UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM 10-K

[X]  ANNUAL REPORT  PURSUANT TO SECTION 13 OR 15(d) OF THE  SECURITIES  EXCHANGE
     ACT OF 1934 For the Fiscal year ended September 30, 1996

                                       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: 0-132-58

                              BOOLE & BABBAGE, INC.
             (Exact name of registrant as specified in its charter)

  Delaware                                                94-1651571
  (State or other jurisdiction of                         (I.R.S. Employer
  incorporation or organization)                          Identification No.)

                    3131 Zanker Road, San Jose, CA 95134-1933
                    (Address of principal executive offices)

Registrant's telephone number, including area code: (408) 526-3000

Securities registered pursuant to Section 12(b) of the Act:  None

Securities registered pursuant to Section 12(g) of the Act:   Common Stock, 
                                                              $.001 par value 
                                                              (Title of Class)

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 [ ]

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 registrant's  knowledge,  in definitive proxy or information  statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

The  aggregate  market  value  of  voting  stock  held by  nonaffiliates  of the
registrant,  based upon the average  bid and asked price of the Common  Stock on
November 29, 1996, was approximately  $289,241,887.  Shares of Common Stock held
by each  officer and  director  have been  excluded  because such persons may be
deemed  to  be  affiliates.  This  determination  of  affiliate  status  is  not
necessarily a conclusive determination for other purposes.

The number of shares  outstanding of the  registrant's  Common Stock on November
29, 1996 was 17,003,856.

                       DOCUMENTS INCORPORATED BY REFERENCE

1. Portions of Annual Report to Stockholders for fiscal year ended September 30,
1996 - Items 5, 6, 7, 8 and 14.

2. Portions of Proxy Statement dated January 15, 1997 - Items 10, 11, 12 and 13.

<PAGE>

                              BOOLE & BABBAGE, INC.
                                    FORM 10-K
                          YEAR ENDED SEPTEMBER 30, 1996
                                Table of Contents

Item
Number                                                                     Page
------                                                                     ----
                                     PART I

 1. Business ..............................................................  1

 2. Properties ............................................................  6

 3. Legal Proceedings .....................................................  6

 4. Submission of Matters to a Vote of Security Holders ...................  6

                                     PART II

 5. Market for the Registrant's Common Stock and Related
    Stockholder Matters ...................................................  7

 6. Selected Consolidated Financial Data ..................................  7

 7. Management's Discussion and Analysis of Financial Condition and
    Results of Operations .................................................  7

 8. Financial Statements and Supplementary Data ...........................  7

 9. Changes in and Disagreements with Accountants on Accounting and
    Financial Disclosure ..................................................  7

                                    PART III

10. Directors and Executive Officers of the Registrant ....................  8

11. Executive Compensation ................................................  8

12. Security Ownership of Certain Beneficial Owners and Management ........  8

13. Certain Relationships and Related Transactions ........................  8

                                     PART IV

14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K ......  9


Signatures ................................................................ 12


<PAGE>

                                     PART I


ITEM 1.  BUSINESS

General

Boole & Babbage,  Inc.  (hereinafter  "Boole & Babbage"  or the  "Company")  was
founded in 1967. Boole & Babbage is an independent software vendor that develops
and markets enterprise  automation  software solutions for managing  distributed
computer systems in multivendor, multiplatform computing environments.

The  Company's  products are used by  information  systems  professionals  whose
organizations  rely on the performance of their  computing  resources to conduct
business.  Boole & Babbage  is  committed  to the  quality of the  products  and
services it provides to its  customers and  continually  invests in research and
development to maintain the quality of its software products.

See Note 7 of Notes to Consolidated  Financial  Statements for certain financial
information with respect to the Company's foreign operations.

Market

Over the last 25 years,  systems  management has evolved from simply  monitoring
resource usage in a single  mainframe to automated  management of  client/server
applications  across  the  information  system  enterprise.  This  includes  the
monitoring and management of mainframes, servers, networks and applications from
disparate vendors across a myriad of platforms.

The explosive growth of computing resources  throughout the enterprise poses new
challenges for systems management.  Organizations are increasingly  dependent on
information systems for their  moment-to-moment  operations.  If systems fail to
deliver  service to the internal end user,  there can be an immediate  impact on
external customers and the bottom line.

