##### 



UNITED STATES 
    SECURITIES AND EXCHANGE COMMISSIONWashington, D.C.
    20549
  FORM 10-Q
  (Mark One)þ

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934FOR THE QUARTERLY PERIOD ENDED
    NOVEMBER 30, 2007ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934FOR THE TRANSITION PERIOD
    FROM          TO    Commission File Number:
    000-51748
  AVANADE INC.
 (Exact name of registrant as
    specified in its charter)
   Washington

91-2032865(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer Identification
    No.)   2211 Elliott Avenue, Suite 200
 Seattle, Washington 98121
 (Address of principal executive
    offices)
  (206) 239-5600
 (Registrants telephone
    number, including area code)
   þ o
  Rule 12b-2
 o o þ
  Rule 12b-2 o þ




---



##### 



AVANADE
    INC.
  INDEX
  
  PagePart I.


Financial Information


3Item 1.


Financial Statements


3Consolidated Balance Sheets as of
    November 30, 2007 (Unaudited) and August 31, 2007


3Consolidated Income Statements (Unaudited) for
    the three months ended November 30, 2007 and
    December 31, 2006


4Consolidated Shareholders Equity and
    Comprehensive Income Statements (Unaudited) for the three months
    ended November 30, 2007


5Consolidated Cash Flows Statements (Unaudited)
    for the three months ended November 30, 2007 and
    December 31, 2006


6Notes to Consolidated Financial Statements
    (Unaudited)


7Item 2.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


15Item 3.


Quantitative and Qualitative Disclosures About
    Market Risk


25Item 4T.


Controls and Procedures


25Part II.


Other Information


26Item 1.


Legal Proceedings


26Item 1A.


Risk Factors


26Item 2.


Unregistered Sales of Equity Securities and Use
    of Proceeds


26Item 3.


Defaults upon Senior Securities


27Item 4.


Submission of Matters to a Vote of Security
    Holders


27Item 5.


Other Information


27Item 6.


Exhibits


27Signatures


28  2




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##### 



PART I 
    FINANCIAL INFORMATION
  ITEM 1.  FINANCIAL
    STATEMENTS
  AVANADE
    INC.
    CONSOLIDATED BALANCE SHEETS
    November 30, 2007 and August 31, 2007
    (In thousands of U.S. dollars, except share and per share
    amounts)
  November 30,


August 31,2007


2007(Unaudited)ASSETSCURRENT ASSETS:Cash and cash equivalents

$
174,127


$
140,345Receivables from clients, net of allowances of $518 and $365,
    respectively


41,296



28,604Due from related parties


84,111



62,094Unbilled services to clients


23,985



19,874Unbilled services to related parties


12,481



41,551Deferred income taxes, net


23,280



24,529Other current assets


6,361



5,218Total current assets


365,641



322,215NON-CURRENT ASSETS:Property and equipment, net of accumulated depreciation of
    $44,783 and $40,707, respectively


10,218



10,675Goodwill


12,052



10,196Other intangible assets, net of accumulated amortization of
    $5,027 and $4,960, respectively


3,874



571Deferred income taxes, net


30,612



32,528Other non-current assets


5,920



4,902Total non-current assets


62,676



58,872TOTAL ASSETS

$
428,317


$
381,087LIABILITIES AND SHAREHOLDERS EQUITYCURRENT LIABILITIES:Due to related parties

$
17,849


$
7,405Accounts payable


23,107



18,148Deferred revenues


5,330



3,771Accrued payroll and related benefits


68,868



59,500Accrued expenses


18,801



17,166Income taxes payable


3,499



13,209Other current liabilities


3,418



7,878Total current liabilities


140,872



127,077NON-CURRENT LIABILITIESIncome taxes payable


12,753



Other non-current liabilities


8,323



5,726Total non-current liabilities


21,076



5,726COMMITMENTS AND CONTINGENCIESREDEEMABLE COMMON STOCK AND EMPLOYEE STOCK OPTIONS


178,268



165,335SHAREHOLDERS EQUITY:Convertible Series A preferred stock, par value of $0.0001
    per share (aggregate liquidation preference of $587,329 as of
    November 30, 2007 and August 31, 2007, respectively),
    105,000,000 shares authorized,74,750,903 shares issued
    and outstanding as of November 30, 2007 and August 31,
    2007, respectively


