================================================================================
                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON DC 20549
                            ------------------------

                                   FORM 10-Q/A
(MARK ONE)

[X]   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
     SECURITIES EXCHANGE ACT OF 1934

               FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1998

                                       OR

[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
     SECURITIES EXCHANGE ACT OF 1934

        FOR THE TRANSITION PERIOD FROM                TO

                        COMMISSION FILE NUMBER: 0-26592
                            ------------------------

                            THE VANTIVE CORPORATION
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S>                                           <C>
                   DELAWARE                                     77-0266662
       (STATE OR OTHER JURISDICTION OF                       (I.R.S. EMPLOYER
        INCORPORATION OR ORGANIZATION)                     IDENTIFICATION NO.)
</TABLE>

                              2455 AUGUSTINE DRIVE
                         SANTA CLARA, CALIFORNIA 95054
                                 (408) 982-5700
         (ADDRESS AND TELEPHONE NUMBER OF PRINCIPAL EXECUTIVE OFFICES)
                            ------------------------

     Indicate by check mark whether 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 of the Registrant's $0.001 par value Common Stock
outstanding on August 10, 1998 was 26,106,690.


================================================================================
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements




                            THE VANTIVE CORPORATION

                     CONDENSED CONSOLIDATED BALANCE SHEETS
                                 (IN THOUSANDS)
<TABLE>
<CAPTION>
                                                    June 30,       December 31,
                                                    1998           1997
                                                    ------------   ------------
                                                    (unaudited)
<S>                                                 <C>            <C>
                             ASSETS
CURRENT ASSETS:
  Cash and cash equivalents                             $25,709        $77,583
  Short-term investments                                 75,541         23,800
  Accounts receivable, net                               36,928         33,295
  Prepaid expenses and other current assets              16,151         11,896
                                                    ------------   ------------
          Total current assets                          154,329        146,574
Property and equipment, net                              18,203         12,465
Other assets                                              6,241          3,700
                                                    ------------   ------------
TOTAL ASSETS                                           $178,773       $162,739
                                                    ============   ============

                  LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
  Accounts payable                                       $9,871         $3,680
  Accrued Liabilities                                    22,456         23,868
  Current portion of capital lease obligations              140            270
  Deferred revenues                                      16,569          9,827
                                                    ------------   ------------
          Total current liabilities                      49,036         37,645

Convertible debt                                         69,000         69,000
Capital lease obligations, net of current portion            --             25
Other                                                       282            337

STOCKHOLDERS' EQUITY:
  Preferred Stock: $.001 par value, 2,000,000 
     shares authorized; no shares issued and 
     outstanding at June 30, 1998                            --             --
  Common Stock:  $.001 par value, 50,000,000 
     shares authorized; 26,005,683 shares at 
     June 30, 1998 and 25,275,191 shares at 
     December 31, 1997 issued and outstanding                26             25
  Additional paid-in-capital                             65,646         56,643
  Accumulated Deficit                                    (5,217)          (936)
                                                    ------------   ------------
          Total stockholders' equity                     60,455         55,732
                                                    ------------   ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY             $178,773       $162,739
                                                    ============   ============
</TABLE>
     See accompanying notes.
<PAGE>
                            THE VANTIVE CORPORATION

                 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
                     (IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                         Three Months Ended Six Months Ended
                                              June 30,          June 30,
                                          ----------------- -----------------
                                          1998     1997     1998     1997
                                          -------- -------- -------- --------
<S>                                       <C>      <C>      <C>      <C>
REVENUES 
  License                                 $19,182  $16,893  $41,699  $31,919
  Service                                  18,560    9,117   32,323   16,614
                                          -------- -------- -------- --------
          Total revenues                   37,742   26,010   74,022   48,533
                                          -------- -------- -------- --------
COST OF REVENUES:
  License                                     115      182      319      302
  Service                                  10,937    4,975   18,249    9,019
                                          -------- -------- -------- --------
          Total cost of revenues           11,052    5,157   18,568    9,321
                                          -------- -------- -------- --------
GROSS MARGIN                               26,690   20,853   55,454   39,212
                                          -------- -------- -------- --------
OPERATING EXPENSES 
  Sales and marketing                      16,191   10,674   30,317   20,336
  Research and development                  6,235    3,610   12,179    6,909
  General and administrative                2,860    2,037    5,862    3,756
  Acquired in-process 
   research and development                 8,206      --     8,206      --
  Acquisition-related 
   compensatory expense                     1,290      --     1,290      --
                                          -------- -------- -------- --------
          Total operating expenses         34,782   16,321   57,854   31,001
                                          -------- -------- -------- --------
INCOME (LOSS) FROM OPERATIONS              (8,092)   4,532   (2,400)   8,211
OTHER INCOME                                  213      390      424      757
                                          -------- -------- -------- --------
INCOME (LOSS) BEFORE PROVISION
  FOR INCOME TAXES                         (7,879)   4,922   (1,976)   8,968
PROVISION FOR INCOME TAXES                    121    1,817    2,305    3,314
                                          -------- -------- -------- --------
NET INCOME (LOSS)                         ($8,000)  $3,105  ($4,281)  $5,654
                                          ======== ======== ======== ========

NET INCOME (LOSS) PER BASIC SHARE          ($0.31)   $0.13   ($0.17)   $0.23
                                          ======== ======== ======== ========
NET INCOME (LOSS) PER DILUTED SHARE        ($0.31)   $0.12   ($0.17)   $0.22



BASIC-SHARES USED IN 
 PER SHARE COMPUTATION                     25,666   24,265   25,525   24,230
                                          ======== ======== ======== ========
DILUTED-SHARES USED IN 
 PER SHARE COMPUTATION                     25,666   26,141   25,525   26,178

</TABLE>
     See accompanying notes 
<PAGE>
                            THE VANTIVE CORPORATION
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In Thousands)

<TABLE>
<CAPTION>
                                                              SIX MONTHS ENDED
                                                                  June 30,
                                                       --------------------------
                                                       1998          1997
                                                       ------------  ------------
<S>                                                    <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)                                        ($4,281)       $5,654
  Adjustments to reconcile net income(loss)to net cash
     provided by operating activities:
     Acquired in-process research and development            8,206             --
     Acquisition-related compensatory expense                1,290             --
     Depreciation and amortization                           2,414         1,100
     Provision for sales allowances and
       doubtful accounts                                       696           449
    Changes in net assets and liabilities, net of acquisition --
       Increase in accounts receivable                      (4,322)       (4,777)
       Increase in prepaid expenses and other current assets
       Increase in other assets                             (2,889)         (942)
       Increase in other assets                             (1,170)       (1,040)
       Increase (decrease) in accounts payable and
          accrued liabilities                               (2,078)        2,493
       Increase (decrease) in long-term liabilities           (109)           39
       Increase  in deferred revenues                        5,850         1,132
                                                       ------------  ------------
          Net cash provided by operating activities          3,607         4,108
                                                       ------------  ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
  Purchase of short-term investments                       (51,741)       (2,949)
  Purchase of property and equipment                        (7,517)       (4,221)
  Cash acquired in Wayfarer acquisition                        101             --
                                                       ------------  ------------
          Net cash used in investing activities            (59,157)       (7,170)
                                                       ------------  ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from issuance of common stock                     4,058           638
  Payments on capital lease obligations                       (192)         (237)
                                                       ------------  ------------
          Net cash provided by financing activities          3,866           401
                                                       ------------  ------------
NET DECREASE IN CASH AND CASH EQUIVALENTS                  (51,684)       (2,661)
EFFECT OF EXCHANGE RATE CHANGES ON CASH                       (190)          (14)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD              77,583        26,017
                                                       ------------  ------------
CASH AND CASH EQUIVALENTS, END OF PERIOD                   $25,709       $23,342
                                                       ============  ============
</TABLE>
     See accompanying notes
<PAGE>

        THE VANTIVE CORPORATION
        NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
        (UNAUDITED)


1.      BASIS OF PRESENTATION

        The consolidated financial statements included herein have been
prepared by the Company, without audit, pursuant to the rules and regulations
of the Securities and Exchange Commission.  Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to the rules and regulations.  The Company believes the disclosures
included in the unaudited consolidated financial statements, when read in
conjunction with the financial statements and the notes thereto included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1997, are
adequate to make the information presented not misleading.

        The unaudited consolidated financial statements included herein reflect
all adjustments which are, in the opinion of the Company's management,
necessary for a fair presentation of the information for the periods presented.
 These adjustments are of a normal, recurring nature.  Operating results for
the three and six months ended June 30, 1998 are not necessarily indicative of
the results expected for any future periods.

