UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              Washington, DC 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, 1997

                                       OR

[ ]  TRANSITION  REPORT  PURSUANT  TO SECTION   13  OR  15(d)  OF THE SECURITIES
     EXCHANGE ACT OF 1934 For the transition period from________to___________

                        Commission File Number: 0-132-58

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

 Delaware                                                94-1651571
 (State or other jurisdiction of                         (IRS 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 28, 1997, was approximately  $503,252,809.  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
28, 1997 was 18,866,547.

                       DOCUMENTS INCORPORATED BY REFERENCE

1.   Portions of Annual Report to  Stockholders  for fiscal year ended September
     30, 1997 - Items 5, 6, 7, 8 and 14.

2.   Portions of Proxy  Statement  dated January 15, 1998 - Items 10, 11, 12 and
     13.
<PAGE>

                              BOOLE & BABBAGE, INC.
                                    FORM 10-K
                          YEAR ENDED SEPTEMBER 30, 1997
                                Table of Contents

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

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

    2.  Properties.....................................................     7

    3.  Legal Proceedings..............................................     7

    4.  Submission of Matters to a Vote of Security Holders............     7

                                     PART II

    5.  Market for the Registrant's Common Stock and Related 
        Stockholder Matters............................................     8

    6.  Selected Consolidated Financial Data...........................     8

    7.  Management's Discussion and Analysis of Financial Condition and
        Results of Operations..........................................     8

    7A. Quantitative and Qualitative Disclosures about Market Risk.....     8

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

    9.  Changes in and Disagreements with Accountants on Accounting and
        Financial Disclosure...........................................     8

                                    PART III

    10. Directors and Executive Officers of the Registrant.............     9

    11. Executive Compensation.........................................     9

    12. Security Ownership of Certain Beneficial Owners and Management.     9

    13. Certain Relationships and Related Transactions.................     9

                                     PART IV

    14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K   10

    Signatures.........................................................    13


<PAGE>

                                     PART I


ITEM 1.  BUSINESS

General

Boole & Babbage,  Inc.  ("Boole & Babbage" or the  "Company"),  founded in 1967,
develops  and markets  enterprise  automation  software  solutions  for managing
service levels in multivendor, distributed computing environments.

The  Company's  products are used by  information  systems  professionals  whose
organizations  rely on the availability 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 30 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 and across a myriad of platforms.

The explosive  growth of computing  resources  poses new  challenges for systems
management.  Organizations are increasingly dependent on information systems for
their 24x7  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.

Today's  typical  computing   environment  includes  mainframes,   workstations,
applications,  middleware,  databases and Web technologies  dispersed throughout
the organization. In this scenario,  applications become increasingly complex as
they support more business  functions and are distributed  across the enterprise
on downsized platforms.

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

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

In the  face  of  these  market  dynamics,  traditional  approaches  to  systems
management--which   focuses  on  managing  discrete  components  such  as  CPUs,
subsystems,  devices and  networks--  cannot meet the  challenge of managing the
service  levels  required  by  the  end-users  connected  to  the  corporate  IT
infrastructure.  These users demand that systems  management focuses on the same
mission-critical applications they rely on.

                                       1
<PAGE>

Today,  Boole & Babbage is focused on delivering the next  generation of service
level  management  tools needed to respond to these  challenges  with its latest
product  initiative:  Desired State  Management.  In support of this  initiative
which is designed to allow  organizations  to express IT management  policies in
business  terms,  Boole  &  Babbage  has  introduced  a  new  Windows  NT-based,
Web-enabled  family of clients,  called the  Explorer,  that provide  users with
increased  flexibility and lower  complexity in managing the entire  enterprise.
Additionally,  the Company has outlined  plans for several  other new  products,
including new servers and agents, and initiatives that support the Desired State
Management computing model.


Product Strategy:   Service Level Management for Distributed Systems

Simplifying the management of enterprises  and ensuring  system  availability is
the driving force behind Boole & Babbage software solutions. Its products enable
leading worldwide  organizations with large and complex  Information  Technology
(IT) systems to reduce  operational costs and improve service delivery.  Through
advanced  interoperability  with leading frameworks and a flexible  architecture
easily  scaled to  customer  requirements,  Boole & Babbage  products  deliver a
comprehensive   systems  management  and  automation  solution  for  the  entire
enterprise, including applications, middleware, databases and Web technologies.

The Boole & Babbage set of service level  management  offerings is an end-to-end
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/Tivoli,  HP or SUN,  then  Boole &
Babbage  service  level  management   solutions  fit  with  and  complement  the
customer's  specific   environment  without  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.