7



7Common stock, par value $0.0001 per share,
    150,000,000 shares authorized, 5,194,102 and
    4,726,363 shares issued and outstanding as of
    November 30, 2007 and August 31, 2007, respectively






Additional
    paid-in-capital


113,089



125,018Accumulated deficit


(28,167
)


(41,835
)Accumulated other comprehensive income (loss)


3,172



(241
)Total shareholders equity


88,101



82,949TOTAL LIABILITIES AND SHAREHOLDERS EQUITY

$
428,317


$
381,087    3




---



##### 



AVANADE
    INC.
    CONSOLIDATED INCOME STATEMENTS
    For the Three Months Ended November 30, 2007 and
    December 31, 2006
    (In thousands of U.S. dollars)
    (Unaudited)
  Three Months EndedNovember 30,


December 31,2007


2006REVENUES:Revenues before reimbursements:Related parties

$
150,629


$
101,998Other


48,695



35,970199,324



137,968Reimbursements:Related parties


5,785



5,391Other


4,892



4,19010,677



9,581Revenues


210,001



147,549OPERATING EXPENSES:Cost of services:Cost of services before reimbursable expenses


132,945



90,324Reimbursable expenses


10,677



9,581Cost of services


143,622



99,905Selling, general and administrative costs


43,773



33,684Total operating expenses


187,395



133,589OPERATING INCOME


22,606



13,960Interest income


1,236



721Interest expense


(8
)


(8
)Other income


252



137INCOME BEFORE INCOME TAXES


24,086



14,810Provision (benefit) for income taxes


9,594



(41,369
)NET INCOME

$
14,492


$
56,179    4




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##### 



AVANADE
    INC.
    CONSOLIDATED SHAREHOLDERS EQUITY AND COMPREHENSIVE INCOME
    STATEMENTS
    For the Three Months Ended November 30, 2007
    (In thousands of U.S. dollars, except share amounts)
    (Unaudited)
  ConvertibleSeries A








Additional





Accumulated Other


TotalPreferred Stock


Common Stock


Paid-In


Accumulated


Comprehensive


ShareholdersAmount


No. Shares


Amount


No. Shares


Capital


Deficit


Income (Loss)


EquityBalance as of August 31, 2007

$
7



74,750,903


$




4,726,363


$
125,018


$
(41,835
)

$
(241
)

$
82,949Adoption of EITF Issue
    06-2






















(1,035
)






(1,035
)Adoption of FASB Interpretation No. 48






















211







211Comprehensive income:Net income






















14,492







14,492Foreign currency translation adjustments


























3,413



3,413Comprehensive income






























17,905Income tax benefit on share-based compensation plans


















99











99Change in redeemable common stock and employee stock options


















(12,933
)










(12,933
)Share-based compensation expense


















335











335Issuances of common stock related to employee share programs














554,314



1,439











1,439Purchases of common stock














(86,575
)


(869
)










(869
)Balance as of November 30, 2007

$
7



74,750,903


$




5,194,102


$
113,089


$
(28,167
)

$
3,172


$
88,101    5




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##### 



AVANADE
    INC.
    CONSOLIDATED CASH FLOWS STATEMENTS
    For the Three Months Ended November 30, 2007 and
    December 31, 2006
    (In thousands of U.S. dollars)
    (Unaudited)
  Three Months EndedNovember 30,


December 31,2007


2006CASH FLOWS FROM OPERATING ACTIVITIES:Net income

$
14,492


$
56,179Adjustments to reconcile Net income to Net cash provided by
    (used in) operating activities Depreciation and amortization