2. ACQUISITION

In June 1998, the Company acquired Wayfarer Communications, Inc. ("Wayfarer"),
a privately held California corporation that specializes in web-based
information delivery by merging a wholly owned subsidiary of the Company into
Wayfarer (the "Acquisition").  The Company issued 163,969 shares of its common
stock and assumed all outstanding warrants, which were converted to 2,251
shares of the Company's common stock in exchange for approximately 89% of
Wayfarer shares.  In addition, the Company received $101,000 in cash as part of
the acquisition.  The Company anticipates that it will record charges
associated with acquiring the remaining minority interest of approximately 11%
upon the completion of the acquisition of the remaining shares in the quarter
ending September 30, 1998.  The Acquisition was recorded under the purchase
method of accounting and the results of operations of Wayfarer and the fair
value of the acquired assets and liabilities were included in the Company's
financial statements beginning on the acquisition date.  A Form 8-K was filed
by the Company on July 15, 1998 in connection with the acquisition.  

In connection with the Acquisition, acquired in-process research and
development of approximately $8.2 million associated with the 89% acquired
interest was expensed in the quarter ended June 30, 1998.   The Company
anticipates that an additional in-process research and development charge of
approximately $1.0 million, associated with the acquisition of the remaining
minority interest will be charged in the quarter ending September 30, 1998. 
The Company has also recorded a compensatory expense of $1.3 million associated
with the Acquisition for the quarter ended June 30, 1998.  An additional
compensatory expense of approximately $300,000 is expected to be charged in
each of the quarters ending September 30, 1998 and December 31, 1998.  The
remaining intangibles were recorded as goodwill and will be amortized on a
straight-line basis over five years.  

The following table presents the unaudited pro forma results assuming that the
Company had acquired Wayfarer at the beginning of 1998 and 1997, respectively. 
Net income and basic and diluted earnings per share amounts have been adjusted
to exclude the write-off of acquired in process research and development of
approximately $8.2 million and the acquistion-related compensatory expense of
$1.2 million and include the goodwill amortization of approximately $98,000 for
the six months ended June 30, 1998 and 1997. This information may not
necessarily be indicative of the future combined results of operations of the
Company.

<TABLE>
<CAPTION>
                                         (In thousands except per share data)
                                                       Six Months Ended
                                                          June 30,
                                                      -----------------
                                                      1998     1997
                                                      -------- --------
<S>                                                   <C>      <C>
Revenues                                              $74,070  $49,034
Net Income                                             $1,517   $3,227
Basic earnings  per share                               $0.06    $0.13
Diluted earnings  per share                             $0.06    $0.12

</TABLE>


3.      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

        Principles of Consolidation

        The consolidated financial statements include the accounts of the
Company and its subsidiaries.  All intercompany accounts and transactions have
been eliminated in consolidation.

        Cash and Cash Equivalents

        For purposes of the Statements of Cash Flows, the Company considers all
highly liquid investments with an original maturity of 90 days or less to be
cash equivalents.  Cash equivalents primarily consist of certificates of
deposit, money market accounts, treasury bills and commercial paper with a
maturity of less than 90 days.

        Investments

        The Company accounts for its investments under the provision of
Statement of Financial Accounting Standards No.  115 (SFAS 115), "Accounting
for Certain Investments in Debt and Equity Securities."  The Company has
classified all marketable debt securities and long-term debt investments as
held-to-maturity and has accounted for these investments at amortized cost.

        Revenue Recognition

        The Company generates revenues from licensing the rights to use its
software products directly to end-users and indirectly through sublicense fees
from resellers.  The Company also generates revenues from sales of customer
support, consulting and training services performed for customers that license
its products.

        Revenues from software license agreements are recognized upon shipment
of the software if collection is probable, payment is due within one year, the
fee is fixed or determinable and vendor specific evidence exists to allocate
the total fee to all elements of the arrangement.  If an acceptance period is
required, revenues are recognized upon the earlier of customer acceptance or
the expiration of the acceptance period.  If significant post-delivery
obligations exist or if a product is subject to customer acceptance, revenues
are deferred until no significant obligations remain or acceptance has
occurred.  Revenues from services have to date consisted primarily of
consulting revenues, customer support revenues and, to a lesser extent,
training revenues.  The Company enters into reseller arrangements that
typically provide for sublicense fees payable to the Company based on a percent
of the Company's list price. Sublicense fees are generally recognized as
reported by the reseller in re-licensing the Company's products to end-users. 
In certain circumstances, sublicense fees are recognized upon the initial sale
if all products subject to sublicensing are shipped in the current period, no
rights of return policy exists, collection is probable, payment is due within
one year, and the fee is fixed and determinable.  If these conditions are not
met, the Company does not recognize sublicense fees until reported by the
reseller in re-licensing the Company's products to end-users.

        Revenues from customer support services are recognized ratably over the
term of the support period.  If customer support services are included free or
at a discount in a license agreement, these amounts are allocated out of the
license fee at their fair market value based on the value established by
independent sale of the customer support services to customers.  Consulting
revenues are primarily related to implementation services performed on a time
and materials basis under separate service arrangements related to the
installation of the Company's software products. Revenues from consulting and
training services are recognized as services are performed.  If a transaction
includes both license and service elements, license fee revenue is recognized
upon shipment of the software, provided services do not include significant
customization or modification of the base product and the payment terms for
licenses are not subject to acceptance criteria.  In cases where license fee
payments are contingent upon the acceptance of services, revenues from both the
license and the service elements are deferred until the acceptance criteria are
met.

        Cost of license revenues includes the costs of product media, product
duplication and manuals.  Cost of service revenues is primarily comprised of
employee-related costs and fees for third-party consultants incurred in
providing consulting, customer support and training services.

        Deferred revenues primarily relate to customer support fees, which have
been paid by the customers prior to the performance of these services.


Software Development Costs

        The Company capitalizes internally generated software development costs
under the provision of Statement of Financial Accounting Standards No.  86
(SFAS 86), "Accounting for Costs of Computer Software to be Sold, Leased or
Otherwise Marketed."  Capitalization of computer software development costs
begins upon the establishment of technological feasibility, which the Company
has defined as completion of a working model.  Internally generated
capitalizable software development costs have not been material for the periods
presented and thus, the Company has charged its software development costs to
research and development expense in the accompanying consolidated statements of
operations.


Earnings per Share:

        Statement of Financial Accounting Standards No. 128 (SFAS 128),
"Earnings per Share," requires companies to compute net income per share under
two different methods- basic and diluted per share data- for all periods for
which an income statement is presented.  Basic earnings per share is computed
by dividing net income by the weighted average number of common shares
outstanding for the quarters ended June 30, 1998 and 1997.  Diluted earnings
per share reflects the potential dilution that could occur if the income were
divided by the weighted-average number of common and potential common shares
outstanding during the period. Diluted earnings per share is computed by
dividing net income by weighted average number of common shares and common
stock equivalents from outstanding stock options for the quarter ended June 30,
1997.  Common stock equivalents are calculated using the treasury stock method
and represent incremental shares issuable upon exercise of the Company's
outstanding options.  For the quarter and the six months ended June 30, 1998,
net loss per diluted share is based on weighted average common shares and
excludes any common stock equivalents as they would be anti-dilutive due to the
reported loss. The following table provides a reconciliation of the numerators
and denominators used in calculating basic and diluted earnings per share for
the three and six months ended June 30, 1998 and 1997.

<TABLE>
<CAPTION>
                                           (In thousands except per share data)
                                         Three Months Ended  Six Months Ended
                                              June 30,          June 30,
                                          ----------------- -----------------
                                          1998     1997     1998     1997
                                          -------- -------- -------- --------
<S>                                       <C>      <C>      <C>      <C>
Net income (loss)                         ($8,000)  $3,105  ($4,281)  $5,654
Basic Earnings Per Share:
  Income (loss) available to
    common shareholders                   ($8,000)  $3,105  ($4,281)  $5,654

   Weighted average common 
     shares outstanding                    25,666   24,265   25,525   24,230
                                          -------- -------- -------- --------
Basic earnings (loss) per share:           ($0.31)   $0.13   ($0.17)   $0.23
                                          -------- -------- -------- --------
Diluted Earnings Per Share:
  Income (loss) available to
    common shareholders                   ($8,000)  $3,105  ($4,281)  $5,654
   Weighted average common 
     shares outstanding                    25,666   24,265   25,525   24,230
   Common stock equivalents                    --    1,876     --     1,948
                                          -------- -------- -------- --------
     Total weighted average common shares
       and equivalents                     25,666   26,141   25,525   26,178
                                          -------- -------- -------- --------
Diluted earnings (loss) per share:         ($0.31)   $0.12   ($0.17)   $0.22
                                          -------- -------- -------- --------

</TABLE>

Approximately 1.8 million and 1.9 million shares of weighted average common
stock equivalents were excluded in the computation of diluted earnings per
share during the quarter and the six months ended June 30, 1998, respectively
as a result of their anti-dilutive effect due to the reported loss. 
Approximately 900,000 and 1.7 million shares of weighted average common stock
equivalents were excluded in the computation of diluted earnings per share for
the quarter and six months ended June 30, 1997 respectively, because the
options' exercise price was greater than the average market price of the common
shares.

