UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                              _______________


                                 FORM 10-Q

(Mark One)

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


For the quarterly period ended              September 30, 2000

                                    OR




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

For the transition period from             to

                       Commission file number  000-22327


                                  CONCERO, INC.
              (Exact name of registrant as specified in its charter)


        Delaware                                  74-2796054
(State or other jurisdiction of           (I.R.S. Employer Identification No.)
incorporation or organization)


6300 Bridgepoint Parkway, Building 3, Suite 200, Austin Texas 78730
(Address of principal executive offices)                      (Zip Code)

Registrant's telephone number, including area code            (512) 343-6666



     Indicate  by check x whether  the  registrant  (1) has  filed  all  reports
required to be filed by  Section 13 or 15(d) of the  Securities  Exchange Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.     Yes ___x___ No __________


     Indicate the number of shares  outstanding of each of the issuer's  classes
of common stock, as of the latest  practicable  date:  10,149,483  shares of the
Company's Common Stock, $.01 par value, were outstanding as of October 31, 2000.
<PAGE>
                                  CONCERO, INC.

                                Table of Contents
                                    <TABLE>
<CAPTION>



                                                                                                               Page
                                            Part I - Financial Information
<S>                                                                                                               <C>
Item 1.     Financial Statements (Unaudited)......................................................................3

            Condensed Consolidated Balance Sheets - December 31, 1999 and September 30, 2000......................3

            Condensed Consolidated Statements of Operations - Three Months and Nine Months Ended
            September 30, 1999 and 2000...........................................................................4

            Condensed Consolidated Statements of Cash Flows - Nine Months Ended September 30,
            1999 and 2000.........................................................................................5

            Notes to Condensed Consolidated Financial Statements..................................................6

Item 2.     Management's Discussion and Analysis of
            Financial Condition and Results of Operations.........................................................8

Item 3.     Quantitative and Qualitative Disclosures about Market Risks..........................................18


                                            Part II - Other Information

Item 2.     Changes in Securities................................................................................18

Item 6.     Exhibits and Reports on Form 8-K.....................................................................18

            Signatures...........................................................................................19
</TABLE>
<PAGE>
                                                  PART 1 - FINANCIAL INFORMATION

Item 1. Financial Statements

<TABLE>
<CAPTION>
                                                                          Concero, Inc.
                                                              Condensed Consolidated Balance Sheets
                                                         (in thousands, except share and per share data)

                                                                                      September 30,
                                                                   December 31,            2000
                                                                       1999            (Unaudited)
<S>                                                                     <C>               <C>
Assets
Current assets:
   Cash                                                                 $ 2,108            $ 441
   Short-term investments                                                18,149           14,836
   Accounts receivable, net of allowance for doubtful
      accounts of  $380 at December 31, 1999 and $1,015 at
      September 30, 1999                                                 10,840           14,329
   Unbilled revenue under customer contracts                              1,150              408
   Income tax receivable                                                      -              825
   Net deferred taxes                                                       447            2,180
   Prepaid expenses and other current assets                                445            1,430
Total current assets                                                     33,139           34,449
Property and equipment, net                                               4,677            6,378

Total assets                                                           $ 37,816         $ 40,827


Liabilities and stockholders' equity
Current liabilities:
   Trade payables                                                        $  925         $  1,080
   Accrued expenses and other current liabilities                         2,954            3,318
Total current liabilities                                                 3,879            4,398

Net deferred taxes                                                          515              515

Stockholders' equity:
  Preferred stock, par value $.01 per share, 1,000,000
     shares authorized and none issued and                                    -                -
     outstanding
  Common stock, par value $.01 per share, 34,000,000
     shares authorized, 9,666,535 and 10,085,114 shares
     issued and outstanding at December 31, 1999 and
     September 30, 2000, respectively                                        97              101
  Additional paid-in capital                                             30,491           33,483
  Accumulated other comprehensive income (loss)                             (39)               6
  Retained earnings                                                       2,873            2,324
Total stockholders' equity                                               33,422           35,914

Total liabilities and stockholder' equity                              $ 37,816         $ 40,827
</TABLE>

                                                         See accompanying notes.
<PAGE>
<TABLE>
<CAPTION>

                                                                          Concero, Inc.
                                                         Condensed Consolidated Statements of Operations
                                                              (in thousands, except per share data)
                                                                           (Unaudited)