Applications become increasingly complex as they support more business functions
and are  distributed  across the  enterprise  on  downsized  platforms.  Today's
computing environment includes mainframes, minicomputers,  workstations and LANs
spread throughout the organization

Along  with the task of  supporting  this  complex,  mission-critical  resource,
corporate MIS departments are under continuous  pressure to reduce all the costs
associated with information systems and their management -- hardware,  software,
networks and personnel.

The growing  diversity of the enterprise  computing  environment  contributes to
other  features  of the  current  market.  While  IBM's  dominance  of  the  MIS
organization  is  eroding,   customers  are  concerned  with  protecting   their
investment in their information  systems.  This in turn is driving the emergence
of often  conflicting  standards  for systems  management,  such as SNMP DCE and
various emerging  object-oriented  strategies like CORBA,  OLE, DSOM, etc. In an
effort  to  reduce  training  costs  and  increase  efficiencies,   there  is  a
customer-driven  trend  toward  consolidating  the  installed  vendor  base  and
standardizing on as few products as possible.

Despite recent  acquisitions,  a smaller field of software vendors has been slow
to deliver  significant  integration  among  system  management  tools while the
market continues to demand out-of-the-box interoperability of diverse products.



                                       1
<PAGE>

In the  face  of  these  market  dynamics,  traditional  approaches  to  systems
management  --  which  focus  on  managing  discrete  components  such as  CPUs,
subsystems,  devices  and  networks  -- cannot  meet the  challenge  of managing
service levels for complex distributed systems.

Boole & Babbage  is focused  on  delivering  the next  generation  of  automated
systems management products needed to respond to these challenges.


Product Strategy:   Multiplatform Approach with Enterprise Automation

Boole & Babbage Enterprise  Automation strategy focuses on the business needs of
large   companies   with  strategic   development  of  distributed   information
technologies. Boole & Babbage delivers a comprehensive solution aimed at helping
customers  gain  proactive  command and control of their  distributed  computing
environment  - from the  mainframe to the  desktop.  Entire  enterprises  can be
managed  and  automated  from  a  central  point-of-control,  regardless  of the
devices, operating systems, network standard and platforms it contains.

Boole &  Babbage  Enterprise  Automation  is an open  solution  --  without  any
boundaries  to the type of IT components  that can be reached.  If an enterprise
has SNMP- and  CMIP-managed  equipment  or is  committed  to one of the  leading
Frameworks  from  IBM,  HP or SUN,  then  Enterprise  Automation  fits  with and
complements the customer  standard or framework  instead of requiring  extensive
changes.    The   Company's   products   accept   any   type   of   alert   from
non-standard-conforming   environments   such  as  legacy   network   equipment,
environmental systems and/or older midrange systems and allow for implementation
through ready-to-use knowledge bases.

COMMAND/POST:   Enterprise   Central  Control  for  Comprehensive   Availability
Management

COMMAND/POST functions as a central point-of-control for managing and automating
all enterprise computers,  networks, and applications. It is integrated with all
the Boole & Babbage  product lines like Ensign and MainView  products as well as
many of the leading help desk problem management products and frameworks such as
HP OpenView and IBM  SystemView.  COMMAND/POST  uses a combination of agent- and
message-based  capabilities  to extend reach and scalability to any level of the
enterprise.

COMMAND/POST finds problems and pinpoints the actual causes of enterprise system
failures,  triggers rapid corrective actions,  interacts with problem management
systems and even escalates problem resolution to the appropriate level to insure
rapid  restoration of service.  It targets and solves  network  problems such as
node failures or the  rerouting of data over a  less-congested  path.  Customers
gain  increases in  application  availability  while  limiting  required  manual
intervention by system management professionals.

By bringing  information about the enterprise to a central console,  operational
staffing  requirements  are  reduced,  freeing up resources  for more  strategic
functions  while  the  overall  control  of  the  complex   information   system
infrastructure is enhanced.  In the last three years,  COMMAND/POST emerged as a
valuable  tool for  centralized,  proactive  Help  Desk  management,  an area of
renewed focus for corporate  enterprises.  And through  partnerships  with other
market leaders such as HP, IBM, and SUN, COMMAND/POST has gained wide acceptance
as the system integrator for various point solutions.  These partnerships insure
COMMAND/POST  users the  benefits of  integrated,  complementary  products  from
customers' preferred vendors.