Stock Option Repricing Program:

        Effective as of July 27, 1998, the Compensation Committee of the
Company's Board of Directors authorized employees the right to exchange certain
outstanding stock options for option grants with an exercise price of $13.25
per share (the fair market value on July 24, 1998), provided that such
employees made the election to convert by that date.  In connection to the
reprice, optionholders who exchange their options will not be permitted to
exercise any exchanged options for a six-month period beginning on the
effective date of the exchange.

Convertible Subordinated Notes

        On August 21, 1997, the Company sold an aggregate of $69.0 million in
principal amount of convertible subordinated notes, due August 2002, to certain
investors and incurred approximately $2.4 million of offering expenses in
connection with this issuance.  These notes have a 4.75% coupon over a
five-year term and are convertible into the Company's common stock at the
investor's option, if and when the share price exceeds $41.93 per share.

Comprehensive Income

In June 1997, the Financial Accounting Standards Board issued SFAS No. 130
(SFAS 130), "Reporting Comprehensive Income," which establishes standards for
reporting and display of comprehensive income and its components (revenue,
expenses, gains and losses) in a full set of general-purpose financial
statements.  The following table reconciles comprehensive income under the
provisions of SFAS 130 for the three and six months ended June 30, 1998 and
1997.
<TABLE>
<CAPTION>
                                           (In thousands except per share data)
                                         Three Months Ended Six Months Ended
                                              June 30,          June 30,
                                          ----------------- -----------------
                                          1998     1997     1998     1997
                                          -------- -------- -------- --------
<S>                                       <C>      <C>      <C>      <C>
Net income (loss)                         ($8,000)  $3,105  ($4,281)  $5,654
Other Comprehensive income 
       (loss), net of tax:
   Unrealized Currency gain (loss)           (142)      31     (114)      (8)
                                          -------- -------- -------- --------
Comprehensive income (loss)               ($8,142)  $3,136  ($4,395)  $5,646
                                          -------- -------- -------- --------
</TABLE>

Property

In June 1998, the Company entered into a seven year agreement whereby it leased
new facilities in Santa Clars for a total commitment of $18.4 million. The
Company will occupy the facilities on an incremental basis over term of the
lease and has various options to extend term of lease, if deemed necessary, or
to terminate the lease in accordance with provisions of the agreement.  

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

                              THE VANTIVE CORPORATION

Overview

The Company was founded in October 1990 to develop software to enable
businesses to improve their customer service.  The Company's suite of products
addresses the front-office automation market and is called the Vantive
Enterprise.  The Vantive Enterprise consists of the following applications:
Vantive Sales, Vantive Support, Vantive FieldService, Vantive Inventory,
Vantive Procurement, Vantive HelpDesk and Vantive Quality.  The Company made
available Vantive 8 in the second quarter of 1998, which contains significant
enhancements including the integration of Vantive Inventory and Vantive
Procurement and the global Vantive Enterprise with the addition of the Partner
Desktop feature.  License fees for the Company's software products consist of
(i) a per server fee based on the specific Vantive Enterprise application(s)
licensed and (ii) a fee based on the maximum number of concurrent, named or
mobile users allowed to access applications.  Most of the Company's revenues
to date have resulted from non-recurring license fees based on sales of
concurrent user licenses.  The remaining revenues are primarily attributable
to service revenues, which include customer support, consulting and training
revenue.  Of these service revenues, only customer support revenues are
expected to be recurring. Customer support revenues accounted for
approximately 18.3% and 12.6% of total revenues for the quarters ended June
30, 1998 and 1997, respectively, and accounted for approximately 17.2% and
12.5% of total revenues for the first six months of 1998 and 1997,
respectively.  Because concurrent user fees are not application-specific, the
Company cannot precisely determine the breakdown of revenues attributable to
specific applications for customers that have purchased more than one
application.  However, the Company believes that most of its revenues have
been derived from fees associated with Vantive Support, Vantive Sales and, to
a lesser degree, Vantive HelpDesk.  In any period, a significant portion of
the Company's revenues may be derived from large sales to a limited number of
customers.  However, no customer accounted for over 10% of total revenues
during the quarters ended June 30, 1998 and 1997.  As significant sales to a
particular end user customer are typically non-recurring, the Company does not
believe its future results are dependent on recurring revenues from any
particular customer, however the Company has derived recurring revenues from
customers who use the Company's products to deliver software services to other
customers.

The Company's revenues are derived from software license fees and fees for its
services.  License revenues consist of license fees for the Company's products
as well as fees from sublicensing third party software products. The Company
generally recognizes license fees upon shipment of software products if
collection is probable, the license agreement requires payment within one
year, the fee is fixed or determinable and vendor specific evidence exists to
allocate the total fee to all elements of the arrangement.  If significant
post-delivery obligations exist or if a product is subject to customer
acceptance, revenues are deferred until no significant obligations remain or
acceptance has occurred.  Revenues from services have to date consisted
primarily of consulting revenues, customer support revenues and, to a lesser
extent, training revenues.  Consulting and training revenues generally are
recognized as services are performed.  Customer support revenues are
recognized ratably over the term of the support period, which is typically one
year.  If customer support services are included free or at a discount in a
license agreement, such amounts are allocated out of the license fee at their
fair market value based on the value established by independent sale of such
customer support services to customers.  If a transaction includes both
license and service elements, license fee revenue is recognized upon shipment
of the software, provided services do not include significant customization or
modification of the base product and the payment terms for licenses are not
subject to acceptance criteria.  In cases where license fee payments are
contingent upon the acceptance of services, revenues from both the license and
the service elements are deferred until the acceptance criteria are met. 

This Management's Discussion and Analysis of Financial Condition and Results
of Operations includes a number of forward-looking statements which reflect
the Company's current views with respect to future events and financial
performance.  These forward-looking statements are subject to certain risks
and uncertainties, including those discussed below that could cause actual
results to differ materially from historical results or those anticipated. In
this report, the words "anticipate," "believes," "expects," "future,"
"intends," and similar expressions identify forward-looking statements. 
Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof.  Readers should carefully
review the risk factors described in other documents the Company files with
the Securities Exchange Commission, including the Annual Report on Form 10-K
for the fiscal year ended December 31, 1997.  See "Business Risks."

Results of Operations

The following table sets forth the percentages that income statement items are
to total revenues for the three and six months ended June 30, 1998 and 1997.
<TABLE>
<CAPTION>
                                        Three Months Ended  Six Months Ended
                                              June 30,          June 30,
                                          ----------------- -----------------
                                          1998     1997     1998     1997
                                          -------- -------- -------- --------
<S>                                       <C>      <C>      <C>      <C>
REVENUES 
  License                                    50.8%    64.9%    56.3%    65.8%
  Service                                    49.2%    35.1%    43.7%    34.2%
                                          -------- -------- -------- --------
          Total revenues                    100.0%   100.0%   100.0%   100.0%
                                          -------- -------- -------- --------
COST OF REVENUES:
  License                                     0.3%     0.7%     0.4%     0.6%
  Service                                    29.0%    19.1%    24.6%    18.6%
                                          -------- -------- -------- --------
          Total cost of revenues             29.3%    19.8%    25.0%    19.2%
                                          -------- -------- -------- --------
GROSS MARGIN                                 70.7%    80.2%    75.0%    80.8%
                                          -------- -------- -------- --------
OPERATING EXPENSES 
  Sales and marketing                        42.9%    42.9%    53.8%    42.0%
  Research and development                   16.5%    14.7%    16.5%    14.2%
  General and administrative                  7.6%     7.8%     7.9%     7.7%
  Acquired in-process 
   research and development                  21.7%      --     11.1%      --
  Acquisition-related 
   compensatory expense                       3.4%      --      1.7%      --
                                          -------- -------- -------- --------
          Total operating expenses           92.2%    62.8%    78.2%    63.9%
                                          -------- -------- -------- --------
INCOME (LOSS) FROM OPERATIONS             (-21.5%)    17.4%  (-3.2%)    16.9%
OTHER INCOME                                  0.6%     1.5%     0.5%     1.6%
                                          -------- -------- -------- --------
INCOME (LOSS) BEFORE PROVISION
  FOR INCOME TAXES                        (-20.9%)    17.9%  (-2.7%)    18.5%
PROVISION FOR INCOME TAXES                    0.3%     6.0%     3.1%     6.9%
                                          -------- -------- -------- --------
NET INCOME (LOSS)                         (-21.2%)    11.9%  (-5.8%)    11.6%
                                          ======== ======== ======== ========
</TABLE>