                                                          Three Months Ended          Nine Months Ended
                                                            September 30,               September 30,
                                                      --------------------------- ---------------------------
                                                           1999          2000          1999         2000
<S>                                                      <C>            <C>           <C>          <C>
Revenue                                                  $ 11,632       $ 14,224      $ 33,033     $ 45,517
Operating expenses:
   Technical staff                                          6,392          9,160        18,497       25,242
   Selling and administrative staff                         2,208          2,320         6,741        8,067
   Other expenses                                           2,457          6,421         6,992       13,770
Total operating expenses                                   11,057         17,901        32,230       47,079

Income (loss) from operations                                 575         (3,677)          803       (1,562)

Interest income                                               259            226           747          698

Income (loss) before provision (benefit) for
   income taxes                                               834         (3,451)        1,550         (864)

Provision (benefit) for income taxes                          320         (1,225)          600         (315)

Net income (loss)                                          $  514       $ (2,226)       $  950      $  (549)

Basic earnings (loss) per share                           $  0.05       $  (0.22)      $  0.10      $ (0.06)

Diluted earnings (loss) per share                         $  0.05       $  (0.22)      $  0.09      $ (0.06)

Shares used in basic earnings (loss) per share
   calculation                                              9,479         10,018         9,406        9,940

Shares used in diluted earnings (loss) per share
   calculation                                             10,549         10,018        10,327        9,940
</TABLE>

                                                        See accompanying notes.

<PAGE>
<TABLE>
<CAPTION>
                                                                           Concero, Inc.
                                                         Condensed Consolidated Statements of Cash Flows
                                                                          (in thousands)
                                                                           (Unaudited)


                                                                                   Nine Months
                                                                               Ended September 30,
                                                                       -------------------------------------
<S>                                                                          <C>               <C>
                                                                             1999              2000
Operating activities
Net income (loss)                                                            $  950            $  (549)
Adjustments to reconcile net income (loss) to net cash provided
   by (used in) operating activities:
     Depreciation and amortization                                              999              1,696
     Bad debt expense                                                            28              1,154
     Changes in operating assets and liabilities:
        Accounts receivable                                                  (1,035)            (4,643)
        Unbilled revenue under customer contracts                            (1,082)               742
        Prepaid expenses and other current assets                              (105)              (985)
        Trade payables                                                          267                223
        Deferred revenue                                                         35               (123)
        Accrued expenses and other current liabilities                        1,255                599
        Income taxes                                                          1,046               (388)
Net cash provided by (used in) operating activities                           2,358             (2,274)

Investing activities
Purchase securities                                                          (1,522)                 -
Proceeds from sale of short term investments                                      -              3,358
Acquisition of property and equipment                                        (1,190)            (3,481)
Net cash used in investing activities                                        (2,712)              (123)

Financing activities
Issuance of common stock                                                        165                730
Net cash provided by financing activities                                       165                730

Net decrease in cash                                                           (189)            (1,667)
Cash, beginning of period                                                     1,167              2,108

Cash, end of period                                                          $  978             $  441

Non-cash activities:
Unrealized gain on investments                                                $  24              $  45
Reduction of income taxes payable associated with the
   exercise of stock options                                                  $   9            $ 2,266


</TABLE>

                                                         See accompanying notes.

<PAGE>

                                   Concero, Inc.
                Notes to Condensed Consolidated Financial Statements
                                September 30, 2000
                                   (Unaudited)

1.       Basis of Presentation

The accompanying  unaudited condensed  consolidated financial statements include
the accounts of Concero, Inc. and our wholly-owned subsidiaries. All significant
intercompany  balances and transactions  have been eliminated in  consolidation.
The accompanying unaudited condensed consolidated financial statements have been
prepared by us  pursuant  to the rules and  regulations  of the  Securities  and
Exchange   Commission  (the  "SEC")  regarding  interim   financial   reporting.
Accordingly,  they do not  include  all the  information  and notes  required by
accounting  principles  generally  accepted  in the United  States for  complete
financial  statements  and  should  be read in  conjunction  with the  financial
statements  and notes  thereto for the year ended  December 31, 1999 included in
our annual report on Form 10-K. The accompanying  financial  statements  reflect
adjustments,  all of which are of a normal recurring  nature,  which are, in the
opinion of  management,  necessary  for a fair  presentation.  The  results  for
interim periods are not necessarily indicative of full year results.

2.       Significant Accounting Policies

Use of Estimates

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States  requires  management to make estimates
and  assumptions,  including  estimates to complete  contracts,  that affect the
reported  amounts in the financial  statements and  accompanying  notes.  Actual
results could differ from those estimates.