                                       2
<PAGE>


COMMAND/POST provides:

        Immediate improvements in availability and performance through automated
        recovery  and failure  prevention  across  WANs,  LANs,  mainframes  and
        minicomputers.

        Low-cost  implementation of connectivity through packaged interfaces and
        tools for message and alert filtering.

        An open architecture through interfaces to virtually any device.

        Increased operator productivity through console and alert consolidation,
        a  graphical  interface  and  graphical  representations  of  enterprise
        configuration.

        Customization of data presentation on the UNIX workstation.


Ensign:  Intelligent  Agent  Extension for  COMMAND/POST  Event  Management  and
Automation

Ensign  intelligent  agents for UNIX,  NetWare,  and NT can  insure the  correct
functioning  of  distributed  client server  applications  and apply  corrective
actions.  By distributing  knowledge down into the servers,  Ensign  intelligent
agents increase the scalability of the Enterprise Automation solution and insure
that only severe non-locally-solvable  problems are reported both locally and to
the COMMAND/POST central  point-of-control.  Ensign agents also filter important
alarm information to leading frameworks like HP OpenView and IBM SystemView.  In
addition  to  availability  management,  Ensign  provides  an  extensive  set of
administration  applications  including User, File,  Security and Storage backup
and recovery management and via a set of partnerships can be extended to address
software distribution and workload management.  All Ensign functions can work in
concert with COMMAND/Post or standalone in centralized  and/or  distributed mode
to  fit  the   management   philosophy  of  the  customer   distributed   system
organization.

The Ensign  products have  architectural  advantages over other offerings on the
market.  Ensign  products  require no  modification  to the UNIX kernel ensuring
smooth  acceptance of UNIX  upgrades,  interoperability  with other  application
software  and  easy  portability  to the  different  (13)  versions  of the UNIX
operating system. Additionally,  Ensign installs and is operational in less than
one hour.


MainView:  Mainframe  and Parallel Sysplex Server Management.

The Boole & Babbage integrated  MainView family of products provides  automation
and performance management for the IBM S/390 servers,  ES/9000 series processors
and to the CMOS based highly Parallel Sysplex servers. MainView products provide
flexibility  and  efficiency  in data  collection  across  multiple  MVS systems
including Sysplex environments.  On a single screen,  application-focused  views
help insure service and availability goals are being met across the enterprise.

In the  mainframe  area,  IBM has  announced  several  aggressive  and strategic
initiatives,  destined to position  the MVS  operating  system as an  enterprise
server  operating  system.  With the  introduction  of the  System/390  Parallel
processors,  which essentially reproduce the MVS operating system on a chip, IBM
has  given an  indication  of its plan to  accommodate  market  demand  for more
efficient parallel processors.

Customers will benefit from greater  efficiency and cost reduction with parallel
processors,  however,  they will also be faced  with an  attendant  increase  in
system  complexity.  Boole &  Babbage  was the  first  software  vendor to offer
products  specifically  designed to handle the systems  management  needs of the
Parallel Sysplex environment.

                                       3
<PAGE>

The  Company's  mainframe  products  operate  only with  certain  IBM  operating
systems.  IBM has often modified or changed its operating systems and introduced
new computer  systems.  The Company  believes that IBM's  successive  operations
systems and mainframe  architectures have been and will be designed to allow IBM
customers to enhance their systems and use new software as well as to modify and
use their existing software.  The Company must adapt its products to accommodate
these IBM  changes in order to license  its  products  to new  customers  and to
obtain maintenance contracts from existing customers.

Boole & Babbage  works  closely  with IBM to ensure that its  products  are kept
current with their product releases. The companies exchange information and work
cooperatively  to ensure  consistent  service to their  mutual  customers.  This
relationship  also  extends  to a joint  development  partnership  which the two
companies  formalized  in  January  1991,  and by the  fact  that  IBM is also a
customer  and user of Boole & Babbage  products.  Under the  agreement,  Boole &
Babbage and IBM are jointly designing and developing systems management products
for the CICS transaction processing environment.

While it is not anticipated that parallel  processors will  immediately  replace
all  traditional  mainframes,   Boole  &  Babbage  is  well-positioned  for  the
coexistence  of both types of processors  as they evolve to new roles.  In fact,
many large firms are investing in Boole & Babbage Sysplex-ready  products now in
order to prepare their system management  infrastructure for a smooth transition
to  parallel  processors.  The  flexibility  of  the  MainView  architecture  is
beneficial  in  both  a  parallel  processing  environment  and  in  traditional
mainframe  computing by making it possible to group resource  activities in ways
that are meaningful to a particular business.