Revenues

License.  The Company increased its license revenues by 13.6% to $19.2 million
from $16.9 million for the three months ended June 30, 1998 and 1997,
respectively, and by 30.6% to $41.7 million from $31.9 million in the first
six months of June 30, 1998 and 1997, respectively.  The increase in license
revenues was due to market growth for the Company's products.  The Company
does not believe that the historical growth rates of license revenues will
necessarily be sustainable or are indicative of future results.

Service.  Service revenues are primarily comprised of fees from consulting,
customer support and, to a lesser extent, training services.  Service revenues
increased by 103.6% to $18.6 million from $9.1 million for the three months
ended June 30, 1998 and 1997, respectively, and by 94.6% to $32.3 million from
$16.6 million in the first six months of June 30, 1998 and 1997, respectively.
 The increase in service revenues was primarily due to the increased demand
for consulting, customer support and, to a lesser extent, training services
associated with sales of the Company's applications.  As the Company
implements its strategy of encouraging third party organizations such as
systems integrators to become proficient in implementing the Company's
products, consulting revenues as a percentage of total revenues may decrease,
but demand for consulting services provided by the Company has continued to
grow even while the Company has pursed this strategy.  


Cost of Revenue

License.  Cost of license revenues includes the cost of product media, product
duplication and manuals.  Cost of license revenues decreased by 36.8% to
$115,000, or 0.8% of the related license revenues from $182,000, or 1.1% of
related license revenues for the three months ended June 30, 1998 and 1997,
respectively.  The decrease in cost of license revenues as a percentage of the
related license revenues was primarily due to the costs reduction in
developing the product media and product duplication during the quarter ended
June 30, 1998.  The cost of license revenues increased by 5.6% to $319,000, or
0.8% of the related license revenues from $302,000, or 0.9% of related license
revenues in the first six months of June 30, 1998 and 1997, respectively.  The
increase in absolute dollar was primarily attributed to the increases in
volume shipments of the Company's software applications and royalties due on
embedded third-party licenses.  

Service.  Cost of service revenues is primarily comprised of employee-related
costs and fees for third-party consultants incurred in providing consulting,
customer support and training services.  Cost of service revenues increased by
119.8% to $10.9 million, or 58.9% of the related service revenues from $5.0
million, or 54.6% of related service revenues for the quarters ended June 30,
1998 and 1997, respectively.  Cost of service revenues increased by 102.3% to
$18.2 million, or 56.5% of the related service revenues from $9.0 million, or
54.3% of the related service revenues in the first six months of 1998 and
1997, respectively.  The increase in absolute dollars was due primarily to
increases in consulting, support and training personnel and third-party
service providers during these periods.  The increase in cost of service
revenues as a percentage of the related service revenues was primarily due to
the variation in the resources used during the period.  The cost of services
as a percentage of service revenues may vary between periods due to the mix of
services provided by the Company and the resources used to provide these
services. 

Operating Expenses

Sales and Marketing.  Sales and marketing expenses increased by 51.7% to $16.2
million, or 42.9% of total revenues from $10.7 million, or 41.1% of total
revenues for the quarters ended June 30, 1998 and 1997, respectively.  Sales
and marketing expenses increased by 49.1% to $30.3 million, or 41.0% of total
revenues from $20.3 million, or 41.9% of total revenues in the first six
months of 1998 and 1997, respectively.  This increase in absolute dollars was
primarily related to the expansion of the Company's sales force and marketing
activities, increased expenses as a result of the increase in sales related
headcount, and increased marketing activities, including trade show, direct
mail and other promotional expenses.  The Company plans to continue to invest
heavily in expanding its sales and marketing activities.  Accordingly, sales
and marketing expenses are anticipated to increase both in absolute dollars
and as a percentage of revenues over the coming year.

Research and Development.  Research and development expenses increased by
72.7% to $6.2 million, or 16.5% of total revenues from $3.6 million, or 13.9%
of total revenues for the quarters ended June 30, 1998 and 1997, respectively.
 Research and development expenses increased by 76.3% to $12.2 million, or
16.5% of total revenues from $6.9 million, or 14.2% of total revenues in the
first six months of 1998 and 1997, respectively.  Research and development
expenses increased in absolute dollars and as percentage of total revenues
primarily as a result of an increase in personnel and outside contractors to
support the Company's product development activities.  Over the coming years,
the Company plans to continue to invest heavily in research and development. 
As a result, research and development expenses are anticipated to increase in
absolute dollars over the coming year.

Research and development expenses are generally charged to operations as
incurred.  In accordance with Statement of Financial Accounting Standards No.
86, internally-generated costs which were eligible for capitalization for
these periods were insignificant and the Company charged all
internally-generated software development costs to research and development
expense.

General and Administrative.  General and administrative expenses increased by
40.4% to $2.9 million, or 7.6% of total revenues from $2.0 million or 7.8% of
total revenues in the quarters ended June 30,1998 and 1997, respectively. 
General and administrative expenses increased by 56.1% to $5.9 million, or
7.9% of total revenues from $3.8 million, or 7.8% of total revenues in the
first six months of 1998 and 1997, respectively.  General and administrative
expenses increased in absolute dollars during these periods primarily due to
the addition of staff and information system investments to support the growth
of the Company's business during these periods.  The Company expects general
and administrative expenses will increase in absolute dollars over the coming
year.

Acquired in-process research and development. In June 1998, the Company
acquired Wayfarer Communications, Inc. ("Wayfarer"), a privately-held
California corporation that specializes in web-based information delivery by
merging a wholly-owned subsidiary of the Company into Wayfarer (the
"Acquisition").  The Company issued 163,969 shares of its common stock,
received $100,000 in cash, and assumed all outstanding warrants, which were
converted to 2,251 shares of the Company's common stock in exchange for
approximately 89% of Wayfarer shares.  In addition, the Company received
$101,000 in cash as part of the acquisition.   The Company anticipates that it
will record charges associated with acquiring the remaining minority interest
of approximately 11%  upon the completion of the acquisition of the remaining
shares in the quarter ending September 30, 1998.  The Acquisition was recorded
under the purchase method of accounting and the results of operations of
Wayfarer and the fair value of the acquired assets and liabilities were
included in the Company's financial statements beginning on the acquisition
date. A Form 8-K was filed by the Company on July 15, 1998 in connection with
the acquisition.  

In connection with the acquisition, acquired in-process research and
development of approximately $8.2 million associated with the 89% acquired
interest was expensed in the quarter ended June 30, 1998.   The Company
anticipates that an additional in-process research and development charge of
approximately $1.0 million, associated with the acquisition of the remaining
minority interest will be charged in the quarter ending September 30, 1998.  
The Company has also recorded a compensatory expense of $1.3 million
associated with the Acquisition for the quarter ended June 30, 1998.  An
additional compensatory expense of approximately $300,000 is expected to be
charged in each of the quarters ending September 30, 1998 and December 31,
1998.  The remaining intangibles were recorded as goodwill and will be
amortized on a straight-line basis over five years.

        Provision for Income Taxes.  The Company's provision for state,
federal and foreign income taxes was $121,000 and $1.8 million for the
quarters ended June 30, 1998 and 1997, respectively, based upon an estimated
effective tax rate of 37% for both periods. The Company's provision for state,
federal and foreign income taxes was $2.3 million and $3.3 million in the
first six months of 1998 and 1997, respectively, based upon an estimated
effective tax rate of 37% for both periods. 

