<PAGE> 1

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                             _____________________

                                   FORM 10-Q


       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

                              EXCHANGE ACT OF 1934

                  For the quarterly period ended June 30, 2000

                                       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 00025683

                                 MARIMBA, INC.
             (Exact Name of Registrant as Specified in Its Charter)

                Delaware                           77-0422318
        (State of incorporation)        (IRS Employer Identification No.)


               440 Clyde Avenue, Mountain View, California 94043
          (Address of principal executive offices, including ZIP code)

                                 (650) 930-5282
              (Registrant's telephone number, including area code)

                                      None
              (Former name, former address and former fiscal year,
                         if changed since last report)

     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant  was required to file such  reports) and (2) has been subject to such
filing  requirements  for the  past 90 days.  Yes X   No    .
                                                 ---     ---
     The number of shares  outstanding  of the  Registrant's  Common Stock as of
July 31, 2000 was 23,434,277.


<PAGE>

                                 MARIMBA, INC.
                                     INDEX

                                                                        Page No.
Part I.   FINANCIAL INFORMATION

Item 1.   Financial Statements

          Condensed Consolidated Balance Sheets as of June 30, 2000 and
          December 31, 1999                                                    1

          Condensed  Consolidated  Statements  of Operations  and
          Comprehensive Income  (Loss) for the Three and Six Months
          Ended June 30,  2000 and 1999                                        2

          Condensed  Consolidated  Statements  of Cash  Flows for the
          Six Months Ended June 30, 2000 and 1999                              3

          Notes to Condensed Consolidated Financial Statements                 4

Item 2.   Management's Discussion and Analysis of Financial
          Condition and Results of Operations                                  7

Item 3.   Qualitative and Quantitative Disclosures About Market Risk          19

Part II.  OTHER INFORMATION

Item 1.   Legal Proceedings                                                   20

Item 2.   Changes in Securities and Use of Proceeds                           21

Item 3.   Defaults Upon Senior Securities                                     21

Item 4.   Submission of Matters to a Vote of Security Holders                 22

Item 5.   Other Information                                                   22

Item 6.   Exhibits and Reports on Form 8-K                                    22

Signature                                                                     23

Exhibit Index                                                                 24

<PAGE>

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                                 MARIMBA, INC.

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (in thousands)


                                                    June 30,        December 31,
                                                      2000             1999  (1)
                                                   ----------       ------------
                                                   (unaudited)

ASSETS
Current assets:
  Cash and cash equivalents                         $36,258            $22,263
  Short-term investments                             37,723             42,760
  Accounts receivable, net                           12,571              7,399
  Prepaid expenses and other current assets           1,037              1,085
                                                    -------            -------
     Total current assets                            87,589             73,507
Property and equipment, net                           3,213              2,955
Long-term investments                                 4,463             13,989
Other assets                                            361                 36
                                                    -------            -------
                                                    $95,626            $90,487

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable and accrued liabilities           $2,165             $3,143
  Accrued compensation                                3,721              3,279
  Current portion of capital lease obligations
    and equipment advances                               10                 59
  Deferred revenue                                   14,639             11,319
                                                    -------            -------
    Total current liabilities                        20,535             17,800
Long-term portion of capital lease obligations
  and equipment advances, and other long-term
  liabilities                                            76                 48

Stockholders' equity:
  Common stock                                            2                  2
  Additional paid-in capital                         94,397             93,436
  Deferred compensation                                (883)            (1,680)
  Cumulative translation adjustment                     (39)               (22)
  Unrealized loss on investments                       (197)              (239)
  Accumulated deficit                               (18,265)           (18,858)
                                                    --------           --------
    Stockholders' equity                             75,015             72,639
                                                    --------           --------
                                                    $95,626            $90,487

                            See accompanying notes.

(1)Derived  from audited  financial  statements  contained in the Company's Form
10-K.

                                       1
<PAGE>

                                 MARIMBA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
                    (in thousands, except per share amounts)



                                       Three Months Ended      Six Months Ended
                                            June 30,                June 30,
                                        2000       1999         2000       1999
                                       ------------------      ----------------
                                          (unaudited)             (unaudited)

Revenues:
  License                             $9,163     $4,929      $17,224     $9,438
  Service                              2,953      1,958        5,459      3,580
                                      ------     ------      -------     ------
Total revenues                        12,116      6,887       22,683     13,018
Cost of revenues:
  License                                195         77          327        106
  Service                                922        774        1,813      1,409
                                      ------     ------      -------     ------
Total cost of revenues                 1,117        851        2,140      1,515
                                      ------     ------      -------     ------
Gross profit                          10,999      6,036       20,543     11,503
Operating expenses:
  Research and development             2,476      1,918        5,018      3,757
  Sales and marketing                  6,710      4,379       13,624      8,635
  General and administrative           1,475      1,334        2,821      2,190
  Amortization of deferred
    compensation                         205        451          542        629
                                      ------      -----       ------     ------
Total operating expenses              10,866      8,082       22,005     15,211
                                      ------      -----       ------     ------
Income (loss) from operations            133     (2,046)      (1,462)    (3,708)
Interest income, net                   1,150        563        2,204        607
                                      ------     ------       ------     ------
Income (loss) before income taxes      1,283     (1,483)         742     (3,101)
Provision for income taxes                31         28          149         30
                                      ------    -------       ------    -------
Net income (loss)                     $1,252    $(1,511)        $593    $(3,131)


Other comprehensive income (loss):
  Translation adjustment                 (12)        (7)         (17)       (12)
  Unrealized gain (loss) on investments   66       (184)          42       (184)
                                      ------    -------         ----    -------
Comprehensive income (loss)           $1,306    $(1,702)        $617    $(3,327)


Basic earnings (loss) per share         $.05      $(.08)        $.03      $(.20)
Diluted earnings (loss) per share       $.05      $(.08)        $.02      $(.20)


Shares used in per share calculation
   - basic                            23,142     18,910       23,068     15,557
Shares used in per share calculation
   - diluted                          24,739     18,910       24,950     15,557
Pro forma basic and diluted net
   loss per share                                 $(.07)                  $(.16)
Shares used in computing pro forma
   basic and diluted net loss per share          20,828                  19,393


                            See accompanying notes.

                                       2
<PAGE>


                                 MARIMBA, INC.

                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)


                                                        Six Months Ended
                                                            June 30,
                                                        2000        1999
                                                        ----------------
                                                           (unaudited)
OPERATING ACTIVITIES
Net income (loss)                                       $593     $(3,131)
Adjustments to reconcile net income (loss) to
   net cash used in operating activities:
   Depreciation and amortization                         775         576
   Amortization of deferred compensation                 542         629
   Other                                                 (19)        (15)
   Changes in operating assets and liabilities:
     Accounts receivable, net                         (5,172)     (1,078)
     Unbilled receivables                                  -       1,036
     Prepaid expenses and other current assets            49        (306)
     Other assets                                       (298)        298
     Accounts payable and accrued liabilities           (979)        457
     Accrued compensation                                443         202
     Deferred revenue                                  3,320         812
                                                       ------      ------
       Net cash used in operating activities            (746)       (520)
                                                       ------      ------
INVESTING ACTIVITIES
Capital expenditures                                  (1,033)       (700)
Purchases of investments                             (17,245)    (48,585)
Sales of investments                                  31,850       3,099
                                                     -------     --------
   Net cash provided (used) in investing activities   13,572     (46,186)
                                                     -------     --------
FINANCING ACTIVITIES
Repayment of note receivable from officer                  -         160
Proceeds from sale of common stock in initial public
offering, net                                              -      68,110
Proceeds from issuance of common stock, net of
repurchases                                            1,218       1,225
Principal payments on capital lease obligations
and equipment advances                                   (49)       (862)
                                                     --------    --------
   Net cash from financing activities                  1,169       8,633
                                                     --------    --------
Net increase in cash and cash equivalents             13,995      21,927
Cash and cash equivalents at beginning of period      22,263       3,700
                                                     -------     -------
Cash and cash equivalents at end of period           $36,258      25,627


SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Non-cash financing activities:
   Conversion of redeemable preferred stock to
   common stock                                            -     $18,953

                            See accompanying notes.

                                       3
<PAGE>


                                 MARIMBA, INC.
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


1.   Basis of Presentation

     The accompanying unaudited condensed consolidated financial statements have
been prepared by Marimba and reflect all adjustments,  consisting only of normal
recurring  adjustments,  which in the opinion of  management  are  necessary  to
present  fairly the  financial  position and the results of  operations  for the
interim  periods.  The balance  sheet at December 31, 1999 has been derived from
audited  financial  statements at that date. The financial  statements have been
prepared in  accordance  with the  regulations  of the  Securities  and Exchange
Commission,  but omit certain information and footnote  disclosure  necessary to
present  the  statements  in  accordance  with  generally  accepted   accounting
principles.  For  further  information,  refer  to  the  Consolidated  Financial
Statements  and Notes thereto  included in Marimba's  Annual Report on Form 10-K
for the year ended  December  31, 1999 filed with the  Securities  and  Exchange
Commission  on  March  27,  2000.  Results  for  the  interim  periods  are  not
necessarily  indicative of results for the fiscal year ending  December 31, 2000
or future interim or full-year period.

