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                                                                   EXHIBIT 10.31

May 30, 2000

Steve Kane
1425 San Raymundo Road
Hillsborough, CA  94010

Dear Steve,

     On behalf of Neoforma, Inc. (the "Company"), I am pleased to offer you a
position with the Company based upon the following terms:

     1.   Position. Upon acceptance of this offer, you will become a Vice
President of Human Resources, reporting to Fred Ruegsegger, our Chief Financial
Officer. You will be expected to devote at least forty (40) hours per week to
the performance of your duties and to give your best efforts to such duties.
Your position may require that you travel from time to time as the Company may
reasonably request and as shall be appropriate and necessary in the performance
of your duties.

     2.   Effective Date. The effective date of employment shall be: _May 30,
2000.

     3.   AT-WILL EMPLOYMENT. YOU SHOULD BE AWARE THAT YOUR EMPLOYMENT WITH THE
COMPANY IS FOR NO SPECIFIED PERIOD AND CONSTITUTES "AT-WILL" EMPLOYMENT. AS A
RESULT, YOU ARE FREE TO TERMINATE YOUR EMPLOYMENT AT ANY TIME, FOR ANY REASON OR
FOR NO REASON. SIMILARLY, THE COMPANY IS FREE TO TERMINATE YOUR EMPLOYMENT, AT
ANY TIME, FOR ANY REASON OR FOR NO REASON AND THAT THE TERMS OF YOUR EMPLOYMENT,
INCLUDING BUT NOT LIMITED TO PROMOTION, DEMOTION, TRANSFER, COMPENSATION,
BENEFITS, DUTIES AND LOCATION OF WORK MAY BE CHANGED AT ANY TIME, FOR ANY REASON
OR FOR NO REASON IN THE EVENT OF TERMINATION OF YOUR EMPLOYMENT, YOU WILL NOT BE
ENTITLED TO ANY PAYMENTS, BENEFITS, DAMAGES, AWARDS OR COMPENSATION OTHER THAN
AS MAY OTHERWISE BE AVAILABLE IN ACCORDANCE WITH THE COMPANY'S ESTABLISHED
EMPLOYEE PLANS AND POLICIES AT THE TIME OF TERMINATION.

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     4.   Compensation. The Company will pay you a salary of $165,000 per annum,
which is equivalent to $6,875.00 semi-monthly, less applicable withholdings,
payable in accordance with the Company's standard payroll policies. Your salary
will begin as of the effective date of employment. The first and last payment by
the Company to you will be prorated, if necessary, to reflect a commencement or
termination date other than the first or last working day of a pay period. Also,
the Company will make available an annual bonus amount of 25% (a fourth of which
may be paid out quarterly) which is tied to MBOs established with your manager.


     5.   Vacation and Benefits. Upon the Effective Date of your employment and
then for so long as you are employed by the Company you will accrue 1.25 days of
paid time off ("PTO") for each full month you are employed by the Company.
Vacation days and sick leave shall both be deducted from your accrued PTO. You
will also be entitled to standard fringe benefits in accordance with the
Company's practices covering employees, as such benefits may be in effect from
time to time. Please contact Human Resources if you would like additional
information regarding benefits.

     6.   Stock Option. Subject to action by the Company's board of directors
and compliance with applicable state and federal securities laws, the Company
will grant to you an option (the "Option") to purchase 150,000 shares of the
Company's Common Stock pursuant to the Company's 1999 Incentive Stock Plan (the
"Plan") adopted by the board of directors and stockholders of the Company. The
exercise price of the Option will be the fair market value of the Company's
Common Stock on the date of grant as determined by the Company's board of
directors. The Option will vest over four (4) years with one quarter (1/4) of
the shares vesting at the end of one full year following your effective date of
employment with the Company and an additional one forty-eighth (1/48) of the
shares will vest each full month thereafter until all of the shares are
exercisable, subject to all provisions of the Plan and your continued employment
with the Company. In the event of a change of control of the Corporation, one
half of your unvested stock options will vest and become immediately exercisable
if your employment is terminated or your responsibilities are substantially
reduced without cause within one year after the change in control.

     7.   Employment, Confidential Information, Invention Assignment and
Arbitration Agreement. As a condition of accepting this offer of employment, you
will be required to complete, sign and return the Company's standard form of
Employment, Confidential Information, Invention Assignment and Arbitration
Agreement.

     8.   Immigration Laws. For purposes of federal immigration laws, you will
be required to provide to the Company documentary evidence of your identity and
eligibility for employment in the United States. Such documentation must be
provided within 3 business days of the effective date of your employment, or
your employment relationship with the Company may be terminated.

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     9.   Conflicting Employment. During the period that you render services to
the Company, you will not engage in any employment, business or activity that is
in any way competitive with the business or proposed business of the Company.
You will disclose to the Company in writing any other gainful employment,
business or activity that you are currently associated with or participate in
that competes with the Company. You will not assist any other person or
organization in competing with the Company or in preparing to engage in
competition with the business or proposed business of the Company. You represent
that your signing of this offer letter, agreement(s) representing stock options
granted to you, if any, under the Plan and the Company's Employment,
Confidential Information, Invention Assignment and Arbitration Agreement and
your commencement of employment with the Company will not violate any agreement
currently in place between yourself and current or past employers.

     10.  Entire Agreement. This offer letter, the Employment, Confidential
Information, Invention Assignment and Arbitration Agreement and the agreement(s)
representing stock options granted to you, if any, under the Plan, when signed
by you, set forth the terms of your employment with the Company and supersede
any and all prior representations and agreements, whether written or oral. Offer
is contingent upon securing written release from present employer, acceptable to
Neoforma.com

     11.  Amendment. This agreement can only be amended in writing signed by you
and an officer of the Company. Any waiver of a right under this agreement must
be in writing.

     12.  Governing Law. This agreement will be governed under the laws of the
State of California applicable to such agreements made and to be performed
entirely within such State.

     13.  Severance. Notwithstanding Paragraph 3 above, if the Company
terminates your employment other than for justifiable cause (as defined below),
the Company shall pay to you a lump-sum amount equal to three (3) months of your
annual base salary at the time of termination, less applicable withholdings.
"Justifiable Cause" shall include the commission of a felony, acts of moral
turpitude, your refusal to obey a lawful order of the board of directors, or the
misuse of corporate funds or opportunities.

     We look forward to you joining the Company. If the foregoing terms are
agreeable, please indicate your acceptance by signing the enclosed copy of this
letter in the space provided below and returning it to me within three days.

                                             Sincerely,

                                             NEOFORMA, INC.


                                             By:
                                                --------------------------------
                                                Fred Ruegsegger,
                                                Chief Financial Officer


AGREED AND ACCEPTED:
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