Business Risks

This report includes a number of forward-looking statements, which reflect the
Company's current views on future events and its operations and financial
performance.  These forward-looking statements are subject to certain risks
and uncertainties, including those discussed below which could cause actual
results to differ materially from historical results or those anticipated. 
Some of the forward-looking statements are generally applicable to emerging
growth companies or to the software industry, others are specific to the
front-office automation market and others are specific to the Company.  In
this report, the words "anticipates," "believes," "expects," "intends,"
"future" and similar expressions identify forward-looking statements.  Readers
are cautioned not to place undue reliance on these forward-looking statements,
which speak only as of the date hereof.

Future Operating Results Uncertain.  The Company has experienced significant
growth and significant fluctuations in growth in revenues in recent periods. 
The Company does not believe that the historical growth rates of revenues will
be sustainable or are indicative of future results.  In addition, the
Company's limited operating history makes the prediction of future operating
results difficult or impossible.  The Company's future operating results will
depend on many things, including demand for the Company's products, the level
of product and price competition, the ability of the Company to develop and
market new products and to control costs, the ability of the Company to expand
its direct sales force and indirect distribution channels and the ability to
attract and retain key personnel.  The Company is currently investing, and
intends to continue to invest, significant resources to develop its sales
strategy, which could adversely affect the Company's operating margins.  
Competition for good salespeople and sales managers is intense and there can
be no assurance that the Company can retain its existing sales personnel or
that it can attract, assimilate and retain additional highly qualified sales
personnel in the future.  The Company's strategy also depends, in part, on
relationships with third parties.  There also can be no assurance that the
Company will attract and retain appropriate high-end integrators, resellers
and other third party distributors to market the Company's products
effectively.  Further, the Company believes, based on interactions with its
customers and potential customers, that the purchase of its products is
relatively discretionary and generally involves a significant commitment of
capital.  As a result, in the event of any downturn in any potential
customer's business or the economy in general, purchases of the Company's
products may be deferred or canceled, which could have a material adverse
effect on the Company's business, results of operations and financial
condition. The Company was not profitable prior to 1995 and there can be no
assurance that the Company will remain profitable on a quarterly or annual
basis. 

Fluctuations in Quarterly Operating Results.  The Company's quarterly
operating results have in the past varied substantially and will probably in
the future vary significantly depending on factors such as the size, timing
and recognition of revenue from significant orders, increased competition,
sales execution, the timing of new product releases by the Company and its
competitors, market acceptance of the Company's products, changes in the
Company's and its competitors' pricing policies, the mix of license and
service revenue, budgeting cycles of its customers, seasonality, the mix of
direct and indirect sales, changes in operating expenses, changes in Company
strategy, personnel changes, foreign currency exchange rates and general
economic factors.  

A significant portion of the Company's revenues in any quarter is typically
derived from non-recurring sales to a limited number of customers. 
Accordingly, revenues in any one quarter are not indicative of revenues in any
future period.  In addition, like many software applications businesses, the
Company has generally recognized a substantial portion of its revenues in the
last month of each quarter, with these revenues concentrated in the last weeks
of the quarter.  Any significant deferral of purchases of the Company's
products, or failure by the Company to close anticipated transactions could
have a material adverse effect on the Company's business, results of
operations and financial condition in any particular quarter and to the extent
that significant sales occur earlier than expected, operating results for
subsequent quarters may be adversely affected.  Product revenues are also
difficult to forecast because the market for front-office automation software
products is rapidly evolving.  The Company's sales cycle is typically six to
nine months but varies substantially from customer to customer.  The Company
expects that sales made through indirect channels, which are harder to predict
and usually have lower margins than direct sales, will increase as a
percentage of total revenues. 

The Company operates with little order backlog because its products are
typically shipped shortly after orders are received.  As a result of these
factors, quarterly revenues for any future quarter are not predictable with
any significant degree of certainty.  The Company's expense levels are based,
in part, on its expectations as to future revenues.  Net income may be
disproportionately affected by a reduction in revenues, because most of the
Company's expenses do not vary with revenues.  The Company may also choose to
reduce prices or increase spending in response to competition or to pursue new
market opportunities.  In particular, if new competitors, technological
advances by existing competitors, or other competitive factors require the
Company to invest significantly greater resources in research and development
efforts, the Company's operating margins in the future may be adversely
affected.  

The foregoing statements regarding the Company's future revenues and net
income are forward-looking statements and actual results may vary
substantially depending upon a variety of factors described in this section
and elsewhere in this report.   

Because of these factors, the Company believes that period-to-period
comparisons of its results of operations are not necessarily meaningful and
that such comparisons should not be relied upon as indications of future
performance. Due to all of the foregoing factors, and as occurred in the
quarter ended June 30, 1998, it is likely that in some future quarter the
Company's operating results will be below the expectations of public market
analysts and investors.  If this happens, the price of the Company's Common
Stock will likely be materially adversely affected.

Rapid Technological Change and Product Development Risks.  The front-office
automation software market is subject to rapid technological change, changing
customer needs, frequent new product introductions and evolving industry
standards that may render existing products and services less marketable or
obsolete.  As a result, the Company's position in its existing markets or
other markets that it may enter could be eroded rapidly by product advances. 
The life cycles of the Company's products are difficult to estimate.  The
Company's growth and future financial performance will depend in part on its
ability to enhance existing applications, develop and introduce new
applications that keep pace with technological advances, meet changing
customer requirements, respond to competitive products and achieve market
acceptance.  These are increasingly complex and costly undertakings.  For
example, the Company's customers have adopted a wide variety of hardware,
software, database, Internet-based and networking platforms and as a result,
to gain broad market acceptance, the Company must continue to support and
maintain its products on a variety of such platforms.  The Company's future
success will depend on its ability to address the increasingly sophisticated
needs of its customers by supporting existing and emerging hardware, software,
database, Internet-based and networking platforms and by developing and
introducing enhancements to its products and new products on a timely basis
that keep pace with technological developments, evolving industry standards
and changing customer requirements.  The Company may not be able to
successfully change other aspects of its business, such as its distribution
channels or cost structure, if technological changes in its market require
such change. 

The Company's product development efforts require substantial investments by
the Company.  There can be no assurance that the Company will have sufficient
resources to make the necessary investments.  The Company has in the past
experienced development delays and there can be no assurance that the Company
will not experience such delays in the future.  There can be no assurance that
the Company will not experience difficulties that could delay or prevent the
successful development, introduction or marketing of new or enhanced products
in the future.  In addition, there can be no assurance that such products will
meet the requirements of the marketplace and achieve market acceptance.  If the
Company is unable, for technological or any other reasons, to develop and
introduce new and enhanced products in a timely manner, the Company's business,
results of operations and financial condition could be materially adversely
affected.

Software products as complex as those offered by the Company may contain errors
that may be detected at any point in the products' life cycles.  The Company
has in the past discovered software errors in certain of its products and has
delayed shipment of products during the period required to correct these
errors.  There can be no assurance that, despite testing by the Company and by
current and potential customers, errors will not be found, resulting in loss
of, or delay in, market acceptance and sales, diversion of development
resources, injury to the Company's reputation, or increased service and
warranty costs, any of which could have a material adverse effect on the
Company's business, results of operations and financial condition.  

Risks Associated with Potential Acquisitions.  As part of its business
strategy, the Company expects to review acquisition prospects that would
complement its existing product offerings, augment its market coverage or
enhance its technological capabilities or that may otherwise offer growth
opportunities.  Future acquisitions by the Company could result in potentially
dilutive issuances of equity securities, the incurrence of debt and contingent
liabilities or amortization expenses related to goodwill and other intangible
assets, any of which could materially adversely affect the Company's operating
results and/or the price of the Company's Common Stock.  Acquisitions entail
numerous risks, including difficulties in the assimilation of acquired
operations, technologies and products, diversion of management's attention to
other business concerns, risks of entering markets which the Company has no or
limited prior experience and potential loss of key employees of acquired
organizations.  No assurance can be given as to the ability of the Company to
successfully integrate any businesses, products, technologies or personnel that
might be acquired in the future, and the failure of the Company to do so could
have a material adverse effect on the business, operating results and financial
condition of the Company. 

        Competition.  The front-office automation software market is intensely
competitive, highly fragmented and subject to rapid change.  Because the
Company offers multiple applications that can be purchased separately or
integrated as part of Vantive Enterprise, the Company competes with a variety
of other businesses depending on the target market for their applications
software products.  These competitors include a select number of businesses
targeting the enterprise-level and department-level front-office markets, such
as Astea International, Inc., Aurum Software, Inc. (a subsidiary of The Baan
Company), Clarify, Inc., Onyx Software, and Siebel Systems, Inc. 