3,199



1,680Unrealized foreign currency gain on intercompany notes


(2,473
)


(4,929
)Loss on disposal of property and equipment, net


1



19Deferred income tax expense (benefit)


4,080



(44,284
)Share-based compensation expense


335



753Change in assets and liabilities Receivables from clients, net


(10,010
)


(6,516
)Due from related parties


(19,274
)


(4,995
)Unbilled services to clients


(3,052
)


6,066Unbilled services to related parties


29,398



(2,781
)Other current assets


(818
)


1,977Due to related parties


10,179



401Accounts payable


2,820



(1,197
)Deferred revenues


1,189



1,398Accrued payroll and related benefits


4,965



(4,149
)Accrued expenses


247



850Income taxes payable


3,332



(386
)Other liabilities


(3,028
)


2,445Net cash provided by operating activities


35,582



2,531CASH FLOWS FROM INVESTING ACTIVITIES:Proceeds from sales of property and equipment


3



Purchases of property and equipment


(2,230
)


(917
)Purchase of business, net of cash acquired


(4,223
)


Deferred technology infrastructure costs


(1,202
)


Other, net


396



(2
)Net cash used in investing activities


(7,256
)


(919
)CASH FLOWS FROM FINANCING ACTIVITIES:Purchases of common shares


(684
)


(8,423
)Proceeds from exercise of stock options


1,254



1,590Repayments of employee notes receivable






1Excess tax benefits from share-based payment arrangements


79



61Net cash provided by (used in) financing activities


649



(6,771
)Effect of exchange rate changes on cash and cash equivalents


4,807



1,109NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS


33,782



(4,050
)CASH AND CASH EQUIVALENTS,beginning of period


140,345



72,898CASH AND CASH EQUIVALENTS,end of period

$
174,127


$
68,848    6




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##### 



AVANADE,
    INC.
  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (In thousands of U.S. dollars, except share amounts or as
    otherwise disclosed)
 (Unaudited)
  1.
    BASIS OF
    PRESENTATION  Form 10-Q 11-months Form 10-K Form 10-K).
  Change in
    Fiscal Year
    Reclassification
    of prior-period amounts
    Three Months EndedDecember 31, 2006As Reported inAdjusted


Fiscal 2007Cost of services before reimbursable expenses

$
90,324


$
95,379Selling, general and administrative costs


33,684



28,629  7




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##### 



AVANADE,
    INC.
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In thousands of U.S. dollars, except share amounts or as
    otherwise disclosed)
 (Unaudited)
    Three Months EndedDecember 31, 2006As Reported inAdjusted


Fiscal 2007Operating income (loss):Americas

$
12,075


$
12,342Europe


7,251



7,636Asia Pacific


504



588Corporate and eliminations


(5,870
)


(6,606
)Total

$
13,960


$
13,960   Recently
    Adopted Accounting Pronouncements
  Accounting for Uncertainty in
    Income Taxes  an interpretation of FASB Statement
    No. 109
         8




---



##### 



AVANADE,
    INC.
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In thousands of U.S. dollars, except share amounts or as
    otherwise disclosed)
 (Unaudited)
  No. 06-2, Accounting for Sabbatical Leave and Other Similar Benefits
    Pursuant to FASB Statement No. 43 (EITF 06-2). EITF 06-2 EITF 06-2 EITF 06-2
  New
    Accounting Pronouncements
  Business Combinations Business Combinations
  Fair Value Measurements
  2.
    ACCUMULATED
    OTHER COMPREHENSIVE INCOME (LOSS)      Three Months EndedNovember 30,


December 31,2007


2006Three months ended

$
17,905


$
53,769   3.
    MATERIAL
    TRANSACTIONS AFFECTING SHAREHOLDERS EQUITY   9




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##### 



AVANADE,
    INC.
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In thousands of U.S. dollars, except share amounts or as
    otherwise disclosed)
 (Unaudited)
    30-day
      November 30,