Net Loss Per Share

     Basic earnings per share is computed using the  weighted-average  number of
common   shares   outstanding.   Diluted   earnings   per  share   includes  the
weighted-average  number of common  share  equivalents  outstanding  during  the
period.  Dilutive common share equivalents consist of employee stock options and
are calculated by using the treasury  stock method.  Pro forma basic and diluted
net loss per share, as presented in the statements of operations for the periods
prior to Marimba's  initial  public  offering,  have been  computed as described
above and also gives effect,  under Securities and Exchange Commission guidance,
to the  conversion  of the  redeemable  convertible  preferred  stock (using the
if-converted method) from the original date of issuance.

     The following  table presents the  calculation of basic and diluted and pro
forma basic and diluted net loss per share:

                                       Three Months Ended      Six Months Ended
                                            June 30,               June 30,
                                       2000          1999      2000        1999
                                       ------------------      ----------------
                                         (in thousands, except per share data)


Net income (loss)                        $1,252   $(1,511)     $593     $(3,131)

Weighted-average shares - Basic:
Weighted-average shares of common
 stock outstanding                       23,301    19,888    23,279      16,649
Less weighted-average shares
 subject to repurchase                     (159)     (978)     (211)     (1,092)
                                         -------   -------   -------     -------
Weighted-average shares - Basic          23,142    18,910    23,068      15,557

Effect of dilutive securities:
 Employee stock options                   1,597         -     1,882           -
                                         ------    ------    ------      -------
Weighted average shares - Diluted        24,739    18,910    24,950      15,557

Net income (loss) per share - Basic        $.05     $(.08)     $.03       $(.20)
Net income (loss) per share - Diluted      $.05     $(.08)     $.02       $(.20)

Pro forma:
   Shares used above                               18,910                15,557
   Pro forma adjustment to reflect
   weighted-average effect of the
   assumed conversion of redeemable
   convertible preferred stock                      1,918                 3,836
   Shares used in computing pro forma              -------               -------
   basic and diluted net loss per share            20,828                19,393
   Pro forma basic and diluted net loss per
   share                                            $(.07)                $(.16)

                                       4
<PAGE>

     Weighted average options and warrants outstanding to purchase 3,042,000 and
2,507,000  shares of common  stock for the three and six  months  ended June 30,
1999, respectively, were not included in the computation of diluted net loss per
share because the effect would be antidilutive.  Such securities,  had they been
dilutive,  would have been included in the  computation  of diluted net loss per
share using the treasury stock method.

Revenue Recognition

     In October  1997,  the  Accounting  Standards  Executive  Committee  issued
Statement of Position  97-2 ("SOP  97-2"),  as amended by SOP 98-4 and SOP 98-9,
"Software Revenue  Recognition."  These statements  provide guidance on applying
generally  accepted  accounting  principles in  recognizing  revenue on software
transactions.  SOP 97-2,  as amended by SOP 98-4,  is  effective  for  Marimba's
transactions  entered into subsequent to January 1, 1998. The application of SOP
97-2  and SOP  98-4  has not had a  material  impact  on  Marimba's  results  of
operations.

     SOP  98-9  amends  SOP  97-2  and  98-4,  extending  the  deferral  of  the
application of certain provisions of SOP 97-2 amended by SOP 98-4 through fiscal
years  beginning on or before March 15, 1999.  All other  provisions of SOP 98-9
are  effective for  transactions  entered into in fiscal years  beginning  after
March 15,  1999.  Marimba  expects  that SOP 98-9 may require more revenue to be
deferred for certain types of transactions.

     License revenues are comprised of perpetual or multiyear license fees which
are primarily  derived from contracts  with  corporate  customers and resellers.
Such revenues are recognized  after execution of a license  agreement or receipt
of a  definitive  purchase  order,  and  delivery  of the  product  to  end-user
customers,   provided  that  there  are  no  uncertainties  surrounding  product
acceptance,  the  license  fees are  fixed or  determinable,  collectibility  is
probable and Marimba has no remaining obligations with regard to installation or
implementation  of the software.  Revenue on arrangements with customers who are
not the ultimate users (primarily resellers) is not recognized until the product
is delivered  to the end user.  If the fee due from the customer is not fixed or
determinable, revenue is recognized as payments become due from the customer. If
collectibility is not considered probable, revenue is recognized when the fee is
collected.  Advance payments are recorded as deferred revenue until the products
are shipped,  services are provided,  or obligations are met. Marimba's products
do not require significant customization.

     Revenue  recognized  from   multiple-element   software   arrangements  are
allocated  to each  element  of the  arrangement  based on the fair value of the
elements,  such as software  products,  maintenance  and support and  consulting
services.  The determination of fair value is based on objective  evidence which
is specific to Marimba.

     Service  revenues are  comprised of revenue  from  maintenance  agreements,
consulting and training fees. Software maintenance  agreements provide technical
support and the right to unspecified upgrades on an if-and-when available basis.

     Service   revenues  from  training  and  consulting  are  recognized   upon
completion of the work to be performed.  Revenue from maintenance  agreements is
deferred and  recognized on a  straight-line  basis over the life of the related
agreement, which is typically one year.

     Unbilled  receivables  consist of contractually  obligated  amounts not yet
billable by Marimba.


Revenue Concentration

     Three  customers  accounted  for 21%, 16% and 13% of revenues in the second
quarter of 2000. In the second quarter of 1999,  three  customers  accounted for
14%, 13% and 11% of  revenues.  In the first six months of 2000,  two  customers
accounted for 13% and 12% of revenues and in the  comparable  period of 1999, no
customer represented more than 10% of revenues.

                                       5
<PAGE>

2.   Legal Matters

Novadigm v. Marimba

     On March 3, 1997,  Novadigm,  Inc. filed a complaint against us in the U.S.
District Court for the Northern District of California, alleging infringement of
a patent held by Novadigm (U.S.  Patent No. 5,581,764,  the "Novadigm  Patent").
Novadigm  alleges that  Marimba's  infringement  relates to certain  methods for
updating  data  and  software  over a  computer  network  used  in the  Castanet
products.  In  its  complaint,   Novadigm  requests  preliminary  and  permanent
injunctions  prohibiting Marimba and other specified persons from making,  using
or selling any  infringing  products,  as well as damages,  costs and attorneys'
fees.  The  complaint  also  alleges that Marimba has  willfully  infringed  the
Novadigm Patent, and seeks up to triple damages pursuant to the U.S. Patent Act.

     On July 22, 1999, the court held a pre-trial  conference at which the court
canceled the prior September 20, 1999 trial date in this matter.  The court then
scheduled a trial on our defense of inequitable  conduct by Novadigm to begin on
November  15,  1999 and  stated  that at the  conclusion  of that trial it would
schedule  a jury  trial  for the  remaining  issues,  which  would  include  the
infringement  claims  against  us and our other  defenses.  The court  separated
Marimba's  defense that the Novadigm Patent is invalid for  inequitable  conduct
before the U.S.  Patent Office from  Marimba's  other defenses that the Novadigm
Patent is  invalid on other  grounds  and that  Marimba  does not  infringe  the
Novadigm Patent. A trial on Marimba's  inequitable conduct defense was held from
November  15 to  November  18,  1999.  In its  subsequent  findings  of fact and
conclusions of law, the court found no inequitable  conduct and struck Marimba's
inequitable conduct defense.

     The  trial on  Novadigm's  infringement  claims,  and  Marimba's  remaining
invalidity and non-infringement  defenses,  is scheduled to begin on November 7,
2000. A case  management  conference  is  scheduled to be held on September  18,
2000, at which the court may change the trial date.  To date,  both parties have
substantially completed their factual and expert discovery.

     Marimba  believes that it has strong defenses against  Novadigm's  lawsuit.
Accordingly,  Marimba intends to defend this suit vigorously.  However,  Marimba
may  not  prevail  in  this  litigation.   Litigation  is  subject  to  inherent
uncertainties,  especially  in cases  such as this where  sophisticated  factual
issues  must be  assessed  and complex  technical  issues  must be  decided.  In
addition,  cases  such as this are  likely  to  involve  issues  of law that are
evolving, presenting further uncertainty.  Marimba's defense of this litigation,
regardless of the merits of the complaint, has been, and will likely continue to
be,  time-consuming,   costly  and  a  diversion  for  Marimba's  technical  and
management personnel. The failure of Marimba to prevail in this litigation could
have a material adverse effect on Marimba's  results of operations and financial
condition.  There  also  can be no  assurance  that  Novadigm  will  not  assert
additional claims against Marimba in the future under the Novadigm Patent or any
other patent later issued to Novadigm.

Marimba v. Novadigm

     On July 30, 1999,  Marimba filed a complaint  against  Novadigm in the U.S.
District Court for the Northern District of California alleging  infringement by
Novadigm  of a patent  held by us  (U.S.  Patent  No.  5,919,247,  the  "Marimba
Patent").  Our complaint  seeks  monetary  damages,  as well as an injunction to
prevent Novadigm from making, using or selling infringing software products. Our
complaint also alleges that Novadigm has willfully  infringed the Marimba Patent
and seeks up to triple damages under the U.S. Patent Act.

3.      Subsequent event

     On July 21,  2000,  Marimba  named  John  Olsen  its  President  and  Chief
Executive Officer, succeeding Kim Polese who became Marimba's Chairman and Chief
Strategy  Officer.  Mr. Olsen will also serve as a member of Marimba's  Board of
Directors.  Concurrent  with  Mr.  Olsen's  appointment  to  Marimba's  Board of
Directors on July 21, 2000, Arthur van Hoff resigned as a Board member.