The Company also competes with a substantial number of businesses that offer
products targeted at one or more specific markets, including the customer
support market, the help desk market, the quality assurance market and the
sales and marketing automation market, such as Remedy Corporation and Software
Artistry, Inc. (which was acquired by the IBM subsidiary, Tivoli Systems,
Inc.).  The Company believes that such point solution providers may expand
their product offerings, which could provide increased competition for the
company across its market segments.  The Company also competes with third party
professional service organizations that develop custom software and with
internal information technology departments of customers that develop customer
interaction applications.  Among the Company's current and potential
competitors are also a number of large hardware and software businesses that
may develop or acquire products that compete with the Company's products. In
this regard, SAP AG, Oracle Corporation and The Baan Company have each
introduced sales automation and/or customer support modules as part of their
application suites.  Oracle has announced the creation of a network of third
party dealers that will sell Oracle's application suites exclusively to
medium-sized businesses.  

The Company expects that large software vendors in the enterprise resource
planning market will continue to enter and pursue the front-office automation
market.  These competitors have significantly greater financial, marketing,
service, support, technical and other resources than the Company.

The Company also expects that competition will increase as a result of software
industry consolidations. Current and potential competitors have established or
may establish cooperative relationships among themselves or with third parties
to increase the ability of their products to address the needs of the Company's
prospective customers.  Accordingly, it is possible that new competitors or
alliances among competitors may emerge and rapidly acquire significant market
share.  The Company also expects that competition may increase as a result of
both new software start ups entering the market as well as existing software
industry vendors which may be planning to enter the market for front-office
applications.  Increased competition is likely to result in price reductions,
reduced operating margins and loss of market share, any of which could
materially adversely affect the Company's business, results of operations and
financial condition.  Many of the Company's current and potential competitors
have significantly greater financial, marketing, service, support, technical
and other resources than the Company.  As a result, they may be able to respond
more quickly to new or emerging technologies and changes in customer
requirements, or to devote greater resources to the development, promotion,
service and sale of their products than can the Company.  There can be no
assurance that the Company will be able to compete successfully against current
and future competitors or that competitive pressures faced by the Company will
not materially adversely affect its business, results of operations and
financial condition.

The Company believes that the principal competitive factors affecting its
market include product features such as adaptability, scalability, ability to
integrate with products produced by other vendors, functionality, ease of use
and such other factors as product reputation, quality, performance, price,
customer service and support, the effectiveness of sales and marketing efforts
and company reputation.  Although the Company believes that its products
currently compete favorably with respect to such factors, there can be no
assurance that the Company can maintain its competitive position against
current and potential competitors, especially those with significantly greater
financial, marketing, service, support, technical and other resources.

Dependence on Emerging Markets for Front-Office Automation Software; Product
Concentration.  The Company's future financial performance will depend in large
part on the growth in demand for individual front-office automation
applications as well as the number of organizations adopting comprehensive
front-office automation software information systems.  To date, much of the
Company's license revenues have resulted from sales of individual applications,
particularly Vantive Support, Vantive HelpDesk, and Vantive Sales.  The markets
for these applications are relatively new and undeveloped and failure of these
markets to expand would have a material adverse effect on the Company's
business, results of operations and financial condition.  Additionally, the
Company is investing in the field service and quality automation markets. 
Should these markets fail to develop, not accept the Company's products or
cause the company to lose new business and/or customers in its traditional
markets, there would be an adverse effect on the Company's business, results of
operations and financial condition.

The Company believes that an important competitive advantage for its software
applications is their ability to be integrated with one another and with other
back-office software applications to create an enterprise-wide information
system.  If the demand for integrated suites of front-office automation
applications fails to develop, or develops more slowly than the Company
currently anticipates, it could have a material adverse effect on the demand
for the Company's applications and on its business, results of operations and
financial condition.  In addition, any other factor adversely affecting the
demand for the Company's existing applications could have a material adverse
effect on the Company's business, results of operations and financial condition.

Management of Expanding Operations; Dependence Upon Key Personnel.  The
Company's ability to compete effectively and to manage future growth, if any,
will require the Company to continue to improve its financial and management
controls, reporting systems and procedures on a timely basis and expand, train
and manage its workforce. There can be no assurance that the Company will be
able to do so.  The Company's failure to do so could have a material adverse
effect on the Company's business, results of operations and financial
condition.  The Company has recently hired a significant number of employees,
including senior sales and marketing personnel and in order to maintain its
ability to grow in the future, the Company will be required to significantly
increase its total headcount.  In addition, the Company's future performance
depends in significant part upon attracting and retaining key technical, sales,
senior management and financial personnel.  In particular, delays in hiring
sales or research and development personnel may have a material adverse effect
on the Company's business, results of operations and financial condition.  The
loss of the services of one or more of the Company's officers or the inability
to recruit other additional senior management could have a material adverse
effect on the Company's business, results of operations and financial
condition.  Competition for such personnel is intense and the inability to
retain its key technical, sales, senior management and financial personnel or
to attract, assimilate or retain other highly qualified technical, sales,
senior management and financial personnel in the future on a timely basis could
have a material adverse effect on the Company's business, results of operations
and financial condition.  

International Operations, Foreign Currency Fluctuations.  International
revenue, or revenue derived from sales to customers in foreign countries,
accounted for approximately 28% and 15% of the Company's revenue in the quarter
ended June 30, 1998 and 1997, and 28% and 13% of the Company's revenue in the
six months ended June 30, 1998 and 1997, respectively.  International revenues
increased by 177% for the quarter ended June 30, 1998 compared to quarter ended
June 30, 1997 and by 214% for the six months ended June 30, 1998 compared to
six months ended June 30, 1997 demonstrating the increased acceptance of
Vantive's front office automation products internationally.  The majority of
this international revenue has come from Europe.  The Company believes that its
continued growth and profitability will require further expansion of its
international operations.  To successfully expand international sales, the
Company must establish additional foreign operations, hire additional personnel
and recruit additional international resellers.  To the extent that the Company
is unable to do so in a timely manner, the Company's growth in international
sales, if any, will be limited and the Company's business, results of
operations and financial condition could be materially adversely affected. 

As the Company continues to expand its international operations, significant
costs may be incurred before achieving any additional international revenues,
which could have a material adverse effect on the Company's business, results
of operations and financial condition.  In addition, future increases in the
value of the U.S. dollar could make the Company's products less competitive in
foreign markets.  There are certain risks inherent in doing business on an
international level, such as unexpected changes in regulatory requirements,
export restrictions, tariffs and other trade barriers, difficulties in staffing
and managing foreign operations, longer payment cycles, problems in collecting
accounts receivable, political instability, changes in foreign economic
conditions, fluctuations in currency exchange rates, seasonal reductions in
business activity during the summer months in Europe and certain other parts of
the world and potentially adverse tax consequences, any of which could
adversely impact the success of the combined company's international
operations.  The Company's foreign subsidiaries operate primarily in local
currencies, and their results are translated into US dollars.  If the value of
the US dollar increases relative to foreign currencies, the Company's operating
results could be materially adversely affected.  In particular, revenue from
sales in the Pacific Rim could be adversely affected by declines in the value
of such currencies against the dollar.

The Company has not been significantly affected by the recent unfavorable
economic conditions in certain Asian and Pacific Rim countries.  If the
economic conditions in these markets do not improve, this may have an adverse
impact on the Company's business, results of operations, and financial
condition.

Increased Use of Third Party Software.  The Company currently markets a
proprietary application development environment for its customers to tailor its
products.  This application development environment is also used by the Company
to build and modify its products.  The Company believes, based on interactions
with its customers and potential customers, that it currently derives a
competitive advantage from this proprietary application development
environment.  However, the Company believes that competitive pressures,
technological changes demanded by customers and significant advances in the
sophistication of third party application development tools such as Visual
Basic will require the Company to make greater use of third party software in
the future.  The greater use of third party software could require the Company
to invest significant resources in rewriting some or all of its software
applications products utilizing third party software and/or to enter into
license arrangements with third parties which could result in higher royalty
payments and a loss of product differentiation and any competitive advantage
associated with the proprietary development environment.  There can be no
assurance that the Company would be able to successfully rewrite its
applications or enter into commercially reasonable licenses and the costs of,
or inability or delays in doing so could have a material adverse effect on the
Company's business, results of operations and financial condition.  