August 31,2007


2007Vested common stock subject to put rights

$
58,484


$
49,956Intrinsic value of stock options


119,784



115,379$
178,268


$
165,335     Shares


AmountOther purchases(1)(2)


86,575


$
869Less:Non-cash amounts related to stock-swaps(2)






185Net cash out-lay





$
684     (1)
    
    During the three months ended
    November 30, 2007, as authorized under its option plans,
    the Company acquired 68,759 shares of its common stock via
    share withholdings for payroll tax obligations due from
    employees in connection with the delivery of the Companys
    common shares under the option plans.(2)
    
    During the three months ended
    November 30, 2007, as authorized under its option plans,
    the Company acquired 17,816 shares of its common stock as a
    result of shares surrendered to the Company to pay the exercise
    price in connection with so-called stock-swap
    exercises of employee stock options. 10




---



##### 



AVANADE,
    INC.
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In thousands of U.S. dollars, except share amounts or as
    otherwise disclosed)
 (Unaudited)
   Form 10-K 11-months
  4.
    COMMITMENTS
    AND CONTINGENCIES  Guarantees
  and/or
  Legal
    Contingencies
    5.
    RELATED
    PARTY BALANCES AND TRANSACTIONS   11




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##### 



AVANADE,
    INC.
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In thousands of U.S. dollars, except share amounts or as
    otherwise disclosed)
 (Unaudited)
    Three Months EndedNovember 30,


December 31,2007


2006Related-party revenues before reimbursements:Accenture

$
135,757


$
93,394Microsoft


14,872



8,604Total

$
150,629


$
101,998Related-party reimbursements:Accenture

$
4,371


$
4,076Microsoft


1,414



1,315Total

$
5,785


$
5,391Related-party expenses:Accenture

$
21,365


$
10,071Microsoft


1,178



954Total

$
22,543


$
11,025     November 30,


August 31,2007


2007Due from related parties:Accenture

$
77,568


$
55,008Microsoft


6,543



7,086Total

$
84,111


$
62,094Unbilled services to related parties:Accenture

$
4,539


$
35,540Microsoft


7,942



6,011Total

$
12,481


$
41,551Due to related parties:Accenture

$
17,353


$
6,907Microsoft


496



498Total

$
17,849


$
7,405Deferred revenues:Accenture

$
2,264


$
590Microsoft


1,464



1,577Total

$
3,728


$
2,167    12




---



##### 



AVANADE,
    INC.
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In thousands of U.S. dollars, except share amounts or as
    otherwise disclosed)
 (Unaudited)
    Intercompany
    borrowing facility
      6.
    SEGMENT
    REPORTING    Three Months EndedNovember 30,


December 31,2007


2006Revenues before reimbursements:Americas

$
95,672


$
66,637Europe


83,687



59,409Asia Pacific


19,423



11,692Corporate and eliminations


542



230Total

$
199,324


$
137,968Operating income (loss):Americas

$
18,430


$
12,075Europe


13,796



7,251Asia Pacific


(546
)


504Corporate and eliminations


(9,074
)


(5,870
)Total

$
22,606


$
13,960   7.
    BUSINESS
    COMBINATIONS AND GOODWILL  18-month
 13




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##### 



AVANADE,
    INC.
  NOTES TO CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In thousands of U.S. dollars, except share amounts or as
    otherwise disclosed)
 (Unaudited)
  18-month
  Business Combinations
  8.
    SUBSEQUENT
    EVENT   14