                                       6
<PAGE>

     As part of his compensation package, Mr. Olsen was awarded on July 21, 2000
a restricted  stock bonus of 100,000  shares of Marimba's  common  stock.  These
shares  will vest over a  two-year  period,  with 50% of the  restricted  shares
becoming  vested  upon  completion  of 12 months of  continuous  service and the
remaining  50% becoming  vested upon the next period of 12 months of  continuous
service. Marimba will record deferred compensation of approximately $2.1 million
in connection with this restricted stock bonus,  representing the aggregate fair
market value of the 100,000 shares of Marimba common stock on the date of grant.
Marimba  plans to  amortize  the total  deferred  compensation  amount  over the
24-month  vesting  period of the  restricted  stock  bonus  grant using a graded
vesting method.


ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

     The  information in this  discussion  contains  forward-looking  statements
within the meaning of Section 27A of the  Securities Act of 1933 and Section 21E
of the  Securities  Act of 1934,  as  amended.  Such  statements  are based upon
current  expectations  that  involve  risks and  uncertainties.  Any  statements
contained  herein that are not statements of historical fact may be deemed to be
forward-looking  statements.  For example, the words "believes,"  "anticipates,"
"plans,"  "expects,"  "intends" and similar expressions are intended to identify
forward-looking  statements.  Marimba's actual results and the timing of certain
events  may   differ   significantly   from  the   results   discussed   in  the
forward-looking statements. Factors that might cause such a discrepancy include,
but are not limited to, those  discussed in "Other Factors  Affecting  Operating
Results,  Liquidity and Capital Resources" below.  Additional  information about
factors  that could affect  future  results and events is included in our fiscal
1999 Form 10-K,  the Form 10-Q for our first quarter of 2000,  and other reports
filed  with  the  Securities  and  Exchange   Commission.   All  forward-looking
statements in this document are based on information  available to Marimba as of
the date hereof,  and Marimba  undertakes no obligation to release  publicly any
updates or revisions to any such forward-looking statements.

Overview

     Marimba  is  a  leading  provider  of  Internet-based  software  management
solutions  that  enable  companies  to expand  their  market  reach,  streamline
business  processes  and  strengthen  relationships  with  customers,   business
partners and employees.

     In January  1997,  we released our first version of Castanet and since that
time have continued to develop and market the Castanet  product line and enhance
the core Castanet infrastructure with additional Castanet products. In the first
half of 2000,  Marimba  released  two  products  in a new  product  line  called
Timbale.  The  Timbale  products  are  designed  to  address  many of the server
management  challenges  inherent  in  thin-client  and  Web  commerce  computing
environments  today. The first Timbale product,  Timbale for Server  Management,
was released for sale in March 2000.  The second  Timbale  product,  Timbale for
Windows  Terminal  Services,  was released for sale in June 2000.  In the second
quarter of 2000,  revenues from the Timbale products  accounted for 21% of total
license  revenues.  There can be no  assurance  that  revenues  from the Timbale
product  line will  continue to grow in the future or that the Timbale  products
will gain widespread market acceptance.

     Revenues  to date have  been  derived  primarily  from the  license  of our
Castanet  and  Timbale  products  and to a lesser  extent from  maintenance  and
support,  consulting and training  services.  Customers who license our products
generally purchase maintenance contracts,  typically covering a 12-month period.
Additionally,  customers may purchase consulting, which is customarily billed by
us at a fixed daily rate plus  out-of-pocket  expenses.  We also offer  training
services that are billed on a per student or per class session basis.

                                       7
<PAGE>

     We recognize  software  license  revenue in  accordance  with  Statement of
Position  97-2  "Software  Revenue  Recognition,"  as  amended by  Statement  of
Position 98-4. In December 1998, the AICPA issued SOP 98-9,  Modification of SOP
97-2, Software Revenue Recognition,  with respect to Certain  Transactions.  SOP
98-9 amends SOP 97-2 and SOP 98-4  extending the deferral of the  application of
provisions of SOP 97-2 amended by SOP 98-4 through fiscal years  beginning on or
before  March 15,  1999.  All other  provisions  of SOP 98-9 are  effective  for
transactions entered into in fiscal years beginning after March 15, 1999.

     License revenues are comprised of perpetual or multiyear license fees which
are primarily derived from contracts with corporate customers and resellers.  We
recognize  license revenues after execution of a license agreement or receipt of
a definitive  purchase order and delivery of the product to end-user  customers,
provided that there are no uncertainties  surrounding  product  acceptance,  the
license fees are fixed or determinable,  collectibility is probable, and we have
no remaining  obligations with regard to installation or  implementation  of the
software.  Revenues on  arrangements  with  customers  who are not the  ultimate
users,  primarily  resellers,  are not  recognized  until the  software  is sold
through  to the end  user.  If the fee due from  the  customer  is not  fixed or
determinable,  revenues are recognized as payments become due from the customer.
If collectibility is not considered  probable,  revenues are recognized when the
fee is collected.  Advanced  payments are recorded as deferred revenue until the
products are delivered,  services are provided or obligations  are met.  Service
revenues are comprised of revenues from maintenance  agreements,  consulting and
training  fees.  Revenues  from  maintenance  agreements  are  recognized  on  a
straight-line  basis over the life of the related agreement,  which is typically
one year. We recognize  service  revenues  from training and  consulting as such
services are delivered.

     Since  inception,  Marimba  has  made  substantial  investments  in  sales,
marketing and research and  development  to expand and enhance our product lines
and  increase  the market  awareness  of Marimba and its  products.  Despite our
revenue growth, we have incurred  significant  losses since inception and had an
accumulated  deficit of approximately $18.3 million at June 30, 2000. We believe
our success depends on further increasing our customer base and on growth in the
Internet  services  management  market.  Accordingly,  we intend to  continue to
invest heavily in sales, marketing and research and development.

     In view of the  rapidly  changing  nature of our  business  and our limited
operating history, we believe that period-to-period  comparisons of revenues and
operating  results are not necessarily  meaningful and should not be relied upon
as  indications  of future  performance.  Additionally,  despite our  sequential
quarterly  revenue growth to date and our  achievement of  profitability  in the
second  quarter of 2000,  we do not  believe  that  historical  growth  rates or
profitability  are necessarily  sustainable,  nor indicative of future growth or
financial results.

Results of Operations

     The following  table sets forth certain  statements of operations data as a
percentage of total  revenues for the three and six month periods ended June 30,
2000 and  1999.  This  data  has  been  derived  from  the  unaudited  condensed
consolidated  financial  statements  contained  in this Form 10-Q which,  in the
opinion  of  management  includes  all  adjustments,  consisting  only of normal
recurring  adjustments,  necessary to present fairly the financial  position and
results of operations  for the interim  periods.  The operating  results for any
quarter  should not be considered  indicative  of results of any future  period.
This information  should be read in conjunction with the consolidated  financial
statements  and notes thereto  included in Marimba's  Annual Report on Form 10-K
for the year ended December 31, 1999.

                                       8
<PAGE>

                                       Three Months Ended      Six Months Ended
                                            June 30,               June 30,
                                       2000          1999      2000        1999
                                       ------------------      ----------------
Consolidated Statement of Operations Data:
Revenues:
  License                                  75.6%     71.6%     75.9%      72.5%
  Service                                  24.4      28.4      24.1       27.5
                                          ------    ------    ------     ------
Total revenues                            100.0     100.0     100.0      100.0
Cost of revenues:
  License                                   1.6       1.1       1.4        0.8
  Service                                   7.6      11.2       8.0       10.8
                                          ------    ------    ------     ------
Total cost of revenues                      9.2      12.3       9.4       11.6
                                          ------    ------    ------     ------
Gross profit                               90.8      87.7      90.6       88.4
Operating expenses:
  Research and development                 20.4      27.8      22.1       28.9
  Sales and marketing                      55.4      63.7      60.1       66.3
  General and administrative               12.2      19.4      12.4       16.8
  Amortization of deferred compensation     1.7       6.5       2.4        4.8
                                          ------    ------    ------     ------
Total operating expenses                   89.7     117.4      97.0      116.8
                                          ------    ------    ------     ------
Income (loss) from operations               1.1     (29.7)     (6.4)     (28.4)
Interest income, net                        9.5       8.2       9.7        4.6
                                          ------    ------    ------     ------
Income (loss) before income taxes          10.6     (21.5)      3.3      (23.8)
Provision for income taxes                 (0.3)     (0.4)     (0.7)      (0.2)
                                          ------    ------    ------     ------
Net income (loss)                          10.3%    (21.9)%     2.6%     (24.0)%


Revenues

     Total  revenues  for the  second  quarter  of 2000  increased  76% to $12.1
million  from $6.9  million  in the second  quarter of 1999.  For the six months
ended June 30, 2000,  total  revenues  increased 74% to $22.7 million from $13.0
million in the comparable period of 1999.

     License  Revenues.  License  revenues  increased 86% to $9.2 million in the
second  quarter of 2000 from $4.9 million in the second  quarter of 1999.  Total
license  revenues in the six months ended June 30, 2000  increased  82% to $17.2
million from $9.4 million in the comparable  period of 1999.  Prior to March 31,
2000, substantially all license revenues were derived from sales of our Castanet
products.  In the second  quarter of 2000,  revenues  from sales of our  Timbale
products  accounted  for 21% of total  license  revenues.  The growth of license
revenues was due to increased product licenses sold,  reflecting higher customer
demand for our  products,  continued  diversification  of customer  uses for our
Castanet  product line,  growth in our sales  organization and our launch of the
Timbale product line in the first half of 2000.

