expenses in United Kingdom pound sterling. We are exposed to
fluctuations in the exchange rates between the United States dollar and the
Canadian dollar and the United States dollar and the United Kingdom pound
sterling through our operations in Canada and United Kingdom, respectively. In
the quarter ended March 31, 1999, we adopted a hedging policy intended to reduce
the effects of these fluctuations on our results of operations. As part of our
hedging policy, we identify our future Canadian currency requirements related to
payroll costs, capital expenditures and operating lease commitments, and
purchase forward exchange contracts at the beginning of an operational period to
cover these currency needs. The operational period for our contracts is
generally limited to one quarter. If our actual currency requirements differ
materially from our hedged position during periods of currency volatility, or if
we do not continue to hedge our Canadian currency commitments, we could
experience unanticipated currency gains or losses.

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Our hedging policy subjects us to risks relating to the creditworthiness of the
commercial banks that we contract with in our hedging transactions. If one of
these banks cannot honor its obligations, we may suffer a loss.

The purpose of our hedging policy is to reduce the effect of exchange rate
fluctuations on our results of operations. Therefore, while our hedging policy
reduces our exposure to losses resulting from unfavorable changes in currency
exchange rates, it also reduces or eliminates our ability to profit from
favorable changes in currency exchange rates.

WE HAVE EXPERIENCED RAPID GROWTH WHICH HAS PLACED A STRAIN ON OUR RESOURCES, AND
ANY FAILURE TO MANAGE OUR GROWTH EFFECTIVELY COULD CAUSE OUR BUSINESS TO SUFFER.

We have been expanding our operations rapidly and intend to continue this
expansion for the foreseeable future. The number of our employees increased from
70 on June 30, 1997 to 309 on September 30, 1999. This expansion has placed, and
is expected to continue to place, a significant strain on our managerial,
operational and financial resources as we integrate and manage new employees,
more locations and more customer, supplier and other business relationships. In
the past we have decided to, and in the future we may need to, improve or
replace our existing operational and customer service systems, procedures and
controls. Any failure by us to properly manage our growth or these systems and
procedural transitions could impair our ability to efficiently manage our
business, to maintain and expand important relationships with members of the
Pivotal Alliance and other third parties and to attract and service customers,
and could cause us to incur higher operating costs and delays in the execution
of our business plan or in the reporting or tracking of our financial results.

WE MAY SEEK TO GROW BY MAKING ACQUISITIONS, BUT WE HAVE NEVER ACQUIRED ANOTHER
BUSINESS AND WE MAY NOT BE ABLE TO SUCCESSFULLY COMPLETE ANY ACQUISITIONS WE
UNDERTAKE OR INTEGRATE ANY ACQUIRED BUSINESS OR PRODUCTS WITH OUR OWN.

As a part of our business strategy we may seek to grow by acquiring businesses,
products or technologies or establishing joint ventures that we believe will
complement our current or future business. We have never acquired another
business. We may not effectively select acquisition candidates or negotiate or
finance acquisitions or integrate the acquired businesses and their personnel or
acquired products or technologies into our business. We cannot assure you that
we can complete any acquisition we pursue on favorable terms, or that any
acquisition we complete will ultimately benefit our business.

OUR SALES CYCLE IS LONG AND SALES DELAYS COULD CAUSE OUR OPERATING RESULTS TO
VARY WIDELY.

We believe that an enterprise's decision to purchase a electronic business
relationship management system is discretionary, involves a significant
commitment of its resources and is influenced by its budget cycles. To
successfully sell licenses for our products, we typically must educate our
potential customers regarding the use and benefits of electronic business
relationship management software in general and our solutions in particular,
which can require significant time and resources. Consequently, the period
between initial contact and the purchase of licenses for our products is often
long and subject to delays associated with the lengthy budgeting, approval and
competitive evaluation processes that typically accompany significant capital
expenditures. We frequently must invest substantial resources to develop a
relationship with a potential customer and educate its personnel about our
products and services with no guarantee that our efforts will be rewarded with a
sale. Our sales cycles are lengthy and variable, typically ranging between two
and six months from our initial contact with a potential customer to the signing
of a license agreement, although sales sometimes require substantially more
time. Sales delays could cause our operating results to vary widely.


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OUR PLAN TO EXPAND OUR SERVICE CAPABILITY COULD ADVERSELY AFFECT GROSS PROFIT
MARGINS AND OPERATING RESULTS,

Revenues from services and maintenance have lower gross margins than revenues
from licenses, therefore an increase in the percentage of revenues generated
from services and maintenance as compared to revenues from licenses will lower
our overall gross margins. In addition, an increase in the cost of revenues from
services and maintenance as a percentage of revenues from services and
maintenance could have a negative impact on overall gross margins.