Storage Management and Automation

Boole & Babbage  sells  products  that  address the control  and  automation  of
mainframe and client/sever disk (DASD) storage subsystems.

The ProSMS suite of integrated MVS software products provide advanced  automated
management capabilities.  ProSMS consists of product components that address key
storage  management  areas such as dynamic abend  recovery,  migration to system
managed storage, storage usage, administration and reporting.

The company also sells a number of products from independent  software  vendors;
these  third-party  products  complement the Enterprise  Automation  strategy by
adding  applications such as Scheduling,  Tape, Output and Printing  management,
JCL management,  Desktop to Mainframe  Connectivity etc. The following companies
provide products for the European and international market: Diversified Software
Systems,  Inc.,  New  Dimension  Software,  Simware,  Inc.,  and  Tone  Software
Corporation.

MainView,  COMMAND/POST,  BBI,  AutoCOMMAND and Ensign are trademarks of Boole &
Babbage,  Inc. IBM is a registered trademark of International  Business Machines
Corporation.  MVS,  CICS,  IMS, DB2,  NetView and  SystemView  are trademarks of
International Business Machines Corporation.

Customer Support and Product Maintenance

The Company offers product maintenance,  which includes maintenance and updating
of product  capabilities  to  accommodate  changes in a customer's  hardware and
software. An initial period, ranging from six months to one year, of maintenance
is included in all of the Company's software licenses.  Thereafter,  the Company
offers optional  maintenance renewals at prices that generally range from 15% to
20% annually of the current product price.  The Company also provides  extensive
computer-supported  problem  solving  capabilities  over the  telephone  for its
customers as part of their  maintenance  contracts.  The Company  believes  that
support of its  customers  and products is very  important,  and it  continually
attempts to improve its support  systems and techniques.  The Company's  current
annual maintenance cancellation rate is approximately 10%.


                                       4
<PAGE>


Consulting, Education and Computer Services

Consulting and  educational  services with regard to the  application of Boole &
Babbage  products  are  provided  to  customers  on a fee basis.  The  Company's
computer  services  division  provides   mainframe   computing   services  on  a
time-sharing basis to corporate affiliates and non-affiliates.


Marketing and Customers

The  Company  sells  its  products  domestically  through  its own  distribution
division,  Boole & Babbage North America.  In Europe, the Company's products are
sold through its European  subsidiary,  Boole & Babbage Europe. In areas outside
of North America and Europe,  the Company has a wholly-owned  sales  subsidiary,
Boole & Babbage  Australasia Pty. Ltd, in Australia and a  majority-owned  sales
subsidiary,  Joint Systems & Technology,  in Japan. In addition to its own sales
staff, the Company has agreements with several independent  marketing agents who
serve  international  markets in which the  Company  has not  established  sales
offices.

The process of configuring the Company's  products to meet the specific hardware
and  software  requirements  of the  environments  in which they will be used is
rapid;  consequently,  shipments are generally  made within one week of the time
the order is  received.  In  addition,  the  Company  offers its  customers  the
opportunity to use its products on a trial basis such that upon final acceptance
by the customer, full installation has already been completed.  Accordingly, the
Company has no significant backlog of orders at any time.

The  Company's   customers  are  generally   large   corporate  and   government
organizations  including  industrial  companies,   commercial  banks,  insurance
companies,   communications  companies,  retailers,   transportation  companies,
utilities,  health care and  educational  institutions,  and federal,  state and
local  governments.  No customer  accounts for greater than 10% revenue in 1996,
1995 or 1994.

The Company's  commitment to customer  satisfaction  and service is reflected in
its policies regarding day-to-day operations and product maintenance, as well as
in its efforts to establish forums for customer interaction and dialogue.

Boole & Babbage has more than 12,500 products installed at more than 5,000 sites
worldwide.  In each of the last  three  fiscal  years,  a large  portion  of the
Company's product revenue was from additional licensing by existing customers of
either new products or products for additional sites.