     Service  Revenues.   Service  revenues  include  maintenance  and  support,
consulting and training.  Service revenues  increased 51% to $3.0 million in the
second  quarter of 2000 from $2.0  million in the second  quarter of 1999.  As a
percentage  of  total  revenues,  service  revenues  decreased  to 24% of  total
revenues  in both the three and six month  periods  ended June 30, 2000 from 28%
and 27% in the comparable  periods of 1999. The increases in service revenues in
absolute  amount were due  primarily to increased  maintenance  revenues  from a
larger  installed  base of  customers  and  increased  revenue  from  consulting
services.

Costs of Revenues

     Cost of License Revenues.  Cost of license revenues  consists  primarily of
the fees for third-party software products integrated into our Castanet products
and was less than 2% of total  revenues in the three and six month periods ended
June 30, 2000 and 1999.

     Cost of Service Revenues. Cost of service revenues increased to $992,000 in
the  second  quarter  of 2000  from  $774,000  in the  second  quarter  of 1999,
representing  31% and 40% of service  revenue.  In the first six months of 2000,
cost of service  revenues  increased  to $1.8  million from $1.4 million for the
comparable  period  in  1999,  representing  33%  and 39% of  service  revenues,
respectively.  The increases in cost of service revenues in absolute dollars for
the three and six month periods ended June 30, 2000 from the comparable  periods
of 1999 were due primarily to growth in our customer support organization and an
increase in  consulting  costs  commensurate  with the  increase  in  consulting
revenues.  The decreases in cost of service  revenues as a percentage of service
revenues were  primarily  due to the economies of scale in our customer  support
organization, with costs spread over a larger number of maintenance customers.

                                       9
<PAGE>

Operating Expenses

     Research and Development.  Research and development  expenses increased 29%
to $2.5  million in the second  quarter of 2000 from $1.9  million in the second
quarter of 1999.  For the first six  months of 2000,  research  and  development
expenses  increased  34% to $5.0  million  from $3.8  million in the  comparable
period of 1999. The increases in research and  development  expenses were due to
increases  in  engineering  personnel  and related  employee  costs,  as well as
increases in third-party consulting costs.

     Sales and  Marketing.  Sales and marketing  expenses  increased 53% to $6.7
million in the second quarter of 2000 from $4.4 million in the second quarter of
1999. For the first six months of 2000, sales and marketing  expenses  increased
58% to $13.6  million from $8.6 million in the  comparable  period of 1999.  The
increases in sales and  marketing  expenses  were due primarily to growth in our
sales and marketing  organizations,  an increase in sales commissions  resulting
from increased sales and expansion of our marketing programs and advertising.

     General and Administrative.  General and administrative  expenses increased
11% to $1.5  million  in the  second  quarter  of 2000 from $1.3  million in the
second  quarter  of  1999.  For the  first  six  months  of  2000,  general  and
administrative  expenses  increased 29% to $2.8 million from $2.2 million in the
comparable period in 1999. The increases in general and administrative  expenses
were due, in part, to growth of our  administrative  organizations in support of
the overall growth of Marimba.  Additionally,  we continued to incur significant
outside  legal  costs  in  connection  with  our  ongoing  patent   infringement
litigation with Novadigm (see Part II, Item 1 - Legal  Proceedings  herein).  We
expect to continue to incur  significant costs related to this litigation in the
future and expect these costs to  materially  increase in the shorter term as we
prepare for and conduct the trial for Novadigm's lawsuit against Marimba,  which
is currently  scheduled to commence on or about November 7, 2000.  Additionally,
we have  incurred  legal  expenses  related to our patent  infringement  lawsuit
against Novadigm and also expect these expenses to increase in the future.

     Deferred  Compensation.  We recorded deferred compensation of approximately
$1.4 million in 1998, representing the difference between the exercise prices of
options  granted to acquire  940,500  shares of common stock during 1998 and the
deemed fair value for  financial  reporting  purposes of our common stock on the
grant dates.  In addition,  we granted options to purchase common stock in April
1999 for which we recorded  additional  deferred  compensation of  approximately
$2.0  million.  Due to cancelled  shares,  the  remaining  unamortized  deferred
compensation  amount  was  reduced  by  $257,000  in the first  quarter of 2000.
Deferred compensation is being amortized over the vesting periods of the options
using a graded  vesting  method.  We  amortized  deferred  compensation  of $1.4
million during fiscal 1999 and $251,000  during fiscal l998.  This  compensation
expense relates to individuals in all operating expense categories. Amortization
of deferred  compensation was $205,000 and $542,000 for the three and six months
ended June 30, 2000, respectively.

     In  connection  with a restricted  stock bonus granted in July 2000 to John
Olsen, our newly-appointed  President and Chief Executive Officer,  Marimba will
record  additional   deferred   compensation  of  approximately   $2.1  million,
representing  the aggregate  fair market value of the 100,000  shares of Marimba
common  stock on the date of grant.  Marimba  plans to  amortize  this  deferred
compensation  amount over the 24-month  vesting period of the  restricted  stock
bonus grant using a graded vesting method.

     The   amortization   of  deferred   compensation   is   anticipated  to  be
approximately  $1,687,000 for 2000,  $1,474,000 for 2001,  $379,000 for 2002 and
$4,000 for 2003.

     Interest Income,  Net. Interest income,  net,  increased to $1.1 million in
the second  quarter of 2000 from $563,000 in the second quarter of 1999. For the
first six months of 2000,  interest income,  net, increased to $2.2 million from
$607,000  in the  comparable  period of 1999.  The  increases  are due to higher
interest  income  resulting  from the  invested  cash  from our  initial  public
offering completed in May 1999.

                                       10
<PAGE>

Liquidity and Capital Resources

     As  of  June  30,  2000,  our  principal  sources  of  liquidity   included
approximately  $36.2 million of cash and cash  equivalents  and $42.2 million of
investments in marketable securities.  Net cash used by operating activities was
$0.7 million and $0.5 million for the six month  periods ended June 30, 2000 and
June 30, 1999,  respectively.  Net cash used in operating activities for the six
months ended June 30, 2000  reflects  primarily the effect of our net income for
the second  quarter of 2000,  adjusted for non-cash  expenses and an increase in
deferred revenue, offset partially by an increase in accounts receivable.

     We  currently  anticipate  that our existing  cash,  cash  equivalents  and
investments  will be sufficient to meet our  anticipated  cash needs for working
capital and capital  expenditures  for at least the next 12 months.  Thereafter,
cash  generated  from  operations,  if any, may not be sufficient to satisfy our
liquidity requirements. We may therefore need to sell additional equity or raise
funds by other  means.  Any  additional  financings,  if  needed,  might  not be
available on  reasonable  terms or at all.  Failure to raise capital when needed
could seriously harm our business and operating results. If additional funds are
raised through the issuance of equity securities, the percentage of ownership of
our stockholders  would be reduced.  Furthermore,  these equity securities might
have rights, preferences or privileges senior to our common stock.


Other Factors Affecting Operating Results, Liquidity and Capital Resources

Our  Limited  Operating  History May  Prevent Us From  Achieving  Success in Our
Business

     We were founded in February 1996 and have a limited  operating history that
may prevent us from achieving  success in our business.  The revenues and income
potential of our business and market are unproven.  We will encounter challenges
and  difficulties  frequently  encountered by  early-stage  companies in new and
rapidly  evolving  markets.  We  may  not  successfully  address  any  of  these
challenges  and the  failure  to do so would  seriously  harm our  business  and
operating results.  In addition,  because of our limited operating  history,  we
have limited insight into trends that may emerge and affect our business.

We Have Incurred Losses and May Incur Future Losses

     Our failure to significantly increase our revenues would seriously harm our
business and operating  results.  We have  experienced  operating losses in each
quarterly period through March 31, 2000. Although Marimba recorded net income in
the  second  quarter  of  2000,  there  is no  assurance  that we will  maintain
profitability.  As of June 30,  2000,  we had an  accumulated  deficit  of $18.3
million. We expect to significantly increase our research and development, sales
and marketing and general and administrative expenses. As a result, we will need
to  significantly  increase our  quarterly  revenues to offset these  increasing
expenses  and maintain  profitability.  We may not be able to sustain our recent
revenue  growth  rates.  In fact,  we may not have any revenue  growth,  and our
revenues could decline.

Our Quarterly Operating Results Are Volatile and Future Operating Results Remain
Uncertain

     Our quarterly  operating results have varied  significantly in the past and
will  likely vary  significantly  in the future.  As a result,  we believe  that
period-to-period  comparisons  of our operating  results are not  meaningful and
should  not be relied  upon as  indicators  of our  future  performance.  In the
future,  our  operating  results  may be below the  expectations  of  securities
analysts  and  investors.  Our failure to meet these  expectations  would likely
seriously  harm the market  price of our common  stock.  Operating  results vary
depending on a number of factors, many of which are outside our control.