Leverage; Subordination. In connection with the August 1997 sale of its 4.75%
Convertible Subordinated Notes (the "Notes"), the Company has incurred $69
million of indebtedness.  As a result of this additional indebtedness, the
Company's principal and interest obligations have increased substantially.  The
degree to which the Company is leveraged could materially and adversely affect
the Company's ability to obtain financing for working capital, acquisitions or
other purposes and could make it more vulnerable to industry downturns and
competitive pressures.  The Company's ability to meet its debt service
obligations is dependent upon the Company's future performance, which will be
subject to financial, business and other factors affecting the operations of
the Company, many of which are beyond its control.

Need to Expand Distribution Channels and Successfully Leverage Third Party
Relationships.  An important element of the Company's distribution strategy is
to expand its direct sales force, to create additional relationships with third
parties and to dedicate certain direct sales resources and leverage third party
relationships to cover key vertical markets.  An important element of the
Company's strategy is to integrate its products with products from enterprise
resource planning ("ERP") vendors.  The Company is currently investing and
intends to continue to invest, significant resources toward these strategies,
which could adversely affect the Company's operating margins.  In this regard,
the Company has recently hired significant numbers of direct salespeople. 
Competition for salespeople is intense and there can be no assurance that the
Company can retain its existing salespeople or that it can attract, assimilate
and retain additional highly qualified salespeople in the future.  The
Company's distribution strategy also depends, in large part, on attracting and
retaining beneficial third party relationships.  There also can be no assurance
that the Company will be able to attract and retain appropriate high- end
integrators, resellers, other third party distributors or ERP vendors.  The
Company's agreements with these third parties are not exclusive and, in many
cases, may be terminated by either party without cause.  In addition, many of
these third parties sell or co-market competing product lines. Therefore, there
can be no assurance that any of these parties will continue to represent or
recommend the Company's products.  There also can be no assurance that the
Company will effectively identify key vertical markets.  The inability to
recruit, or the loss of, important direct sales personnel, high-end
integrators, resellers, other third party distributors or ERP vendors, or the
failure to effectively identify key vertical markets, could have a material
adverse effect on the Company's business, results of operations and financial
condition.

        Anti-Takeover Effects of Restated Certificate of Incorporation, Bylaws
and Delaware Law. Certain provisions of the Company's Restated Certificate of
Incorporation and Bylaws and of Delaware law could discourage potential
acquisition proposals and could delay or prevent a change in control of the
Company.  Such provisions could diminish the opportunities for a stockholder to
participate in tender offers, including tender offers at a price above the then
current market value of the Common Stock.  Such provisions may also inhibit
increase in the market price of the Common Stock that could result from
takeover attempts.  In addition, the Restated Certificate of Incorporation
authorizes 2,000,000 shares of undesignated preferred stock.  The Board of
Directors of the Company, without further stockholder approval, may issue this
preferred stock with such terms as the Board of Directors may determine, which
could have the effect of delaying or preventing a change in control of the
Company.  The issuance of preferred stock could also adversely affect the
voting power of the holders of Common Stock, including the loss of voting
control.  Such preferred stock could be utilized to implement, without
stockholder approval, a stockholders' right plan that could be triggered by
certain change in control transactions, which could delay or prevent a change
in control of the Company or could impede a merger, consolidation, takeover or
other business Combination involving the Company, or discourage a potential
acquiror from making a tender offer or otherwise attempting to obtain control
of the Company.  The Company's Bylaws and indemnity agreements provide that the
Company will indemnify officers and directors against losses that they may
incur in legal proceedings resulting from their service to the Company.  In
addition, the Restated Certificate of Incorporation and Bylaws eliminate the
right of stockholders to take action by written consent.  Moreover, Section 203
of the Delaware General Corporation Law restricts certain business combinations
with "interested stockholders" as defined by that statute.  The provisions of
the Restated Certificate of Incorporation and Bylaws and of Delaware law are
intended to encourage potential acquirers to negotiate with the Company and
allow the Board of Directors the opportunity to consider alternative proposals
in the interest of maximizing stockholder value.  However, such provisions may
also have the effect of discouraging acquisition proposals or delaying or
preventing a change in control of the Company, which in turn may have an
adverse effect on the market price of the Company's Common Stock.

Possible Volatility of Stock Price.  Future announcements concerning the
Company or its competitors, quarterly variations in operating results,
announcements of technological innovations, the introduction of new products or
changes in product pricing policies by the Company or its competitors,
proprietary rights or other litigation, changes in earnings estimates by
analysts or other factors could cause the market price of the Common Stock to
fluctuate substantially.  In addition, stock prices for many technology
companies fluctuate widely for reasons which may be unrelated to operating
results of such companies.  These fluctuations, as well as general economic,
market and political conditions such as changes in interest rates, recessions
or military conflicts, may materially and adversely affect the market price of
the Company's 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 instituted against such companies.  Such litigation could result
in substantial costs and a diversion of management's attention and resources,
which could have a material adverse effect on the Company's business, results
of operations and financial condition.

Dependence on Licensed Technology.  Vantive licenses technology on a
non-exclusive basis from several businesses for use with its products and
anticipates that it will continue to do so in the future.  The inability of the
Company to continue to license these products or to license other products for
use with its products or substantial increases in royalty payments under these
third party licenses could have a material adverse effect on its business,
results of operations and financial condition.  In addition, the effective
implementation of the Company's products depends upon the successful operation
of these licensed products in conjunction with the Company's products and
therefore any undetected errors in such licensed products may prevent the
implementation or impair the functionality of the Company's products, delay new
product introductions and/or injure the Company's reputation.  Such problems
could have a material adverse effect on the Company's business, results of
operations and financial condition.

Dependence on Proprietary Technology; Risks of Infringement.  The Company's
success is heavily dependent upon proprietary technology.  The Company relies
primarily on a combination of copyright, trademark and trade secrets laws, as
well as confidentiality procedures and contractual provisions to protect its
proprietary rights.  There can be no assurance that such measures will be
adequate to protect the Company from infringement of its technology.  The
Company presently has no patents or patent applications pending.  Despite the
Company's efforts to protect its proprietary rights, attempts may be made to
copy aspects of the Company's products or to obtain and use information that
the Company regards as proprietary.  In particular, as the Company provides its
licensees with access to the proprietary information underlying the Company's
licensed applications, there can be no assurance that licensees or others will
not develop products which infringe the Company's proprietary rights.  

Policing unauthorized use of the Company's products is difficult and while the
Company is unable to determine the extent to which piracy of its software
products exists, software piracy can be expected to be a persistent problem. 
In addition, the laws of some foreign countries do not protect the Company's
proprietary rights to as great an extent as do the laws of the United States. 
There can be no assurance that the Company's means of protecting its
proprietary rights will be adequate or that the Company's competitors will not
independently develop similar technology.  The Company is not aware that any of
its products infringe the proprietary rights of third parties, although the
Company has in the past and may in the future, receive communications alleging
possible infringement of third party intellectual property rights. The Company
expects that software product developers will increasingly be subject to
infringement claims as the number of products and competitors in the Company's
target markets grows and the functionality of products in such markets
overlaps.  Any such claims, with or without merit, could be time-consuming,
result in costly litigation, cause product shipment delays or require the
Company to enter into royalty or licensing agreements.  Such royalty or
licensing agreements, if required, may not be available on terms acceptable to
the Company or at all, which could have a material adverse effect upon the
Company's business, results of operations and financial condition.  

Product Liability.  The Company's license agreements with its customers
typically contain provisions intended to limit the Company's exposure to
potential product liability claims.  It is possible that the limitation of
liability provisions contained in the Company's agreements may not be
effective.  Although the Company has not experienced any product liability
claims to date, the sale and support of products by the Company and the
incorporation of products from other businesses may entail the risk of such
claims.  A successful product liability action brought against the Company
could have a material adverse effect upon the Company's business, results of
operations and financial condition.

Year 2000 Compliance.  Many currently installed computer systems and software
products are coded to accept only two digit entries in the date code field. 
These date code fields will need to accept four digit entries to distinguish
21st century dates from the 20th century dates.  As a result many companies'
software and computer systems may need to be upgraded or replaced in order to
comply with such "Year 2000" requirements.  Although the Company believes that
its systems are Year 2000 compliant, the Company utilizes third-party equipment
and software that may not be Year 2000 compliant.  Failure of such third-party
equipment or software to operate properly with regard to Year 2000 and
thereafter could require the Company to incur unanticipated expenses to address
any problems, which could have a material adverse effect on the Company's
business, operating results and financial condition.  The business, operating
results and financial condition of the Company's customers could be adversely
affected to the extent that they utilize third- party software products which
are not Year 2000 compliant.  Furthermore, the purchasing patterns of customers
or potential customers may be affected by Year 2000 issues as companies expend
significant resources to correct their current systems for Year 2000
compliance.  These expenditures may result in reduced funds available to
purchase products and services such as those offered by the Company, which
could have a material adverse effect on the Company's business, operating
results and financial condition.  The Vantive Enterprise has been designed to
support dates well into the next century and to be Year 2000 compliant. 
Failure of the software to operate properly with regard to Year 2000 and
thereafter could require the Company to incur unanticipated expenses to address
any problems, which could have a material adverse effect on the Company's
business, operating results and financial condition. 