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##### 



ITEM 2.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  The following discussion and analysis should be read in
    conjunction with our Consolidated Financial Statements and
    related Notes included elsewhere in this Quarterly Report on
    Form 10-Q
    and in our Transition Report on
    Form 10-K
    for the
    11-months
    ended August 31, 2007, and with the information under the
    heading Managements Discussion and Analysis of
    Financial Condition and Results of Operations in our
    Transition Report on
    Form 10-K
    for the 11-months ended August 31, 2007.
  We use the terms Avanade, we,
    our Company, our and us in
    this report to refer to Avanade Inc. and its subsidiaries. We
    use the term Accenture to refer to our majority
    shareholder, which is a subsidiary of Accenture Ltd, a Bermuda
    holding company, and its affiliates. We use the term
    Microsoft to refer to Microsoft Corporation, a
    Washington corporation, a minority shareholder, and its
    affiliates. All references to years, unless otherwise noted,
    refer to our fiscal year, which ends on August 31. For
    example, a reference to fiscal 2007 means the
    11-month
    period that ended on August 31, 2007. All references to
    quarters, unless otherwise noted, refer to the quarters of our
    fiscal year. All amounts expressed in dollars are in thousands
    of dollars unless otherwise indicated. For example, a reference
    to $40,800 means $40.8 million.
  Disclosure
    Regarding Forward-Looking Statements
  Form 10-Q
  
    Our results of operations could be negatively affected if we
    cannot expand and develop our services and solutions in response
    to changes in technology and client demand.
    The consulting and systems integration and technology markets
    are highly competitive, and we might not be able to compete
    effectively.
    Our business could be adversely affected if our clients are not
    satisfied with our services.
    Our results of operations may be affected by the rate of growth
    in the use of technology in business and the type and level of
    technology spending by our clients.
    If we are unable to attract, retain and motivate employees or
    efficiently utilize their skills, we might not be able to
    compete effectively and will not be able to grow our business.
    Our results of operations could be affected by economic and
    political conditions and the effects of these conditions on our
    clients businesses and levels of business activity.
    Our profitability could suffer if we are not able to maintain
    favorable pricing rates.
    Our profitability could suffer if we are not able to maintain
    favorable utilization rates.
    Our profitability could suffer if we are not able to control our
    costs.
    Our work with government clients exposes us to additional risks
    inherent in the government contracting environment.
    Our global operations are subject to complex risks, some of
    which might be beyond our control. 15




---



##### 




    If we are unable to manage the organizational challenges
    associated with the expansion of our Company, we might be unable
    to achieve our business objectives.
    Our business could be negatively affected if we incur legal
    liability in connection with providing our solutions and
    services.
    If our pricing structures do not accurately anticipate the cost
    and complexity of performing our work, then our contracts could
    be unprofitable.
    Our results of operations could be adversely affected if our
    clients terminate their contracts with us on short notice.
    If we are unable to collect our receivables or unbilled
    services, our results of operations and cash flows could be
    adversely affected.
    We could be subject to liabilities if our subcontractors or the
    third parties with whom we partner cannot deliver their project
    contributions on time or at all.
    We have only a limited ability to protect our intellectual
    property rights, which are important to our success.
    Our services or solutions could infringe upon the intellectual
    property rights of others or we might lose our ability to
    utilize the intellectual property of others.
    Consolidation in the industries that we serve could adversely
    affect our business.
    There will not be a consistent pattern in our financial results
    from quarter to quarter, which may result in increased
    volatility of the value of our stock.
    Loss of our significant corporate relationships could reduce our
    revenue and growth prospects.
    Because we are controlled by Accenture, we have limited ability
    to set our own independent strategies, and our business strategy
    and direction may be dictated by Accentures overall
    business strategy.
    We rely on Accenture for the majority of our revenue. The loss
    of that revenue would have a significant adverse impact on our
    results of operations and may affect our ability to continue to
    operate.
    Our Global Delivery Network relies on Accenture, and the loss of
    that network would increase our operating expenses.
    Microsoft has certain minority rights, and may exercise those
    rights to protect its own interests which may not align with our
    own.
    We are committed to using Microsoft-related technologies, and
    our inability to use those technologies would adversely impact
    our results of operations.
    All stock issued pursuant to awards granted under our stock
    option plans is subject to certain put rights, which, if
    exercised, could have a materially adverse impact on our
    liquidity.  Form 10-K 11-months
  Change in
    Fiscal Year
   16