     In addition, we anticipate that the size of customer orders may increase as
we focus on  larger  business  accounts.  As a  result,  a delay in  recognizing
revenue, even from just one account, could have a significant negative impact on
our operating results. In the past, a significant portion of our sales have been
realized near the end of a quarter.  A delay in an anticipated sale past the end
of a particular quarter could negatively impact our operating results.

                                       11
<PAGE>

     Despite  our  sequential  revenue  growth  from the fourth  quarter of 1999
through the second  quarter of 2000,  we generally  expect that  revenues in the
first quarter of each year will be lower than revenues in the fourth  quarter of
the  preceding  year due to the  annual  nature  of  companies'  purchasing  and
budgeting cycles and the year-to-date structure of our sales incentive program.

     Our expense  levels are relatively  fixed for a particular  quarter and are
based, in part, on expectations as to future revenues.  As a result,  if revenue
levels fall below our expectations, our profitability will be adversely affected
because only a small portion of our expenses vary with our revenues.

We Expect Significant Increases in Our Operating Expenses

We intend to substantially increase our operating expenses as we:

     *    Increase our sales and marketing  activities,  including expanding our
          direct sales force;

     *    Increase our research and development activities;

     *    Expand our customer support and professional  services  organizations;
          and

     *    Expand our distribution channels.

     With these additional expenses, we must significantly increase our revenues
in order to maintain  profitability.  These expenses will be incurred  before we
generate any revenues  associated  with this  increased  spending.  If we do not
significantly  increase revenues from these efforts,  our business and operating
results would be adversely affected.

Our Success Depends on Our Castanet Product Family

     We expect to  continue to derive  substantial  revenues  from our  Castanet
product  line and  related  services.  A decline in the price of Castanet or our
inability to increase  sales of Castanet  would  seriously harm our business and
operating results.  We cannot predict Castanet's success. We periodically update
Castanet to make improvements and provide additional enhancements.  New versions
of  Castanet  may not  provide  the  benefits  we expect  and could fail to meet
customers'  requirements or achieve widespread market  acceptance.  Furthermore,
new products such as our recently  released  Timbale  product line could fail to
meet customer expectations or achieve widespread market acceptance.

     Our strategy requires Castanet to be highly scalable - in other words, able
to rapidly increase deployment size from a limited number of end-users to a very
large  number  of  end-users.  If  we  are  unable  to  achieve  this  level  of
scalability,   the   attractiveness  of  our  products  and  services  would  be
diminished.

We Need to Grow Our  Timbable  Product  Revenues and Develop and  Introduce  New
Products

     During the second quarter of 2000,  revenues from our Timbale  product line
accounted for 21% of total license revenues.  There can be no assurance that the
revenues  from our Timbale  product line will grow,  in absolute  amount or as a
percentage of total  license  revenues,  or that our Timbale  products will meet
customer  expectations  or gain  widespread  market  acceptance.  To  provide  a
comprehensive  Internet  infrastructure  management  solution,  we will  need to
develop and  introduce  new products  which offer  functionality  that we do not
currently  provide.  We may  not be  able  to  develop  these  technologies  and
therefore we may not be able to offer a  comprehensive  Internet  infrastructure
management solution.  In addition, in the past we have experienced delays in new
product releases, and we may experience similar delays in the future. If we fail
to deploy new product  releases on a timely  basis,  our business and  operating
results could be seriously harmed.

                                       12
<PAGE>

We Depend on the Growth of Our Customer  Base and  Increased  Business  from Our
Current Customers

     Our  success is  substantially  dependent  on the  continued  growth of our
customer  base.  If we fail to increase  our  customer  base,  our  business and
operating  results  would be  seriously  harmed.  Our  ability  to  attract  new
customers  will  depend on a variety  of  factors,  including  the  reliability,
security,  scalability  and  cost-effectiveness  of our products and services as
well as our ability to effectively market our products and services.

     If we fail to  generate  repeat  and  expanded  business  from our  current
customers, our business and operating results would be seriously harmed. Many of
our customers initially make a limited purchase of our products and services for
pilot programs.  These customers may not choose to purchase  additional licenses
to expand their use of our products.  In addition,  as we deploy new versions of
our products or introduce  new products,  our current  customers may not require
the  functionality  of our new products  and may not  ultimately  license  these
products.

     Because the total amount of maintenance  and support fees we receive in any
period  depends in large part on the size and  number of  licenses  that we have
previously  sold, any downturn in our software license revenues would negatively
impact our future service revenues. In addition, if customers elect not to renew
their  maintenance  agreements,  our  service  revenues  could be  significantly
adversely affected.

     Implementation  of our  products  by large  customers  may be  complex  and
customers  could become  dissatisfied if  implementation  of our products proves
difficult, costly or time consuming

     Our  products  must  integrate  with many  existing  computer  systems  and
software  programs used by our customers.  Integrating  with many other computer
systems and software  programs can be complex,  time consuming and expensive and
cause delays in the  deployment  of our products for such  customers.  Customers
could  become  dissatisfied  with our  products if  implementations  prove to be
difficult, costly or time consuming and this could negatively impact our ability
to sell our products.

We Must Retain and Attract Key Personnel

     Our success  depends  largely on the skills,  experience and performance of
the members of our senior  management  and other key  personnel,  including  our
President  and Chief  Executive  Officer,  John Olsen,  our  Chairman  and Chief
Strategy Officer, Kim Polese, and our Chief Technology Officer, Arthur van Hoff.
We have in the past lost senior  management  personnel.  For  example,  in April
2000, we announced that our Chief Financial Officer,  Fred Gerson,  would resign
in October  2000,  to be replaced at that time by our current Vice  President of
Finance.  Also, in May 2000,  Steve Williams  resigned his position as Executive
Vice President, Worldwide Sales and Chief Operating Officer.

     We  may  not  be  successful  in  attracting  qualified  senior  management
personnel or be able to attract,  assimilate  and retain other key  personnel in
the future.  None of our senior management or other key personnel is bound by an
employment  agreement.  If we lose  additional  key  employees and are unable to
replace them with  qualified  individuals,  our business and  operating  results
could be seriously harmed.  In addition,  our future success will depend largely
on our ability to continue  attracting and retaining  highly skilled  personnel.
Like other  companies  based  primarily in the San  Francisco  Bay Area, we face
intense competition for qualified personnel.

We Have a Long Sales Cycle that Depends upon Factors Outside Our Control

     A  customer's  decision  to  license  our  products  typically  involves  a
significant  commitment of resources and is influenced by the customer's  budget
cycles.  In  addition,  selling our  products  requires us to educate  potential
customers on their use and benefits. As a result, our products have a long sales
cycle which can take over six months. We face difficulty  predicting the quarter
in which sales to expected customers may occur. The sale of our products is also
subject  to  delays  from  the  lengthy  budgeting,   approval  and  competitive
evaluation  processes of our  customers  that  typically  accompany  significant
capital expenditures.  For example, customers frequently begin by evaluating our
products  on a limited  basis and  devote  time and  resources  to  testing  our
products before they decide whether or not to purchase a license for deployment.
Customers  may also  defer  orders as a result of  anticipated  releases  of new
products or enhancements by us or our competitors.

                                       13
<PAGE>

We Depend on Our Relationship with Tivoli

     Pursuant  to an  agreement  that  expired in  December  1999,  Tivoli was a
reseller  of our  products.  In  addition,  we also have an  original  equipment
manufacturer  (OEM)  agreement  with Tivoli  under which  Tivoli  built upon the
Castanet  infrastructure  to  develop a  product  called  Cross-Site,  which was
released in April 1999. Revenues from Tivoli under the OEM agreement are derived
from per  seat  royalties  on sales of  Cross-Site  that  contain  the  Castanet
infrastructure.  The per seat royalty  under the OEM agreement are less than the
per seat license fee under our reseller agreement with Tivoli.

     Tivoli has recently accounted for a decreasing  percentage of our revenues.
During the first half of 2000 and in fiscal 1999 Tivoli  accounted for less than
10% of our  revenues,  as compared to 18% of our  revenues in fiscal  1998.  The
decrease in Tivoli  revenues as a percentage of total revenues was due primarily
to the growth in Marimba's direct sales compared to a relatively smaller revenue
contribution from Tivoli.  There is no assurance that royalties from the sale of
Cross-Site will be sufficient to replace Tivoli's sales of Castanet or that such
revenues  will be sustained or grow in the future.  Any failure of Cross-Site to
achieve  widespread market acceptance could  significantly harm our business and
operating results.  Additionally,  because Cross-Site is built upon the Castanet
infrastructure, we expect Cross-Site to compete with our Castanet products.

Novadigm Has Claimed that We Infringe Its Intellectual Property

     In March,  1997,  Novadigm  filed a  complaint  against us in U.S.  federal
court,  alleging  infringement by us of a patent held by Novadigm. In July 1999,
we  filed  a  complaint   against   Novadigm  in  U.S.  federal  court  alleging
infringement by Novadigm of a patent held by us. For more information  regarding
the Novadigm litigation, see Part II, Item 1 - Legal Proceedings of this report.

     Litigation is subject to inherent  uncertainties.  In addition,  cases like
this  generally  involve  issues of law that are  evolving,  presenting  further
uncertainty.  Our defense of the  litigation  relating to the  Novadigm  Patent,
regardless of the merits of the complaint, has been, and will likely continue to
be, time  consuming and a diversion for our  personnel.  In addition,  publicity
related to this litigation has in the past, and will likely in the future,  have
a negative impact on the sale of our Castanet products.