3.       Comprehensive Income (Loss)

As of January 1, 1998, we adopted SFAS No. 130, Reporting  Comprehensive Income.
SFAS  No.  130   establishes   new  rules  for  the  reporting  and  display  of
comprehensive income and its components; however, the adoption of this statement
had no impact on our net income or stockholders'  equity.  SFAS No. 130 requires
unrealized gains or losses on our available-for-sale  securities, which prior to
adoption were reported  separately in  stockholders'  equity,  to be included in
other comprehensive income (loss).

The components of comprehensive income (loss) for the three and nine months
ended September 30, 1999 and 2000 are as follows:
<TABLE>
<CAPTION>
                                                          Three months ended               Nine months ended
                                                            September 30,                    September 30,
                                                         1999            2000             1999           2000
                                                      -----------     -----------       ----------     ----------
<S>                                                        <C>           <C>                <C>             <C>
Net income (loss)                                          $ 514        $ (2,226)           $ 950          $(549)

Unrealized gain (loss) on short term
  investments                                                (25)             22               42             70
Income tax expense (benefit) related to items
  of other comprehensive income                              (10)              8               18             25

                                                      -----------     -----------       ----------     ----------
Comprehensive income (loss)                                $ 499        $ (2,212)           $ 974          $(504)
                                                      ===========     ===========       ==========     ==========

</TABLE>
<PAGE>


                          Concero, Inc.
      Notes to Condensed Consolidated Financial Statements (Continued)
                          (Unaudited)

4.       Earnings (Loss) per Share

The following  table sets forth the  computation of basic and diluted  earnings
loss) per share (in  thousands,  except per share data) for the three months and
nine months ended September 30:
<TABLE>
<CAPTION>
                                                          Three Months Ended                     Nine Months Ended
                                                             September 30,                         September 30,
                                                       1999                2000               1999              2000
                                                   --------------      --------------    ---------------    --------------
<S>                                                      <C>                <C>                 <C>               <C>
Numerator:
  Net income (loss)                                      $   514            $  (2,226)          $   950           $   (549)
                                                   ==============      ==============    ===============    ==============

Denominator:
  Shares used in basic earnings (loss) per
    share calculation                                      9,479              10,018              9,406             9,940

  Effect of dilutive securities:
    Employee stock options                                   638                   -                463                 -
    Warrants                                                 432                   -                458                 -
                                                   --------------      --------------    ---------------    --------------
  Shares used in diluted earnings (loss) per
    share calculation                                     10,549              10,018             10,327             9,940
                                                   ==============      ==============    ===============    ==============

Basic earnings (loss) per share                         $   0.05           $   (0.22)          $   0.10         $   (0.06)
                                                   ==============      ==============    ===============    ==============

Diluted earnings (loss) per share                       $   0.05           $   (0.22)          $   0.09         $   (0.06)
                                                   ==============      ==============    ===============    ==============

</TABLE>
<PAGE>

Item 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

The discussion and analysis below contains  forward-looking  statements,  within
the meaning of Section 27A of the  Securities Act of 1933 and Section 21E of the
Securities  Exchange Act of 1934, that involve risks and uncertainties,  such as
statements regarding our ability to continue to market our services and sell our
services  to  achieve   anticipated  results  or  to  address  emerging  markets
successfully. Such forward looking statements are generally accompanied by words
such as "plan," "estimate," "expect," "believe," "could," "would," "anticipate,"
"may," or other  words that convey  uncertainty  of future  events or  outcomes.
These  forward-looking  statements and other  statements  made elsewhere in this
report are made in reliance on the Private  Securities  Litigation Reform Act of
1995.  The section  below  entitled  "Factors  That May Affect  Future  Results,
Financial  Condition and Market Price of Securities"  sets forth certain factors
that could  cause our actual  future  results  to differ  materially  from these
statements.

Overview

     We are an e-business services firm that offers strategic  consulting skills
with deep technology and integration  expertise.  This combination enables us to
utilize existing and new technologies to provide reliable, flexible and scalable
e-business  solutions.  Our  alliances  with leading  Internet  and  interactive
television  technology  providers allow us to gain a thorough  understanding  of
their  products and  perspective  on other  products as well as  next-generation
technologies.  Using our technology insight and skills, we assist our clients to
define,  design,  develop and deploy  e-business  solutions  that enhance  their
competitive positions.