Research and Development

The  computer  hardware  and  software  industries  are  characterized  by rapid
technological change, which requires a continuing high level of expenditures for
the  development  and  maintenance  of software  products.  It is customary  for
modifications  to be made to a software product as experience with its use grows
or as changes in  manufactures'  hardware and  software so require.  In 1995 the
Company  reinvested 16% of its Boole product revenues in R&D activities aimed at
both enhancing the existing  products and adding several new ones. R&D costs net
of amounts  capitalized  were  $17,819,000,  $15,650,000 and $13,485,000 for the
years ended September 30, 1996, 1995 and 1994, respectively.


                                       5
<PAGE>

Competition

The computer  software industry is highly  competitive.  There are several large
software  vendors  that  have  substantially  greater  financial  and  technical
resources  than the  Company;  in the future,  these  companies  may develop and
market  products  similar  to  those  offered  by Boole &  Babbage.  Competitive
products are currently  offered by a number of independent  software  companies.
The  most  important   consideration  for  customers  of  performance   capacity
management,  automated  operations,  and network management software are product
and product line capability,  integration, on-going product enhancement, ease of
installation   and  use,   reliability   and  quality  of   technical   support,
documentation and training,  name recognition,  vendor experience and stability,
and, to a lesser extent,  price. The Company believes that it competes favorably
in these areas.

Product Protection

The Company  relies on a combination  of contract,  patent,  copyright and trade
secret  laws,  as well as various  other  measures,  to protect  its rights with
respect  to  its  software  products.   The  Company  seeks  protection  of  its
proprietary  interest in its  products  and trade  secrets and holds  registered
related  documentation.  The company does not believe that any single  contract,
patent,  or copyright  or trademark is material to its business as a whole.  The
Company  does not sell or  transfer  title to its  products  to  customers.  The
products are licensed on a "right-to-use" basis pursuant to a perpetual license,
which is  nontransferable  and restricts  use of the products to the  customer's
internal purposes on specified computers at specified sites.

Employees

As of November  30, 1996 Boole & Babbage  employed  approximately  780  persons,
including  sales,  marketing and related  activities;  product  development  and
customer support;  management,  administration  and finance.  Of such employees,
approximately  473 are employed in the United States and  approximately  307 are
employed in foreign countries.  The Company believes that its employee relations
are good.

Subsequent Event

During  December  1996,  Boole & Babbage  agreed to acquire,  subject to certain
conditions,  all of the  outstanding  capital stock of MAXM Systems  Corporation
("MAXM") in exchange  for  approximately  1.2 million  shares of Boole & Babbage
common  stock.  Boole & Babbage  anticipates  that there  will be a  significant
charge in connection with this  acquisition when the transaction is completed in
the quarter ending March 31, 1997.

ITEM 2.  PROPERTIES

Boole & Babbage's principal administrative,  marketing, research and development
and support  groups are located in one  facility in San Jose,  California.  This
facility is occupied  under a lease that expires on March 31, 2000.  The Company
believes  that this facility is adequate for its current needs and that suitable
additional  or  substitute  space  will be  available  as needed to  accommodate
physical expansion of the Company's operations.  In addition, the Company leases
several sales and service facilities throughout North America, Europe, Japan and
Australia under leases that expire on dates ranging through 2018.

ITEM 3.  LEGAL PROCEEDINGS

     Not applicable.

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

No  matters  were  submitted  to a vote of  security  holders  during the fourth
quarter ended September 30, 1996.


                                       6
<PAGE>

                                     PART II


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

     The information  contained  under the caption "Market for the  Registrant's
Common  Stock and  Related  Stockholder  Matters"  on page 20 of the 1996 Annual
Report to Stockholders is incorporated herein by reference.


ITEM 6.  SELECTED CONSOLIDATED FINANCIAL DATA

     The  information  contained  under  the  caption,   "Selected  Consolidated
Financial  Data"  in  the  1996  Annual  Report  to  Stockholders  on  page 1 is
incorporated herein by reference.


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

     The information contained under the caption,  "Management's  Discussion and
Analysis of Financial  Condition and Results of  Operations"  in the 1996 Annual
Report to Stockholders on pages 3 - 8 is incorporated herein by reference.



ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     Consolidated  financial statements for Boole & Babbage,  Inc. are contained
on pages 9 - 12 of the 1996 Annual Report to Stockholders  and are  incorporated
herein  by  reference.  Supplementary  data is  contained  on page 1 of the 1996
Annual Report to Stockholders and is incorporated herein by reference.



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

     Not applicable.