     A failure to prevail in the  litigation  relating  to the  Novadigm  Patent
could result in:

     *    Our  paying   monetary   damages,   which  could  be  tripled  if  the
          infringement is found to have been willful;

     *    The issuance of a preliminary or permanent  injunction requiring us to
          stop selling Castanet in its current form;

     *    Our  having  to   redesign   Castanet,   which  could  be  costly  and
          time-consuming  and  could  substantially  delay  Castanet  shipments,
          assuming that a redesign is feasible;

     *    Our having to  reimburse  Novadigm  for some or all of its  attorneys'
          fees;

     *    Our having to obtain  from  Novadigm a license  to its  patent,  which
          license  might  not  be  made  available  to us on  reasonable  terms,
          particularly because Novadigm is a competitor; and/or

     *    Our having to  indemnify  our  customers  against  any losses they may
          incur due to the alleged infringement.

     Any of these  results  would  seriously  harm our  business  and  operating
results.  These same results could also occur with respect to our other products
which rely on or are built upon the  Castanet  infrastructure.  Furthermore,  we
expect  to  continue  to incur  substantial  costs  in  defending  against  this
litigation  and these costs could  increase  significantly  when the  litigation
proceeds to trial.  It is possible that these costs could  substantially  exceed
our expectations in the shorter term as we prepare for and conduct the trial for
this  litigation,  which we expect to begin on or about November 7, 2000.  There
also can be no assurance that Novadigm will not assert additional claims against
Marimba in the future under the Novadigm Patent or any other patent later issued
to Novadigm.

                                       14
<PAGE>

Our Markets Are Highly Competitive

     Our markets are new, rapidly evolving and highly competitive, and we expect
this competition to persist and intensify in the future. Our failure to maintain
and enhance our  competitive  position  could  seriously  harm our  business and
operating results. We encounter competition from a number of sources, including:

     *    Sellers  of   enterprise-wide   management   systems,   which  include
          electronic software distribution;

     *    Companies  that  market  products  that  support the  distribution  of
          software applications and content; and

     *    Desktop software management suites.

     In addition,  we compete with various  methods of application  distribution
and  management,  including  thin client  systems and the web browser,  and with
application server vendors and others that have introduced software distribution
capabilities into their products.

     Potential  competitors may bundle their products or incorporate an Internet
infrastructure  management  component  into  existing  products in a manner that
discourages  users from  purchasing  our products.  For example,  we expect that
future  releases of  Microsoft's  Windows  operating  systems,  which manage the
programs  on  a  computer,   will   include   components   addressing   Internet
infrastructure management functions.  Furthermore,  new competitors or alliances
among competitors may emerge and rapidly acquire  significant  market share. Our
competitors may be able to respond more quickly to new or emerging  technologies
and changes in customer requirements than we can.

     Some of our competitors have longer operating  histories and  significantly
greater financial,  technical, marketing and other resources than we do. Many of
these  companies  have  more  extensive  customer  bases  and  broader  customer
relationships that they could leverage, including relationships with many of our
current and potential  customers.  These companies also have  significantly more
established customer support and professional service  organizations than we do.
In addition,  these companies may adopt aggressive pricing policies which we are
unable to match.  In the past, we have lost  potential  customers to competitors
for various reasons, including lower prices.

Protection of Our Intellectual Property Is Limited

     We rely on a combination of patent,  trademark,  trade secret and copyright
law and  contractual  restrictions  to protect  the  proprietary  aspects of our
technology. These legal protections afford only limited protection.  Despite our
efforts to protect our proprietary rights,  unauthorized  parties may attempt to
copy aspects of our products or to obtain and use our  proprietary  information.
Litigation  may be necessary to enforce our  intellectual  property  rights,  to
protect  our  trade  secrets  and to  determine  the  validity  and scope of the
proprietary rights of others. For example, on July 30, 1999 we filed a complaint
against  Novadigm  alleging  patent  infringement  (see Part II,  Item 1 - Legal
Proceedings). Such litigation could result in substantial costs and diversion of
resources  and could  seriously  harm our business and  operating  results.  The
lawsuit is at a preliminary  stage, and we cannot assure you that the outcome of
this  litigation  will be  favorable  to us. In  addition,  we sell our products
internationally,  and the laws of many countries do not protect our  proprietary
rights as well as the laws of the United States.

We May Be Found to Infringe Proprietary Rights of Others

     Other  companies,  including our  competitors,  may obtain patents or other
proprietary rights that would prevent, or limit or interfere with our ability to
make, use or sell our products.  As a result, we may be found to infringe on the
proprietary rights of others. Furthermore,  companies in the software market are
increasingly  bringing suits alleging  infringement of their proprietary rights,
particularly  patent  rights.  We could  incur  substantial  costs to defend any
litigation,  and  intellectual  property  litigation could force us to do one or
more of the following:

     *    Cease  selling,  incorporating  or using  products  or  services  that
          incorporate the challenged intellectual property;

     *    Obtain  a  license  from  the  holder  of the  infringed  intellectual
          property right; and

     *    Redesign products or services.

                                       15
<PAGE>

     In the  event of a  successful  claim of  infringement  against  us and our
failure or  inability  to license the  infringed  technology,  our  business and
operating  results  would be  significantly  harmed.  For a  description  of our
current  litigation  with  Novadigm,  Inc.  please  see Part II,  Item 1 - Legal
Proceedings in this report.

We Depend upon Third-Party  Distribution  Relationships  and Need to Develop New
Relationships

     We have a limited number of  distribution  relationships  and we may not be
able to  increase  our number of  distribution  relationships  or  maintain  our
existing  relationships.  For  example,  Netscape,  a  former  reseller  of  our
products,  accounted for a significant  amount of our revenues in 1998 and 1997,
but is no longer a reseller of our products.

     Our  current  agreements  with our channel  partners  do not prevent  these
companies from selling products of other companies,  including products that may
compete with our  products,  and do not  generally  require  these  companies to
purchase  minimum  quantities of our  products.  These  distributors  could give
higher  priority to the products of other  companies  or to their own  products,
than they give to our  products.  In  addition,  sales  through  these  channels
generally result in lower fees to Marimba than direct sales. As a result,  while
the loss of, or  significant  reduction in sales volume to any of our current or
future  distribution  partners  could  seriously harm our revenues and operating
results,  a  significant  increase in sales through  these  channels  could also
negatively impact our gross margins.

We Need to Develop and Expand Our Sales, Marketing and Distribution Capabilities

     We need to expand our  marketing  and direct sales  operations  in order to
increase  market  awareness  of our  products,  market our products to a greater
number of enterprises and generate  increased  revenues.  Recently,  we have not
been able to hire employees as quickly as planned.  In  particular,  competition
for qualified  sales  personnel is intense and we may not be able to hire enough
qualified  sales  personnel in the future.  Our products and services  require a
sophisticated  sales effort  targeted at senior  management  of our  prospective
customers.  New hires require extensive training and typically take at least six
months to achieve full  productivity.  In addition,  we have limited  experience
marketing our products broadly to a large number of potential customers.

We Need to Expand Our Professional Services

     We may not be able to  attract,  train  or  retain  the  number  of  highly
qualified  services personnel that our business needs. We believe that growth in
our  product  sales  depends  on our  ability  to  provide  our  customers  with
professional  services and to educate  third-party  resellers and consultants on
how to provide similar services.  As a result, we plan to increase the number of
our services personnel to meet these needs.  However,  competition for qualified
services personnel is intense.

     We expect our total service  revenues to increase as we continue to provide
support,  consulting and training  services that  complement our products and as
our installed customer base grows. This could negatively impact our gross margin
because margins on revenues derived from services are generally lower than gross
margins on revenues derived from the license of our products.

Expanding  Internationally  Is  Expensive,  We May  Receive No Benefit  from Our
Expansion  and  Our   International   Operations  Are  Subject  to  Governmental
Regulation

     We plan to increase our international sales force and operations.  However,
we may not be successful in increasing our international sales. In addition, our
international  business activities are subject to a variety of risks,  including
the  adoption  of or changes in laws,  currency  fluctuations,  actions by third
parties and political and economic  conditions  that could restrict or eliminate
our  ability to do  business  in  foreign  jurisdictions.  To date,  we have not
adopted a hedging  program  to protect us from  risks  associated  with  foreign
currency fluctuations.

     Export  clearances,  and in some cases,  import clearances must be obtained
before  our  products  can  be  distributed  internationally.   Current  or  new
government  laws  and  regulations,  or the  application  of  existing  laws and
regulations, could expose us to significant liabilities,  significantly slow our
growth and seriously harm our business and operating results.

                                       16
<PAGE>

We Must Manage Our Growth and Expansion

     Our  historical  growth has  placed,  and any  further  growth is likely to
continue to place, a significant strain on our resources.  Any failure to manage
growth effectively could seriously harm our business and operating  results.  To
be  successful,  we will need to  implement  additional  management  information
systems, improve our operating, administrative, financial and accounting systems
and  controls,  train new employees and maintain  close  coordination  among our
executive,   engineering,   finance,  legal,  marketing,  sales  and  operations
organizations.  In addition, our growth has resulted, and any future growth will
result, in increased responsibilities for management personnel.