Although margins related to revenues from services and maintenance are lower
than margins related to revenues from licenses, our services organization
currently generates gross profits, and we are seeking to expand our service
capability and our revenues from services and maintenance.

Revenues from services and maintenance depend in part on renewals of technical
support contracts by our customers, some of which may not renew their technical
support contracts. Our ability to increase revenues from services and
maintenance will depend in large part on our ability to increase the scale of
our services organization, including our ability to successfully recruit and
train a sufficient number of qualified services personnel. We may not be able to
do so.

To meet our expansion goals, we expect to hire additional services personnel. If
demand for our services organization does not increase in proportion to the
number of additional personnel we hire, gross profits could fall, or we may
incur losses from our services activities. In addition, the costs of delivering
services could increase, and any material increase in these costs could reduce
or eliminate the profitability of our services activities.

WE RELY ON SOFTWARE LICENSED TO US BY THIRD-PARTIES FOR FEATURES WE INCLUDE IN
OUR PRODUCTS.

We incorporate into our products software that is licensed to us by third-party
software developers including Microsoft's SQL Server 7.0, Sheridan Calendar
Control, InstallShield 3 and Seagate Crystal Reports. We are seeking to further
increase the capabilities of our products by licensing additional applications
from third parties. A significant interruption in the availability of any of
this licensed software could adversely affect our sales, unless and until we can
replace this software with other software that performs similar functions.
Because our products incorporate software developed and maintained by third
parties, we depend on these third parties' abilities to deliver and support
reliable products, enhance their current products, develop new products on a
timely and cost-effective basis, and respond to emerging industry standards and
other technological changes. If third-party software offered now or in the
future in conjunction with our products becomes obsolete or incompatible with
future versions of our products, we may not be able to continue to offer some of
the features we presently include in our products unless we can license
alternative software or develop the features ourselves.

WE MUST CONTINUE TO DEVELOP ENHANCEMENTS TO OUR PRODUCTS AND NEW APPLICATIONS
AND FEATURES THAT RESPOND TO THE EVOLVING NEEDS OF OUR CUSTOMERS, RAPID
TECHNOLOGICAL CHANGE AND ADVANCES INTRODUCED BY OUR COMPETITORS.

The software market in which we compete is characterized by rapid change due to
changing customer needs, rapid technological changes and advances introduced by
competitors. Existing products become obsolete and unmarketable when products
using new technologies are introduced and new industry standards emerge. New
technologies could change the way electronic business relationship management
products are sold or delivered. As a result, the life cycles of our products are
difficult to estimate. We also may need to modify our products when third
parties change software we integrate into our products.

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To be successful we must continue to enhance our current product line and
develop new applications and features. For example, we have announced our
PivotalHost program of delivering electronic business relationship management
solutions through application service providers on a monthly subscription basis.

We may not be able to successfully develop or license the applications necessary
to offer these or other features, or to integrate these applications with our
existing products. We have delayed enhancements and new product release dates
several times in the past and may not be able to introduce new products, product
enhancements, new applications or features successfully or in a timely manner in
the future. If we delay release of our new products or product enhancements or
new applications or features or if they fail to achieve market acceptance when
released, we may not be able to keep up with the latest developments in the
market and our revenues may fall. We may not be able to respond effectively to
customer needs, technological changes or advances introduced by our competitors,
and our products could become obsolete.

WE MAY BE UNABLE TO ADEQUATELY PROTECT OUR PROPRIETARY RIGHTS.

Our success depends in part on our ability to protect our proprietary software
and our other proprietary rights from copying, infringement or use by
unauthorized parties. To protect our proprietary rights we rely primarily on a
combination of copyright, trade secret and trademark laws, confidentiality
agreements with employees and third parties, and protective contractual
provisions such as those contained in license agreements with consultants,
vendors and customers, although we have not signed these types of agreements in
every case. Despite our efforts to protect our proprietary rights, unauthorized
parties may copy aspects of our products and obtain and use information that we
regard as proprietary. Other parties may breach confidentiality agreements and
other protective contracts we have entered into. We may not become aware of, or
have adequate remedies in the event of, these types of breaches or unauthorized
activities.

CLAIMS BY OTHER COMPANIES THAT OUR PRODUCTS INFRINGE THEIR COPYRIGHTS OR PATENTS
COULD ADVERSELY AFFECT OUR ABILITY TO SELL OUR PRODUCTS AND INCREASE OUR COSTS.