Financial Condition

Total assets as of June 30, 1998 increased by 9.9%, or $16.0 million from
December 31, 1997.  The combined balance of cash and short-term investments
decreased by $133,000 primarily due to operating activities.  Net property and
equipment increased $5.7 million primarily due to equipment purchases
associated with supporting the growth of the Company's business during this
period.

Total current liabilities as of June 30, 1998 increased by 30.3%, or $11.4
million from December 31, 1997.  The increase was primarily due to increases in
accounts payable of $6.2 million and deferred revenues of $6.7 million,
partially offset by a decrease in accrued liabilities of $1.4 million.  The
increase in accounts payable is primarily due to increased business activities
and the increase in deferred revenues is primarily due to deferrals associated
with higher volume of revenues related to post-contract support.  


Liquidity and Capital Resources

Operating activities provided cash of $3.6 million in the six months ended June
30, 1998.  The primary source of these funds was an increase in deferred
revenues and long-term liabilities, partially offset by increases in accounts
receivable, prepaid expenses and other assets.  Operating activities provided
cash of $4.1 million in the six months ended June 30, 1997.  The primary source
of these funds was net income and an increase in accounts payable and accrued
liabilities, partially offset by an increase in accounts receivable and other
assets.  

Investing activities used cash of $59.2 million and $7.2 million in the six
months ended June 30, 1998 and 1997, respectively, primarily for the purchase
of short-term, interest-bearing, investment-grade securities and for the
purchase of capital equipment.  The Company does not currently have any
material commitments for capital equipment acquisitions.

Financing activities provided cash of $3.9 million in the six months ended June
30, 1998.  The primary source of these funds was proceeds from the issuance of
common stock pursuant to the exercise of outstanding stock options, partially
offset by payments on capital lease obligations.  Financing activities provided
cash of $401,000, in the six months ended June 30, 1997.  The primary source of
these funds was proceeds from the issuance of common stock pursuant to the
exercise of outstanding stock options, partially offset by payments on capital
lease obligations.  

        On August 21, 1997, the Company sold an aggregate of $69.0 million in
principal amount of convertible subordinated notes, due August 2002, to certain
investors and incurred approximately $2.4 million of offering expenses in
connection with this issuance.  These notes have a 4.75% coupon over a
five-year term and are convertible into the Company's common stock at the
investor's option, if and when the share price exceeds $41.93 per share.  The
Company has used the proceeds primarily for operating activities and equipment
purchases.   

At June 30, 1998, the Company's principal sources of liquidity were its cash,
cash equivalents and short-term investments of $101.3 million.  The Company
believes that existing cash and short-term investment balances and potential
cash flow from operations will be sufficient to meet its cash requirements for
the next twelve months.  While operating activities may provide cash in certain
periods to the extent the Company experiences growth in the future, operating
and investing activities may use cash and consequently, such growth may require
the Company to obtain additional sources of financing.


Part II:        Other Information

Item 1: Legal Proceedings:

                Not Applicable.

Item 2: Changes in Securities:

                Not Applicable.


Item 3: Defaults upon Senior Securities:

                Not Applicable.

Item 4: Submission of Matters to a Vote of Security Holders:

                The Company's Annual Meeting of Stockholders was held
on May 5, 1998.  Proxies for the meeting were solicited pursuant to
Regulation 14A.  At the meeting, management's nominees for directors
were elected.  A summary of the nominees and voting results is as
follows:
<TABLE>
<CAPTION>
<S>                                       Shares        Shares
Nominee                                  Voting For    Withheld
------------------------------           -----------  ----------
<S>                                      <C>         <C>
John R. Luongo                            21,046,360     31,250
Aneel Bhusri                              20,929,915    147,695
William Davidow                           21,046,460     31,150
Kevin Hall                                21,046,460     31,150
Raymond Ocampo                            21,044,960     32,650
Peter Roshko                              21,046,260     31,350
</TABLE>

Item 5:Other Information:  

        Not Applicable.

Item 6:Exhibits and Reports on Form 8-K:

A.      Exhibits

        *       3.1     Form of Agreement and Plan of Merger between The 
                        Vantive Corporation, a California corporation, 
                        and The Vantive Corporation, a Delaware 
                        corporation.
        *       3.2     Bylaws.
        =       4.1     Declaration of Registration Rights made on 
                        August 31, 1997 by the Company for the benefit 
                        of the holders of Common Stock of Innovative 
                        Computer Concepts, Inc.
        *       10.1    Form of Indemnity Agreement for officers and 
                        directors.
        *       10.2    1991 Stock Option Plan, as amended.
        *       10.3    1995 Outside Directors Stock Option Plan.
        *       10.4    1995 Employee Stock Purchase Plan.
        *       10.5    Offer Letter dated May 21, 1993 between the 
                        Company and John R. Luongo.
        *       10.6    Offer Letter dated April 6, 1995 between the 
                        Company and John M.  Jack.
        *+      10.7    Value Added Reseller License Agreement dated 
                        October 5, 1993 by and between Inference 
                        Corporation and the Company.
        *+      10.8    Basicscript License Agreement dated October 4, 
                        1994 by and between Henneberry Hill Technologies 
                        Corporation doing business as Summit Software 
                        Company and the Company.
        *+      10.9    International VAR Agreement dated March 26, 1992 
                        between Oracle Corporation and the Company, as 
                        amended.
                10.9.1  International VAR Agreement dated June 28, 
                        1996 between Oracle Corporation and the Company, 
                        as amended.
        *+      10.10   Value Added Remarketer Agreement dated 
                        December 20, 1991 between Sybase, Inc. and the 
                        Company, as amended.
        *+      10.11   Application Bridge API VAR License Agreement 
                        dated January 22, 1993 between the Company and 
                        Prospect Software, Inc.
        *+      10.12   Compensation Letter dated May 10, 1995 between 
                        the Company and John R. Luongo.
               '10.13   Lease Agreement dated January 13, 1995 between 
                        John Arrillaga, Trustee, or his Successor 
                        Trustee, UTA dated July 20, 1977 (John Arrillaga 
                        Separate Property Trust) as amended, and 
                        Richard T. Peery, Trustee, or his Successor 
                        Trustee, UTA dated July 20, 1977 (Richard T. 
                        Peery   Separate Property Trust) as amended, 
                        and the Company.
        #       10.14   Lease Agreement dated September 4, 1996 between 
                        John Arrillaga, Trustee, or his Successor 
                        Trustee, UTA dated July 20, 1977 (Arrillaga 
                        Family Trust) as amended, and Richard T. Peery, 
                        Trustee, or his Successor Trustee, UTA dated 
                        July 20, 1977 (Richard T. Peery Separate 
                        Property Trust) as amended, and the Company.
        **      10.15   Agreement and Plan of Merger dated August 13, 
                        1997 by and among The Vantive Corporation, Igloo 
                        Acquisition Corporation and Innovative Computer 
                        Concepts, Inc. as amended.  
                10.16   Lease Agreement dated June 22, 1998 between 
                        Augustine Partners, LLC and the Company.
                10.17   Offer Letter dated July 31, 1998 between the 
                        Company and Leonard Le Blanc.

                27.1    Financial Summary Table

*       Previously filed in the Company's Registration Statement 
(No.  33-94244), declared effective on August 14, 1995.
+       Confidential Treatment has been granted for portions of 
this exhibit.
#       Previously filed in the Report on Form 10-K filed on 
March 31, 1997.   
**      Previously filed in the Company's Report on Form 8-K 
filed on September 26, 1997 and on Form 8-K/A filed on 
November 4, 1997.
=       Incorporated by reference from the Company's Registration 
Statement (No. 333-36547), declared effective on November 
4, 1997.

                                   SIGNATURES

     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.

                                          THE VANTIVE CORPORATION

Dated: August 14, 1998

                                          By:      /s/ MICHAEL M. LOO
                                            ------------------------------------
                                                       Michael M. Loo
                                                  Vice President, Finance
                                               (Principal Accounting Officer)