Explorer Family for Proactive Service Level Management

By  focusing on service  level  management  at the  application  level,  the new
Explorer product  architecture  allows  businesses to reduce the  implementation
process;  lower the burden and costs involved in  maintenance;  and  effectively
close the gap between IT management and business units.

Delivering  seamless  interoperability  across all Boole & Babbage product lines
from  a Web  browser  or  native  Microsoft  Windows  NT-based,  graphical  user
interface,  the  Explorer  family  of  clients  share  the same  object-oriented
technology.

Boole & Babbage  has also  incorporated  a  highly-graphical  3D and video  user
interface,  secure  remote  access and  complete  platform  independence,  via a
full-function Web browser, to all its Explorer offerings. Products include:

COMMAND/POST  Explorer and  MAX/Enterprise  Explorer for distributed  end-to-end
enterprise management.

SpaceView Explorer for comprehensive storage management.

Command MQ Explorer for end-to-end management of message-oriented middleware.

MainView  Explorer for management of Parallel Sysplex and traditional  mainframe
environments (available in Q2 1998).

                                       2
<PAGE>

COMMAND/POST:   End-to-end Availability Management for Distributed Systems

COMMAND/POST is at the core of the Company's  service level management  strategy
and is  installed  in more than 500  hundred  leading  organizations  worldwide.
COMMAND/POST functions as a central point-of-control for managing and automating
all  computers,  networks and  applications.  It is integrated  with all Boole &
Babbage  product  lines,  as  well  as many of the  leading  help  desk  problem
management  products and frameworks.  COMMAND/POST  uses a combination of agent-
and message-based  capabilities to extend the 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  escalates  problem  resolution to the  appropriate  level to ensure
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 systems management professionals.

By  consolidating  enterprise  information  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 four years,  COMMAND/POST has 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/Tivoli  and  SUN,  COMMAND/POST  has  gained
acceptance  as  the  system  integrator  for  various  point  solutions.   These
partnerships   deliver  to  COMMAND/POST   users  the  benefits  of  integrated,
complementary products from customers' preferred vendors.

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.


COMMAND/POST Power Modules:   Distributed Enterprise Intelligence

Power  Modules are  agent-based  solutions  for  managing a variety of different
operating system platforms, middleware and applications. Power Modules exist for
multiple versions of UNIX, Windows NT, OS/2,  NetWare,  IBM MQSeries,  Microsoft
MSMQ and SAP R/3.

Each  Power  Module  is  focused  on   increasing   availability   by  providing
surveillance and resolution of conditions that can affect applications,  servers
or  workstations.  Integrated  management  of Power  Modules and the alerts they
generate is performed from either the  enterprise  central point of control at a
COMMAND/POST console, or from a local domain-level COMMAND/POST console.

                                       3
<PAGE>

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 ensure that service and availability  goals are being met across the entire
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  benefit from greater  efficiency  and cost  reduction  with  parallel
processors,  however,  they are also 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.

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  operating
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.  IBM is
also a customer and user of Boole & Babbage products.

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 in
order to prepare their systems 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.


Command MQ:  End-to-end Middleware Management

Command MQ is a fully integrated solution that provides availability  management
and automation,  performance and operations  management,  and  configuration and
administration of distributed  message-queuing middleware networks. Based on the
Boole & Babbage  agent and  message-based  technology,  Command MQ's coverage of
MQSeries spans MVS,  HP-UX,  Sun Solaris,  DEC VMS,  UNIX,  AIX,  OS/400,  OS/2,
Microsoft's MSMQ and Windows NT operating environments.

From a single console, Command MQ presents a consummate view of the availability
and  performance  of the  middleware  layer  network and how it is affecting the
mission-critical  applications it supports.  Command MQ is capable of monitoring
all middleware internal network components,  such as queue managers,  queues and
channels,  as  well as the  physical  resources  that  constitute  the  external
network.

Command  MQ  is  highly  interoperable  with  enterprise   management  consoles,
including  HP  OpenView,  Tivoli TME 10,  SunSoft  Solstice  and Boole & Babbage
COMMAND/POST.

                                       4
<PAGE>

SpaceView:  End-to-end Storage Management and Automation

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

Its SpaceView offering provides  enterprisewide,  integrated storage management.
Over 3,000 data  centers  worldwide  use the  SpaceView  family of  products  to
automate  storage  management  across the  enterprise.  Components  of SpaceView
dynamically recover from errors caused by space shortages,  extend IBM's storage
management  utilities with more  sophisticated file placement and better control
of  archiving,  report on disk  utilization  by  physical  volume or by business
application,  and  increase  performance  of  specific  types  of  jobs  through
extensive buffering.


Third-party Products

The Company also sells a number of products from independent  software  vendors;
these  third-party   products   complement  the  Company's  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.