     We derive our  revenues  from fees for  services  that are  generated on an
engagement-by-engagement basis. During the first nine months of 2000, we derived
approximately  91% of revenues from time and materials  contracts.  We recognize
revenues  generated  under time and  materials  contracts  as the  services  are
provided.  For fixed price  contracts,  which  accounted  for the balance of our
first  nine  months  of  2000   revenues,   we  recognize   revenues  using  the
percentage-of-completion   method.  Using  this  method,  we  recognize  revenue
proportionate  to the  percentage  of  units of  labor  incurred  to the date of
measurement  relative  to the  estimated  total  units of labor for  completion.
Revenues exclude expenses reimbursed by clients.  Software licensing fees do not
constitute a material portion of our revenue base.

<PAGE>

Results of Operations

The following table sets forth the percentage of revenue of certain items
included in our condensed statement of operations for the period indicated:
<TABLE>
<CAPTION>

                                                    Three Months                            Nine Months
                                                 ended September 30,                    Ended September 30,

                                                 1999           2000                    1999           2000
<S>                                              <C>            <C>                     <C>            <C>
Revenue                                          100%           100%                    100%           100%
Operating expenses:
   Technical staff                                55              64                      56             55
   Selling and administrative staff               19              16                      21             18
   Other expenses                                 21              46                      21             30
Total operating expense                           95             126                      98            103
Income (loss) from operations                      5             (26)                      2             (3)
Interest income                                    2               1                       3              1
Provision (benefit) for income taxes               3              (9)                      2             (1)
Net income (loss)                                  4%            (16)%                     3%            (1)%


</TABLE>

Revenue

Our revenue consists primarily of fees for software services  provided.  Revenue
increased  22% to $14.2  million in the quarter  ended  September  30, 2000 from
$11.6 million in the quarter ended  September 30, 1999. In the first nine months
of 2000,  revenue increased 38% to $45.5 million from $33.0 million in the first
nine months of 1999.  These  increases are principally due to the improvement in
our average  hourly bill rate.  Comparing the first nine months of 2000 with the
same period in 1999 our average  hourly bill rate  increased 39%, as a result of
two  primary  factors.  First,  we shifted our focus from  performing  primarily
software  development  maintenance  and support  services in 1999 to  delivering
strategic  e-business services supported by our national eStrategy,  eSolutions,
ePerformance, and eTV and Broadband practices. In the first nine months of 2000,
our e-business  services average bill rate was 140% higher than the average bill
rate for our maintenance and support  services.  Second, we improved the average
bill rate for our  e-business  services.  In the first  nine  months of 2000 our
average  e-business  solutions bill rate improved by 23% over the same period in
1999.

We  experienced  a 17%  decrease  in our  revenue  in the third  quarter of 2000
compared with the second quarter of 2000.  This decline was  principally  due to
changing  market  dynamics  that  resulted in lower  demand and billed hours for
e-business  services  in the third  quarter  of 2000  compared  with the  second
quarter of 2000.  Much of this is  attributable  to the reduced  funding of, and
spending by, Internet and start-up  businesses and lengthening  sales cycles for
the more established companies.

IBM  accounted  for 11% and 29% of revenue  in each of the first nine  months of
2000 and 1999,  respectively.  The IBM revenue  consists of revenues  from three
different IBM organizations: IBM, Tivoli and Lotus. Another client accounted for
11% of revenue for the first nine months of 1999 and  another  client  accounted
for 13% of revenue for the first nine months of 2000. No other client  accounted
for more than 10% of revenue for either period.

Technical Staff

Technical staff expenses consist of the cost of salaries,  payroll taxes, health
insurance and workers' compensation  for technical staff personnel  assigned to
client engagements and unassigned technical staff
<PAGE>
personnel,  and fees paid to any subcontractors for work performed in connection
with a client engagement. Technical staff expenses increased 43% to $9.2 million
in the quarter  ended  September 30, 2000 from $6.4 million in the quarter ended
September  30, 1999.  Technical  staff  expenses were $25.2 million in the first
nine months of 2000,  an  increase of 36% over $18.5  million for the first nine
months of 1999. The increase in technical staff expenses is primarily due to the
addition  of  personnel  to service  the  increase in scope and number of client
engagements.