We Rely on Third-Party Software and Applications

     We  integrate  third-party  security  and  encryption  software and digital
certificates as a component of our software.  There are inherent  limitations in
the use and  capabilities  of much of the technology  that we license from third
parties.  As a  result,  we face a number of  challenges  in  integrating  these
technologies  into our products.  We would be seriously  harmed if the providers
from whom we license software ceased to deliver and support  reliable  products,
enhance their current  products or respond to emerging  industry  standards.  In
addition,  the  third-party  software  may not continue to be available to us on
commercially  reasonable  terms or at all. The loss of, or inability to maintain
or obtain  this  software,  could  result  in  shipment  delays  or  reductions.
Furthermore,  we might be forced to limit the features  available in our current
or  future  product  offerings.  Either  alternative  could  seriously  harm our
business and operating results.

     Almost all of our  products  are written in Java and require a Java virtual
machine made available by Sun  Microsystems,  Inc. in order to operate.  Sun may
not  continue  to  make  these  implementations  of the  Java  virtual  machines
available at commercially  reasonable terms or at all. Furthermore,  if Sun were
to make  significant  changes to the Java  language or its Java virtual  machine
implementations,  or fail to correct  defects and limitations in these products,
our ability to continue to improve and ship our products  could be impaired.  In
the future, our customers may also require the ability to deploy our products on
platforms for which technically  acceptable Java  implementations  either do not
exist or are not available on commercially  reasonable  terms. Our customers may
also use particular  implementations of the Java virtual machine that may not be
technically or commercially acceptable for integration into our products.

Software Defects in Our Products Would Harm Our Business

     Complex  software  products  like ours  often  contain  errors or  defects,
including  errors relating to security,  particularly  when first  introduced or
when new versions or enhancements are released. Our products extensively utilize
digital  certificates and other complex  technology.  Our use of this technology
has in the past and may in the future result in product behavior  problems which
may not be  anticipated by us or our  customers.  For example,  most versions of
Castanet  shipped before  Castanet 4.0 contain digital  certificates  that cause
Castanet and any applications being delivered with Castanet to stop running when
the  certificate  used  expires.  We have  developed an update which avoids this
problem and have distributed the update to customers. It is possible that we may
not have  identified all affected  customers.  Customers that do not install the
update will experience this problem with respect to any  applications  they have
deployed with  Castanet and signed with a certificate  on the date of expiration
of the certificate  they elected to use.  Defects or errors in current or future
products  could result in lost revenues or a delay in market  acceptance,  which
would seriously harm our business and operating results.

     Since  many  of  our  customers  use  our  products  for  business-critical
applications,  errors,  defects or other  performance  problems  could result in
financial or other damage to our customers and could significantly  impair their
operations.  Our customers could seek damages for losses related to any of these
issues. For example,  we could be subject to claims for losses by customers that
we are unable to identify and notify and, as a result, do not install our update
that avoids the digital  certificate  problem. A product liability claim brought
against us, even if not successful, would likely be time consuming and costly to
defend and could adversely affect our marketing efforts.

                                       17
<PAGE>

Volatility of Stock Price

     The market  price of our common stock has been and is likely to continue to
be highly  volatile.  The market price of our common stock may be  significantly
affected by factors such as actual or anticipated  fluctuations in our operating
results,  announcements  of  technological  innovations,  new  products  or  new
contracts  by us or our  competitors,  developments  with  respect to patents or
proprietary rights and related litigation,  adoption of new accounting standards
affecting the software industry, general market conditions and other factors. In
addition,  the stock market has from time to time experienced  significant price
and volume fluctuations that have particularly affected the market price for the
common stock of technology  companies.  These types of broad market fluctuations
may  adversely  affect  the  market  price of our  common  stock.  In the  past,
following  periods of volatility in the market price of a company's  securities,
securities  class  action  litigation  has often been  initiated  against such a
company. Such litigation against Marimba could result in substantial costs and a
diversion of our attention  and  resources  and seriously  harm our business and
operating results.

Our Future Capital Needs Are Uncertain

     We expect that our current cash, cash  equivalents and investments  will be
sufficient  to meet our working  capital and  capital  expenditure  needs for at
least twelve  months.  After that, we may need to raise  additional  funds,  and
additional  financing may not be available on favorable  terms,  if at all. This
could  seriously  harm our business and operating  results.  Furthermore,  if we
issue additional equity securities,  stockholders may experience  dilution,  and
the new equity  securities could have rights senior to those of existing holders
of our common stock. If we cannot raise funds, if needed,  on acceptable  terms,
we may not be able to develop or enhance our products,  take advantage of future
opportunities or respond to competitive pressures or unanticipated requirements.

We Face Challenges Stemming from Our Emerging Markets

     The  market  for  Internet  infrastructure  management  software  has  only
recently  begun  to  develop,  is  rapidly  evolving  and  will  likely  have an
increasing number of competitors.  We cannot be certain that a viable market for
our  products  will emerge or be  sustainable.  If the  Internet  infrastructure
management market fails to develop,  or develops more slowly than expected,  our
business and operating results would be seriously harmed.

     Furthermore,  in order to be successful in this emerging market, we must be
able to  differentiate  Marimba  from our  competitors  through  our product and
service  offerings  and brand  name  recognition.  We may not be  successful  in
differentiating  Marimba  or  achieving  widespread  market  acceptance  of  our
products and  services.  Furthermore,  enterprises  that have  already  invested
substantial   resources  in  other  methods  of  deploying  and  managing  their
applications  and services may be reluctant or slow to adopt a new approach that
may replace, limit or compete with their existing systems.

We Depend on Continued Use of the Internet and Growth of Electronic Business

     Rapid growth in the use of and  interest in the Internet has occurred  only
recently.  As a  result,  acceptance  and use may not  continue  to  develop  at
historical rates, and a sufficiently  broad base of consumers may not adopt, and
continue to use, the Internet and other online services as a medium of commerce.
Demand and market acceptance for recently  introduced services and products over
the  Internet  are subject to a high level of  uncertainty,  and there exist few
proven services and products.

     In addition,  the  Internet  may not be accepted as a long-term  commercial
marketplace  for  a  number  of  reasons,   including   potentially   inadequate
development of the necessary network  infrastructure  or delayed  development of
enabling technologies and performance improvements.  Our success will depend, in
large part,  upon third  parties  maintaining  the  Internet  infrastructure  to
provide a reliable  network  backbone with the necessary  speed,  data capacity,
security and hardware necessary for reliable Internet access and services.

We Must Respond to Rapid Technological Change and Evolving Industry Standards

     The markets for our Internet infrastructure management solutions are marked
by  rapid  technological   change,   frequent  new  product   introductions  and
enhancements,  uncertain  product life cycles,  changes in customer  demands and
evolving  industry  standards.  New products  based on new  technologies  or new
industry   standards  can  quickly  render   existing   products   obsolete  and
unmarketable.  Any delays in our ability to develop and release  enhanced or new
products could seriously harm our business and operating results. Our technology
is  complex,  and  new  products  and  product  enhancements  can  require  long
development and testing periods.  Our failure to conform to prevailing standards
could have a negative effect on our business and operating results.

                                       18
<PAGE>

We Face Risks Associated with Potential Acquisitions

     We may make acquisitions in the future. Acquisitions of companies, products
or technologies  entail  numerous risks,  including an inability to successfully
assimilate   acquired   operations  and  products,   diversion  of  management's
attention,   loss  of  key  employees  of  acquired  companies  and  substantial
transaction  costs.  Some  of the  products  acquired  may  require  significant
additional  development before they can be marketed and may not generate revenue
at  anticipated  levels.  Moreover,  future  acquisitions  by us may  result  in
dilutive  issuances of equity  securities,  the  incurrence of additional  debt,
large  one-time  write-offs  and the  creation of  goodwill or other  intangible
assets  that could  result in  significant  amortization  expense.  Any of these
problems or factors could seriously harm our business,  financial  condition and
operating results.

ITEM 3. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

     We develop  products in the United States and sell in North  America,  Asia
and Europe.  As a result,  our  financial  results  could be affected by various
factors,  including  changes in foreign currency exchange rates or weak economic
conditions in foreign markets.  As all sales are currently made in U.S. dollars,
strengthening  of the dollar could make our products less competitive in foreign
markets.

     Our interest  income is  sensitive to changes in the general  level of U.S.
interest  rates,  particularly  since the  majority of our funds are invested in
instruments with maturities less than two years. Our policy is to limit the risk
of principal loss and ensure the safety of invested funds by limiting market and
credit risk. Funds in excess of current  operating  requirements are invested in
obligations  of the  U.S.  government  and its  agencies  and  investment  grade
obligations of state and local  governments and large  corporations.  Due to the
nature of our  investments,  we have concluded that there is no material  market
risk exposure. Therefore, no quantitative tabular disclosures are required.

                                       19
<PAGE>

PART II.        OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

Novadigm v. Marimba

     On  March  3,  1997,  Novadigm  filed a  complaint  against  us in the U.S.
District Court for the Northern District of California, alleging infringement by
us of a patent  held by  Novadigm  (U.S.  Patent No.  5,581,764,  the  "Novadigm
Patent"). Novadigm alleges that our infringement relates to specific methods for
updating data and software  over a computer  network that we use in our Castanet
products. Novadigm later identified claims 1, 4, 5, 23, 24, 25, 31, 33 and 34 of
the Novadigm  Patent as being  infringed.  In its complaint,  Novadigm  requests
preliminary and permanent injunctions prohibiting us and other specified persons
from making, using or selling any infringing products, and claims damages, costs
and attorneys' fees. The complaint also alleges that we have willfully infringed
the Novadigm Patent and seeks up to triple damages under the U.S. Patent Act.