COMMAND/POST,  MainView and MAX/Enterprise are registered  trademarks of Boole &
Babbage,  Inc.  SpaceView  is a  trademark  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.  Customers may also elect to purchase
advance  maintenance at the time of product  licensing for  maintenance  periods
beyond the first year.  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%.


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.

                                       5
<PAGE>

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 accounted for greater than 10% of the Company's
revenue in 1997, 1996 or 1995.

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 6,000 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 1997 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  $22,357,000,  $20,872,000 and $20,113,000 for the
years ended September 30, 1997, 1996 and 1995, respectively.


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 all of these areas.

                                       6
<PAGE>

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, 1997 Boole & Babbage  employed  approximately  880  persons,
including  sales,  marketing and related  activities;  product  development  and
customer support; and management, administration and finance. Of such employees,
approximately  544 are employed in the United States and  approximately  349 are
employed in foreign countries.  The Company believes that its employee relations
are good.


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, 1997.

                                       7
<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 1997 Annual
Report to Stockholders is incorporated herein by reference. On January 16, 1997,
pursuant to an  Agreement  and Plan of Merger and  Reorganization  among Boole &
Babbage,  MAXM Systems  Corporation  ("MAXM") and Minimum Acquisition Sub, Inc.,
Boole & Babbage  acquired all of the capital stock of MAXM.  In connection  with
and in consideration for the acquisition of MAXM by Boole Babbage,  an aggregate
of  1,137,115  shares  of  Boole &  Babbage  Common  Stock  were  issued  to the
shareholders of MAXM,  subject to an escrow  agreement  pursuant to which 10% of
such shares are being held by an  independent  third  party  escrow  agent.  The
issuance  of  Common  Stock  by  Boole &  Babbage  was not  registered  with the
Securities and Exchange  Commission in reliance upon the exemptions  provided by
Section 4(2) of the Securities Act of 1933 and Rule 506 thereunder.


ITEM 6.  SELECTED CONSOLIDATED FINANCIAL DATA

     The  information  contained  under  the  caption,   "Selected  Consolidated
Financial  Data"  in  the  1997  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 1997 Annual
Report to Stockholders on pages 3 - 8 is incorporated herein by reference.


ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     Not applicable.


ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     Consolidated  financial statements for Boole & Babbage,  Inc. are contained
on pages 9 - 12 of the 1997 Annual Report to Stockholders  and are  incorporated
herein  by  reference.  Supplementary  data is  contained  on page 1 of the 1997
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.

                                       8
<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, 1998 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, 1998 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,  1998 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,  1998 under the caption
"Certain Transactions."

                                       9
<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  1997
               Annual Report to Stockholders:


                                                                         Page in
                                                                    Exhibit 13.1

               Consolidated Statements of Income-Years Ended
               September 30, 1997, 1996 and 1995..........................   9

               Consolidated Balance Sheets-September 30, 1997, 1996
               and 1995...................................................  10

               Consolidated Statements of Stockholders' Equity-
               Years Ended September 30, 1997, 1996 and 1995..............  11

               Consolidated Statements of Cash Flows-Years Ended
               September 30, 1997, 1996 and 1995..........................  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, 1997, 1996  and
               1995:

               Schedule                                                     Page
               --------                                                     ----
               II-  Valuation and Qualifying Accounts.....................   14

       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 1997
       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, 1997.

                                       10
<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    1997 Annual Report to Stockholders. (7)

       21.1    Subsidiaries of Registrant. (7)

       23.1    Consent of Ernst & Young LLP, Independent Accountants. (7)

       23.2    Report of Coopers & Lybrand LLP, Independent Accountants. (7)

       23.3    Consent of Coopers & Lybrand LLP, Independent Accountants. (7)

       27.1    Financial Data Schedule. (7)

                                       11
<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. 333-32341) 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.

                                       12
<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 22nd day of
December 1997.

                                                      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, Jr. 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 22nd day of December 1997.



\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

                                       13
<PAGE>
<TABLE>
                                   SCHEDULE II

                              BOOLE & BABBAGE, INC.

                        VALUATION AND QUALIFYING ACCOUNTS

                         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>       
Year ended September 30, 1997         $2,277,000       $  40,000       --         $(322,000)*           $1,995,000

Year ended September 30, 1996         $2,103,000       $ 390,000       --         $(216,000)**          $2,277,000

Year ended September 30, 1995         $2,150,000       $ 129,000       --         $(176,000)***         $2,103,000

<FN>
*    Amount includes $280,000 of account  write-offs and $42,000 due to currency
     changes.

**   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.

</FN>
</TABLE>
                                       14