As a percentage of revenue,  technical  staff  expenses  increased to 64% in the
quarter ended  September  30, 2000 from 55% in the quarter  ended  September 30,
1999.  This  increase was  primarily the result of a decline in revenue from the
second quarter of 2000 coupled with an increase in our billable staff. Technical
staff expenses  decreased to 55% of revenues for the nine months ended September
30, 2000 from 56% for the nine months ended  September 30, 1999,  primarily as a
result of higher  revenues  resulting from the improvement in our average hourly
bill rate.

Selling and Administrative Staff

Selling  and  administrative  staff  expenses  consist of the cost of  salaries,
payroll taxes, health insurance and workers' compensation for selling, marketing
and administrative  personnel, and all commissions and bonuses paid to technical
and administrative staff. Selling and administrative staff expenses increased 5%
to $2.3 million in the quarter ended September 30, 2000 from $2.2 million in the
quarter  ended  September  30,  1999.  This  increase is due to the  addition of
selling and  administrative  staff offset by a reversal of an accrued bonus pool
of $590,000 during the third quarter of 2000 as a consequence of lower operating
income when  compared  with fiscal year 2000 targets  required for payment under
the bonus plan. Selling and  administrative  staff expenses were $8.1 million in
the first nine months of 2000, an increase of 20% from $6.7 million in the first
nine months of 1999.  This  increase was as a result of additions to our selling
and administrative staff.

As a percentage of revenues, selling and administrative staff expenses decreased
to 16% in the quarter  ended  September  30, 2000 from 19% in the quarter  ended
September 30, 1999, largely as a result of the reversal of an accrued bonus pool
of $590,000 during the third quarter of 2000. Selling and  administrative  staff
expenses  decreased  to 18% of revenue for the nine months ended  September  30,
2000 from 21% for the first nine months of September  30,  1999,  primarily as a
result of higher revenues and the reversal of the aforementioned bonus pool.

Other Expenses

Other expenses consist of all non-staff  related costs, such as occupancy costs,
travel,  business  insurance,  business  development,  recruiting,  training and
depreciation. Other expenses increased 161% to $6.4 million in the quarter ended
September  30, 2000 from $2.5 million in the quarter  ended  September 30, 1999.
During the third quarter of 2000, other expenses increased due to several items,
including the addition of $1.1 million to our bad debt reserves, the recognition
of $750,000 of deferred expenses related to a cancelled  secondary  offering and
the  write-off of a $125,000  investment  in a start-up  company.  The remaining
increase is primarily  due to the addition and expansion of our  facilities  and
higher  recruiting,  advertising,  training  and  travel  related  costs.  Other
expenses were $13.8 million in the first nine months of 2000, an increase of 97%
over other  expenses  of $7.0  million in the first  nine  months of 1999.  This
increase  is  primarily  due to the  aforementioned  items  affecting  the third
quarter and the cost of our branding and public relations launch associated with
the change of our name to Concero during the first quarter of 2000.

As a percentage  of  revenues,  other  expenses  increased to 46% in the quarter
ended  September  30, 2000 from 21% for the quarter  ended  September  30, 1999.
Other  expenses  increased  to 30% of revenue  in the first nine  months of 2000
compared to 21% in the first nine months of 1999.
<PAGE>
Income from Operations

We  recorded  a loss from  operations  of $3.7  million  for the  quarter  ended
September  30, 2000 a decrease  from income from  operations of $575,000 for the
quarter ended  September  30, 1999.  We recorded a loss from  operations of $1.6
million in the first nine months of 2000, a decrease from income from operations
of $803,000 in the first nine months of 1999. As a percentage of revenues,  loss
from  operations  was 26% for the quarter  ended  September 30, 2000 compared to
income from operations of 5% for the quarter ended September 30, 1999. Loss from
operations was 3% of revenue in the first nine months of 2000, compared to 2% of
revenue in the first nine months of 1999.

Income Taxes

The benefit from income  taxes of $315,000  for the nine months ended  September
30, 2000 is computed using an estimated  annual  effective tax rate of 36%. This
differs  from the  federal  statutory  rate of 34% as a result  of state  taxes,
tax-exempt interest income and permanent differences for meals and entertainment
expenses.

The provision  for income taxes of $600,000 for the nine months ended  September
30, 1999 is computed using an estimated  annual effective tax rate of 39%, which
differs from the federal  statutory rate of 34% primarily due to state taxes and
permanent differences for meals and entertainment expenses.