     On May 2, 1997,  we filed our answer to  Novadigm's  complaint  and filed a
counterclaim  against  Novadigm.  Our answer denies  Novadigm's  allegations and
asserts  defenses to  Novadigm's  claim.  Our  counterclaim  seeks a declaratory
judgment  that we do not  infringe  the  Novadigm  Patent and that the  Novadigm
Patent is invalid and unenforceable.

     On August 25,  1997 and  January  26,  1998,  we filed  motions for summary
adjudication  asking  the court to rule that one of the  relevant  claims of the
Novadigm  Patent  is  invalid,  because  it was  anticipated  by two  prior  art
references.  The court denied our motions in part,  because:  (1)  discovery was
ongoing;  (2) the court had not had an  opportunity  to  construe  the  relevant
language in the  Novadigm  Patent;  and (3) the court  found there were  triable
issues of fact as to the disclosures in those references.

     On December 17, 1998, the court held a claims  construction  hearing on the
appropriate  interpretation  of particular terms in the Novadigm Patent,  and on
December 28, 1998, the court issued an order defining those terms.

     On February  12,  1999,  Novadigm  detailed  its position as to why certain
versions of Castanet  infringe  the asserted  claims of the Novadigm  Patent and
contended that the alleged  comparison of file level and channel level checksums
in  non-optimized  updating and the  comparison of channel  level  checksums and
their associated update commands in optimized  updating  infringes the claims of
the Novadigm  Patent.  We do not believe  that  Novadigm  accurately  states the
functionality  of Castanet or establishes  that Castanet  infringes the Novadigm
Patent.

     During  March and  April  1999,  Marimba  and  Novadigm  each  filed  three
dispositive  motions  in  advance  of the  April 9,  1999  deadline  for  filing
dispositive  motions in this case. We filed two motions seeking summary judgment
that  different  versions of Castanet do not infringe the Novadigm  Patent and a
motion seeking  summary  judgment that the Novadigm Patent is invalid because it
was  anticipated by a prior art reference.  Novadigm filed three motions seeking
to limit  certain  defenses  we could  raise at trial.  The court  denied all of
Marimba's and all of Novadigm's dispositive motions without a hearing. On May 1,
2000,  Marimba filed a motion seeking summary  judgment that the claims Novadigm
asserts to be infringed in this action are invalid for failure by the  inventors
of the  Novadigm  Patent to  disclose  their  best mode of making  and using the
claimed invention. A court denied Marimba's motion after a hearing.

     On July 22, 1999, the court held a pre-trial  conference at which the court
canceled the prior September 20, 1999 trial date in this matter.  The court then
scheduled a trial on our defense of inequitable  conduct by Novadigm to begin on
November  15,  1999 and  stated  that at the  conclusion  of that trial it would
schedule  a jury  trial  for the  remaining  issues,  which  would  include  the
infringement  claims  against  us and our other  defenses.  The court  separated
Marimba's  defense that the Novadigm Patent is invalid for  inequitable  conduct
before the U.S.  Patent Office from  Marimba's  other defenses that the Novadigm
Patent is  invalid on other  grounds  and that  Marimba  does not  infringe  the
Novadigm Patent. A trial on Marimba's  inequitable conduct defense was held from
November  15 to  November  18,  1999.  In its  subsequent  findings  of fact and
conclusions of law, the court found no inequitable  conduct and struck Marimba's
inequitable conduct defense.

                                       20
<PAGE>

     The  trial on  Novadigm's  infringement  claims,  and  Marimba's  remaining
invalidity and non-infringement  defenses,  is scheduled to begin on November 7,
2000. A case  management  conference  is  scheduled to be held on September  18,
2000, at which the court may change the trial date.  To date,  both parties have
substantially completed their factual and expert discovery.

     We  believe  that we  have  strong  defenses  against  Novadigm's  lawsuit.
Accordingly,  we intend to defend  this  suit  vigorously.  However,  we may not
prevail in this  litigation.  Litigation  is subject to inherent  uncertainties,
especially  in cases such as this where  sophisticated  factual  issues  must be
assessed  and  complex  technical  issues must be decided.  In  addition,  cases
similar to this  involve  issues of law that are  evolving,  presenting  further
uncertainty.  Our defense of this  litigation,  regardless  of the merits of the
complaint, has been, and will likely continue to be, time-consuming,  costly and
a diversion for our technical and management personnel.  In addition,  publicity
related to this litigation has in the past, and will likely in the future,  have
a negative impact on the sale of our Castanet products.

     A failure to prevail in the litigation could result in:

     *    our  paying   monetary   damages,   which  could  be  tripled  if  the
          infringement  is found to have been  willful,  and  which may  include
          paying an  ongoing  royalty  to  Novadigm  for the  sales of  Castanet
          products or paying lost  profits to Novadigm for  particular  sales in
          which we competed with Novadigm and closed a sale;

     *    the issuance of a preliminary or permanent  injunction requiring us to
          stop selling Castanet in its current form;

     *    our  having to  redesign  Castanet,  which  could be  costly  and time
          consuming and could substantially  delay Castanet shipments,  assuming
          that a redesign is feasible;

     *    our having to  reimburse  Novadigm  for some or all of its  attorneys'
          fees;

     *    our having to obtain  from  Novadigm a license  to its  patent,  which
          license  might  not  be  made  available  to us on  reasonable  terms,
          particularly because Novadigm is a competitor; and/or

     *    our having to  indemnify  our  customers  against  any losses they may
          incur due to the alleged infringement.

     Any of these  results  would  seriously  harm our  business  and  operating
results.  Furthermore,  we  expect to  continue  to incur  substantial  costs in
defending  against this litigation and these costs could increase  significantly
if  our  dispute  goes  to  trial.   It  is  possible  that  these  costs  could
substantially exceed our expectations in future periods.

Marimba v. Novadigm

     On July 30, 1999,  Marimba filed a complaint  against  Novadigm in the U.S.
District Court for the Northern District of California alleging  infringement by
Novadigm  of a patent  held by us  (U.S.  Patent  No.  5,919,247,  the  "Marimba
Patent").  Our complaint  seeks  monetary  damages,  as well as an injunction to
prevent Novadigm from making, using or selling infringing software products. Our
complaint also alleges that Novadigm has willfully  infringed the Marimba Patent
and seeks up to triple  damages  under the United States Patent Act. The lawsuit
is at a  preliminary  stage,  and we cannot  assure you that the outcome of this
litigation  will  be  favorable  to  us.  In  addition,   due  to  the  inherent
uncertainties  in litigation we cannot determine the total expense or other harm
that we may incur as a result of  litigation,  arbitration  or settlement of our
dispute with Novadigm.


ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

                                       21
<PAGE>

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

     At  Marimba's   Annual  Meeting  of  Stockholders  on  June  8,  2000,  our
stockholders voted on the following proposals:

     1.   Proposal to elect directors:

                                       For             Withheld         Unvoted
                                   ----------          --------         -------
          Kim K. Polese            19,695,464           25,700              0
          Arthur A. van Hoff       19,699,422           21,742              0
          Steven P. Williams       19,699,422           21,742              0
          Aneel Bhusri             19,699,422           21,742              0
          Raymond J. Lane          19,699,422           21,742              0
          Douglas J. MacKenzie     19,699,422           21,742              0
          Stratton D. Sclavos      19,699,422           21,742              0


     2.   Proposal  to ratify the  selection  of Ernst & Young LLP as  Marimba's
          independent auditors for the fiscal year ending December 31, 2000:

          For:                     19,707,913
          Against:                      5,501
          Abstain:                      7,750
          Unvoted:                          0


ITEM 5. OTHER INFORMATION.

     On July 21, 2000, John F. Olsen was appointed President and Chief Executive
Officer  of  Marimba  and Kim K.  Polese  became  Marimba's  Chairman  and Chief
Strategy  Officer.  Mr.  Olsen  also  was  appointed  a member  of the  Board of
Directors on such date.  Concurrent  with Mr.  Olsen's  addition to the Board of
Directors,  Arthur A. van Hoff  resigned  as a Board  member.  Mr. van Hoff will
continue in his current role as Chief Technology Officer of Marimba.


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.

(a)     Exhibits.


Exhibit No.    Description
-----------    -----------
27.1           Financial Data Schedule for the period ended June 30, 2000.



(b)     Reports on Form 8-K.

     On July 25, 2000, Marimba filed a report on Form 8-K to report under Item 5
the appointment of John F. Olsen as President and Chief Executive  Officer and a
Board member, as well as the material  compensatory terms of his employment with
Marimba.

                                       22
<PAGE>


                                   SIGNATURE

     Pursuant to the  requirements  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.


                                     MARIMBA, INC.



Date:   August 11, 2000       By:   /s/ Fred M. Gerson
                                    -----------------------------------------
                                    Fred M. Gerson
                                    Vice President and Chief Financial Officer
                                    (Principal Financial and Accounting Officer)

                                       23
<PAGE>


                                 EXHIBIT INDEX


Exhibit No.     Description
-----------     -----------
27.1            Financial Data Schedule for the period ended June 30, 2000.