                                       7
<PAGE>

                                    PART III


ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     The information  required by this Item is incorporated  herein by reference
to the  Company's  Proxy  Statement  dated  January 15, 1997 under the  captions
"Proposal 1" and "Additional Information."


ITEM 11. EXECUTIVE COMPENSATION

     The information  required by this Item is incorporated  herein by reference
to the  Company's  Proxy  Statement  dated  January 15, 1997 under the  captions
"Proposal 1," "Executive  Compensation," "Stock Option Grants and Exercises" and
"Compensation Committee Report."


ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

     The information  required by this Item is incorporated  herein by reference
to the  Company's  Proxy  Statement  dated  January  15,  1997 under the caption
"Security Ownership of Management and Principal Stockholders."


ITEM 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     The information  required by this Item is incorporated  herein by reference
to the  Company's  Proxy  Statement  dated  January  15,  1997 under the caption
"Certain Transactions."


                                       8
<PAGE>

                                     PART IV

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

(a)    The following documents are filed as a part of this Report:

       1.     Financial  Statements.   The  following   Consolidated   Financial
              Statements  of Boole & Babbage,  Inc.  and  Report of  Independent
              Auditors are incorporated by reference to Registrant's 1996 Annual
              Report to Stockholders:


                                                                      Page in
                                                                    Exhibit 13.1
                                                                    ------------
              Consolidated Statements of Income-Years Ended
              September 30, 1996, 1995 and 1994............................ 9 

              Consolidated Balance Sheets-September 30, 1996, 1995
              and 1994.....................................................10

              Consolidated Statements of Stockholders' Equity-
              Years Ended September 30, 1996, 1995 and 1994................11

              Consolidated Statements of Cash Flows-Years Ended
              September 30, 1996, 1995 and 1994............................12

              Notes to Consolidated Financial Statements...................13

              Report of Ernst & Young LLP, Independent Auditors............20

       2.     Financial  Statement  Schedule.  The following financial statement
              schedule of Boole & Babbage,  Inc. is filed as part of this Report
              and should be read in conjunction with the Consolidated  Financial
              Statements of Boole & Babbage, Inc.:

              Schedule for the fiscal years ended  September 30, 1996,  1995 and
              1994:

              Schedule                                                      Page
              --------                                                      ----
              II-  Valuation and Qualifying Accounts........................13

       All other  schedules  are omitted since the required  information  is not
       present or is not present in amounts  sufficient to require submission of
       the  schedules,  or because the  information  required is included in the
       Consolidated  Financial Statements and notes thereto included in the 1996
       Annual Report to Stockholders, filed as Exhibit 13.1.

       3.     Exhibits.  The exhibits  listed in Item 14(c) are filed as part of
              this Annual Report.

(b)    The Company did not file any reports on Form 8-K during the quarter ended
       September 30, 1996.


                                       9
<PAGE>


(c)    Exhibit
        Number         Description
        ------         ------------
         3.1           Restated Certificate of Incorporation of
                       Registrant.  (1)

         3.2           Bylaws of Registrant.  (2)

         4.1           Reference is made to Exhibits 3.1 and 3.2.

        10.1          1986 Incentive Stock Option Plan, as
                      amended, and related grant forms.  (3)
       
        10.2          1986 Supplemental Stock Option Plan, as
                      amended, and related grant forms.  (3)
       
        10.3          Employee Stock Purchase Plan.  (4)
       
        10.4          Form of Indemnity Agreement between
                      Registrant and its officers and directors.  (1)
       
        10.5          1993 Nonemployee Directors' Stock Option Plan, as
                      amended, and related grant forms.  (5)
       
        10.6          1995 Stock Option Plan, as amended, and related
                      grant forms.  (6)
       
        11.1          Computation of net income per share.  (7)
       
        13.1          1996 Annual Report to Stockholders.  (7)
       
        21.1           Subsidiaries of Registrant.  (7)
       
        23.1           Consent of Ernst & Young LLP, Independent
                       Auditors.  (7)
       
        27.1           Financial Data Schedule.  (7)
      

                                       10
<PAGE>


(1)    Previously  filed as an exhibit to the  definitive  Proxy  Statement  for
       January 20, 1987 Annual Meeting of Stockholders and incorporated
       herein by reference.

(2)    Previously  filed as an exhibit to the Annual Report on Form 10-K for the
       year ended September 30, 1989, and incorporated herein by reference.