---



##### 



Overview
          Three Months EndedNovember 30,


December 31,2007


2006Related-party revenues before reimbursements:Accenture


68
%


68
%Microsoft


7
%


6
%          17




---



##### 



cost-management
        Critical
    Accounting Policies and Estimates
  Form 10-K 11-months
  Reclassification
    of prior-period amounts
   18




---



##### 



Three Months EndedDecember 31, 2006As Reported inAdjusted


Fiscal 2007Cost of services before reimbursable expenses

$
90,324


$
95,379Selling, general and administrative costs


33,684



28,629       Three Months EndedDecember 31, 2006As Reported inAdjusted


Fiscal 2007Operating income (loss):Americas

$
12,075


$
12,342Europe


7,251



7,636Asia Pacific


504



588Corporate and eliminations


(5,870
)


(6,606
)Total

$
13,960


$
13,960   Revenues
    by Segment/Geographic Business Area
   19




---



##### 



Percent ofTotal RevenuesBeforeReimbursementsPercent


for the ThreeThree Months Ended


Percent


Increase


Months EndedNovember 30,


December 31,


Increase


Local


November 30,


December 31,2007


2006


US$


Currency


2007


2006SEGMENTAmericas

$
95,672


$
66,637



44
%


42
%


48
%


48
%Europe


83,687



59,409



41
%


29
%


42
%


43
%Asia Pacific


19,423



11,692



66
%


52
%


10
%


9
%Corporate and eliminations(1)


542



230



n/m



n/m







TOTAL Revenues Before Reimbursements


199,324



137,968



44
%


38
%


100
%


100
%Reimbursements


10,677



9,581



11
%


7
%TOTAL Revenues

$
210,001


$
147,549



42
%


36
%       (1)
    
    Corporate and eliminations include
    inter-company eliminations and other revenues associated with
    our GDN resources, which are not attributable to a specific
    geographic business area.  Three
    Months Ended November 30, 2007 Compared to Three Months
    Ended December 31, 2006
  Revenues
  third-party
       20




---



##### 



Operating
    Expenses
    Cost
    of Services
    Selling,
    General and Administrative Costs
    Operating
    Income
    Three Months EndedNovember 30,


December 31,


Increase2007


2006


(Decrease)Americas

$
18,430


$
12,075


$
6,355Europe


13,796



7,251



6,545Asia Pacific


(546
)


504



(1,050
)Corporate and eliminations


(9,074
)


(5,870
)


(3,204
)$
22,606


$
13,960


$
8,646     
    Americas operating income increased primarily due to strong
    revenue growth and lower compensation costs as a percentage of
    revenues before reimbursements, partially offset by the impact
    of standardized market-based pricing by geographic regions on
    engagements with Accenture.
    Europe operating income increased primarily due to strong
    revenue growth, lower management and royalty fees and
    compensation costs as a percentage of revenues before
    reimbursements, partially offset by the impact of standardized
    market-based pricing by geographic regions on engagements with
    Accenture. 21




---



##### 




    Asia Pacific operating income decreased primarily due to lower
    contract margins resulting from increased use of third-party
    sub-contractors and higher compensation costs.
    Corporate and eliminations operating loss increased primarily
    due to higher compensation costs.  Interest
    Income
    Provision
    (Benefit) for Income Taxes
        Liquidity
    and Capital Resources
      Three Months EndedNovember 30,


December 31,


Increase2007


2006


(Decrease)Net cash provided by (used in):Operating activities

$
35,582


$
2,531


$
33,051Investing activities


(7,256
)


(919
)


(6,337
)Financing activities


649



(6,771
)


7,420Effect of exchange rate changes on cash and cash equivalents


4,807



1,109



3,698Net increase (decrease) in cash and cash equivalents

$
33,782


$
(4,050
)

$
37,832   Operating activities:
  Investing activities:
  Financing activities:
 22




---



##### 



Borrowing
    Facilities
    month-end
    Foreign
    Exchange Instruments
  Accounting for Derivative Instruments and Hedging Activities.
  Redeemable
    Common Stock and Employee Put Rights
  30-day
     23