If any of our products violates third-party proprietary rights, including
copyrights and patents, we may be required to reengineer our products or obtain
licenses from third parties to continue offering our products without
substantial reengineering. Although some of our current and potential
competitors have sought patent protection for similar electronic business
relationship management systems, we have not sought patent protection for our
solutions. If a patent has been issued or is issued in the future to a
third-party that prevents us from using technology included in our products, we
would need to obtain a license or re-engineer our product to function without
infringing the patent. Any efforts to re-engineer our products or obtain
licenses from third parties may not be successful and, in any case, could
substantially increase our costs, or force us to interrupt product sales or
delay product releases.

OUR PRODUCTS AND PRODUCTS WE RELY ON MAY SUFFER FROM DEFECTS OR ERRORS.

Software products as complex as ours may contain errors or defects, especially
when first introduced or when new versions are released. We have had to delay
commercial release of some versions of our products until software problems were
corrected, and in some cases have provided product enhancements to correct
errors in released products. Our new products and product enhancements or new
applications or features may not be free from errors after commercial shipments
have begun. Any errors that are discovered after commercial release could result
in loss of revenues or delay in market acceptance, diversion of development
resources, damage to our reputation, increased service and warranty costs and
liability claims.

Our end-user licenses contain provisions that limit our exposure to product
liability claims, but these provisions may not be enforceable in all
jurisdictions. In some cases, we have been required to waive these contractual
limitations. Further, we may be exposed to product liability claims in
international jurisdictions where our solution provider has supplied our
products and negotiated the license without our involvement. A successful
product liability claim could result in material liability and damage to our
reputation.

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In addition, products we rely on, such as Microsoft platform products, may
contain defects or errors. Our products rely on these products to operate
properly. Therefore, any defects in these products could adversely affect the
operation of and market for our products, reduce our revenues, increase our
costs and damage our reputation.


IF OUR CUSTOMERS' SYSTEM SECURITY IS BREACHED, OUR BUSINESS AND REPUTATION COULD
SUFFER.

A fundamental requirement for online communications is the secure transmission
of confidential information over the Internet. Users of our products transmit
their and their customers' confidential information over the Internet. In our
license agreements with our customers, we disclaim responsibility for the
security of confidential data and have contractual indemnities for any damages
claimed against us. However, if unauthorized third parties are successful in
obtaining confidential information from users of our products, our reputation
and business may be damaged and, if our contractual disclaimers and indemnities
are not enforceable, we may be subjected to liability.

CHANGES IN ACCOUNTING STANDARDS AND IN THE WAY WE CHARGE FOR LICENSES COULD
AFFECT OUR FUTURE OPERATING RESULTS.

We recognize revenues from the sale of software product licenses on delivery of
our products if:

o  persuasive evidence of an arrangement exists,

o  the fee is fixed and determinable,

o  we can objectively allocate the total fee among all elements of
   the arrangement, and

o  collection of the license fee is probable.

In July 1999, we began to offer licensing arrangements in which our customer
purchases a license for a fixed or indefinite term and agrees to pay for the
license with periodic payments rather than in a lump sum. We plan to recognize
revenues from these arrangements as the periodic payments become due provided
the other conditions for revenue recognition are met. If these arrangements
become popular with our customers, we may have lower revenues in the short term
than we otherwise would, because revenues for licenses sold under these
arrangements will be recognized over time rather than upon delivery of our
product.

We recognize maintenance revenues ratably over the contract term, typically one
year, and recognize revenues for consulting, education and implementation and
customization services as the services are performed.

Statement of Position 97-2, "Software Revenue Recognition," was issued in
October 1997 by the American Institute of Certified Public Accountants and
amended by Statement of Position 98-4. We adopted Statement of Position 97-2
effective January 1, 1998. The American Institute of Certified Public
Accountants has also issued Statement of Position 98-9, which is effective for
us for transactions entered into beginning January 1, 2000. However, full
implementation guidelines for this standard have not yet been issued. Once
available, these implementation guidelines could lead to unanticipated changes
in our current revenue accounting practices.

Accounting standard setters, including the Securities and Exchange Commission
and the Financial Accounting Standards Board, are also reviewing the accounting
standards related to business combinations and stock-based compensation.

Any changes to these accounting standards or any other accounting standards or
the way these standards are interpreted or applied could require us to change
the manner in which we recognize revenue or the way we account for share
compensation or for any acquisition we may pursue or other aspects of our
business, in a manner that could adversely affect our reported financial
results.


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