(3)    Previously filed as an exhibit to the Registration Statement on Form S-8
       (Registration No. 33-65145) and incorporated herein by reference.

(4)    Previously filed as an exhibit to the Registration Statement on Form S-8
       (Registration No. 33-55588) and incorporated herein by reference.

(5)    Previously filed as an exhibit to the Registration Statement on Form S-8
        (Registration No. 33-79782) and incorporated herein by reference.

(6)    Previously filed as an exhibit to the Registration Statement on Form S-8
        (Registration No. 333-02723) and incorporated herein by reference.

(7)    Filed as an exhibit to this Annual Report on Form 10-K.


     Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors,  officers and controlling  persons of the
registrant pursuant to the foregoing  provisions,  or otherwise,  the registrant
has been advised that in the opinion of the Securities  and Exchange  Commission
such  indemnification  is against public policy as express in the Securities Act
of  1933  and is,  therefore,  unenforceable.  In the  event  that a  claim  for
indemnification  against  such  liabilities  (other  than  the  payment  by  the
registrant of expenses  incurred or paid by a director,  officer or  controlling
person of the  registrant  in the  successful  defense  of any  action,  suit or
proceeding)  is  asserted by such  director,  officer or  controlling  person in
connection with the securities being registered,  the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit  to a  court  of  appropriate  jurisdiction  the  question  whether  such
indemnification  by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.




                                       11
<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  on the 26th day of
December 1996.

                                            BOOLE & BABBAGE, INC.


                                   By:      \Arthur F. Knapp, Jr.\
                                            ------------------------------------
                                            Arthur F. Knapp, Jr.
                                            Chief Financial Officer
                                            (Principal Financial and Accounting
Officer)


                                POWER OF ATTORNEY

       KNOW ALL MEN BY THESE PRESENTS,  that each person whose signature appears
on the  following  page  constitutes  and appoints  Paul E. Newton and Arthur F.
Knapp  his  attorneys-in-fact  for him in any and all  capacities,  to sign  any
amendments  to this  Report on Form 10-K,  and to file the same,  with  exhibits
thereto and other  documents in connection  therewith,  with the  Securities and
Exchange  Commission,   hereby  ratifying  and  confirming  all  that  the  said
attorney-in-fact,  or his substitute or substitutes,  may do or cause to be done
by virtue hereof.

       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 indicated on the 26th day of December 1996.



\Johannes S. Bruggeling\                    \Terry R. McGowan\
--------------------------------------      ------------------------------------
Johannes S. Bruggeling                      Terry R. McGowan
Executive Vice President and Director       Director



\Raymond E. Cairns\                         \Paul E. Newton\
--------------------------------------      ------------------------------------
Raymond E. Cairns                           Paul E. Newton
Director                                    President and Director



\Franklin P. Johnson, Jr.\                  \Carl H. Reynolds\
--------------------------------------      ------------------------------------
Franklin P. Johnson, Jr.                    Carl H. Reynolds
Chairman of the Board of Directors          Director


                                       12
<PAGE>

                                   SCHEDULE II

                              BOOLE & BABBAGE, INC.

                        VALUATION AND QUALIFYING ACCOUNTS

<TABLE>
                         Allowance for Doubtful Accounts

<CAPTION>

                                                               Additions
                                                     ------------------------------

                                                       Charged           Charged
                                      Balance at       to Costs          to Other                           Balance
                                      Beginning        and               Accounts      Deductions           at End
                                      of Period        Expenses          Describe      Describe             of Period
                                      ---------        --------          --------      --------             ---------
<S>                                   <C>              <C>                  <C>        <C>                 <C>       
Year ended September 30, 1996         $1,734,000       $370,000             --         $(216,000)*         $1,888,000
                                                                           
Year ended September 30, 1995         $1,781,000       $129,000             --         $(176,000)**        $1,734,000
                                                                           
Year ended September 30, 1994         $1,832,000       $296,000             --         $(347,000)***       $1,781,000
                                                                     


<FN>

*      Amount  includes  $206,000  of account  write-offs  net of $10,000 due to
       currency changes.

**     Amount  includes  $162,000  of account  write-offs  net of $14,000 due to
       currency changes.

***    Amount  includes  $378,000 of account  write-offs,  net of $31,000 due to
       currency changes.
</FN>
</TABLE>


                                       13