---



##### 



Obligations
    and Commitments
    Off-Balance
    Sheet Arrangements
  and/or
  Recently
    Adopted Accounting Pronouncements
         24




---



##### 



No. 06-2, Accounting for Sabbatical Leave and Other Similar Benefits
    Pursuant to FASB Statement No. 43 (EITF 06-2). EITF 06-2 EITF 06-2 EITF 06-2
  New
    Accounting Pronouncements
  Business Combinations Business Combinations
  Fair Value Measurements
  ITEM 3.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK  Form 10-K 11-months
  ITEM 4T.
    CONTROLS
    AND PROCEDURES  Evaluation
    of Disclosure Controls and Procedures
  Form 10-Q,
 25




---



##### 



Rule 13a-15(e) 15d-15(e)
  Changes
    in Internal Control Over Financial Reporting
    PART II 
    OTHER INFORMATION
  ITEM 1.
    LEGAL
    PROCEEDINGS      ITEM 1A.  RISK
    FACTORS
  Form 10-K 11-months Form 10-K 11-months
  ITEM 2.
    UNREGISTERED
    SALES OF EQUITY SECURITIES AND USE OF PROCEEDS    Purchases
    of Common Shares
    ApproximateTotal Number of


Dollar Value ofShares


Shares that MayPurchased as


Yet BePart of Publicly


Purchased UnderTotal Number


Average


Announced


Publiclyof Shares


Price Paid


Plans or


Announced PlansPeriod

Purchased(1)


per Share


Programs


or ProgramsSeptember 1, 2007  September 30, 2007


20,410


$
9.54







October 1, 2007  October 31, 2007


24,604



9.54







November 1, 2007  November 30, 2007


41,561



10.57







Total


86,575


$
10.03







  26




---



##### 



(1)
    
    During the first quarter of fiscal
    2008, the Company purchased 86,575 of its common shares in
    transactions unrelated to publicly announced share plans or
    programs. These transactions included the acquisition of
    68,759 shares of the Companys common stock via share
    withholding for payroll obligations due from employees in
    connection with the delivery of shares of the Companys
    common stock under the Companys various equity share
    plans, in addition to 17,816 shares surrendered to the
    Company to pay the exercise price in connection with so-called
    stock-swap exercises of employee stock options.  ITEM 3.
    DEFAULTS
    UPON SENIOR SECURITIES    ITEM 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS    ITEM 5.
    OTHER
    INFORMATION      ITEM 6.
    EXHIBITS    ExhibitNumber

Description of Document3
.1

Restated Articles of Incorporation of the Company, dated as of
    December 4, 2003 (incorporated by reference to
    Exhibit 3.1 to the Companys Form 10, filed
    January 20, 2006)3
.2

Amended and Restated By-laws of the Company, dated as of
    February 29, 2003 (incorporated by reference to
    Exhibit 3.2 to the Companys Form 10, filed
    January 20, 2006)10
.1

Avanade 2008 Executive Bonus Program31
.1

Certification of Chief Executive Officer pursuant to
    Rule 13a-14(a)
    or 15d-14(a) of the Securities Exchange Act of 1934, as adopted
    pursuant to Section 302 of the Sarbanes-Oxley Act of 200231
.2

Certification of Chief Financial Officer pursuant to
    Rule 13a-14(a)
    or 15d-14(a) of the Securities Exchange Act of 1934, as adopted
    pursuant to Section 302 of the Sarbanes-Oxley Act of 200232
.1

Certification of the Chief Executive Officer and the Chief
    Financial Officer pursuant to 18 U.S.C. Section 1350,
    as adopted pursuant to Section 906 of the Sarbanes-Oxley
    Act of 2002  27




---



##### 



SIGNATURES
    Date: January 14, 2008

AVANADE INC.   By:
    /s/  Dennis
    K. Knapp   Title:
    Chief Financial Officer  28