Liquidity and Capital Resources

We have  historically  financed our operations  and met our capital  expenditure
requirements  primarily  through cash flows from  operations.  Our liquidity and
financial position consisted of $30.1 million in working capital as of September
30,  2000  compared to $29.3  million as of December  31,  1999.  Our  operating
activities  used cash of $2.3  million  for the first nine  months of 2000.  Our
operating  activities provided cash of $2.4 million for the first nine months of
1999.  We purchased  approximately  $3.5 million and $1.2 million of  computers,
office and system  equipment  and  software in the first nine months of 2000 and
1999,  respectively.  At September 30, 2000, we had cash,  cash  equivalents and
short-term investments totaling $15.3 million.

At September  30, 2000,  we did not have any  material  commitments  for capital
expenditures.   We  have  budgeted   approximately   $4.0  million  for  capital
expenditures  for fiscal  2000 of which  $3.5  million  has been  spent  through
September  30, 2000.  Our capital  expenditures  normally  consist  primarily of
purchases of laptop  computers,  computer  servers and furniture,  the amount of
which  fluctuates  based on the number of  additional  employees we hire and the
number of new offices that we open in any period.

The number of days of revenue in our accounts receivable balance fluctuated from
84 days to 95 days  during the first nine months of 2000 and  increased  from 93
days as of June 30, 2000. We may  experience  longer  collection  periods if the
work we perform for smaller  companies  increases as a  percentage  of our total
services.

We anticipate that our existing cash, cash equivalents and short-term investment
balances and potential cash flows from  operations  will be adequate to fund our
working capital and capital  expenditure  requirements  for at least the next 12
months.  However,  changes  may  occur  that  could  consume  available  capital
resources before such time. Our capital requirements depend on numerous factors,
including  potential  acquisitions,  the  timing  of  the  receipt  of  accounts
receivable,  employee  growth and the  percentage  of projects  performed at our
facilities.

We currently do not maintain any committed credit  facilities.  We cannot assure
you that commercial  credit, if necessary,  will be available to us on favorable
terms, or at all.

<PAGE>
Factors That May Affect Future Results, Financial Condition
   and Market Price of Securities

Risks that Relate to Our Business Strategy

     We are subject to a number of risks  related to our business  strategy.  We
describe  some of these risks  below.  If any of these risks  materializes,  our
business, financial condition and results of operations could be harmed, and our
stock price could fall.

   We have refocused our business strategy. This may not be successful.

     In August 1998, we began building a new management team. The new management
team has  refocused  our business  strategy.  This  strategy is described in the
"Business"  section in our Annual Report on Form 10-K filed March 14, 2000. Some
of the changes to our business strategy include:

o        expansion into new and largely untested business areas such as eTV and
         broadband services;

o        realignment of our internal corporate structure on a geographic basis;
         and

o        a shift in focus of our client base from technology  vendors to
         technology users, and a shift from longer-term  development and
         maintenance  arrangements to specific, shorter-term e-business project
         engagements.

     Our shift from ongoing development and maintenance engagements to strategic
engagements  has favorably  affected our average  billing  rates but  negatively
affected  our  technical  staff  utilization  rates.  If we are unable to offset
decreases in our utilization  rates through  increases in our billing rates, our
profitability will be harmed.  Adverse economic  conditions,  a lack of consumer
acceptance  of  eTV,  broadband  and  other  advanced  technologies,   increased
competition  and other  factors  could hurt both our  utilization  rates and our
billing  rates.  As a result,  it is too early to know whether the refocusing of
our business  strategy will help us achieve  long-term  success.  Companies that
implement  major changes in their  business  strategy can face more  challenging
risks  and  unexpected   difficulties.   These  risks  and  difficulties   apply
particularly to us because the market for our Internet and e-business consulting
services is new and rapidly evolving.

   The success of our business strategy depends on our ability to identify
emerging technologies that will gain wide acceptance in future markets.

     Our business strategy requires us to:

o        identify promising technologies at an early stage in their development;

o        accurately assess their long-term viability; and

o        rapidly gain expertise in these technologies.

     Our  business may suffer if we invest time and  resources  in  technologies
that ultimately do not reach  widespread use or commercial  success.  Even if we
identify the best  technologies,  their  widespread  use and  deployment may not
occur within a time span that is compatible  with our business plans and revenue
expectations.

     In particular,  some of the  technologies  that we are focusing on heavily,
such as eTV and broadband,  may not achieve  business or consumer  acceptance in
the near term,  or at all. For example,  companies  promoting  eTV and broadband
services may find that  consumers are reluctant to use them, for reasons of cost
or  complexity.  As a  result,  we  may  use  substantial  resources  developing
expertise in areas that will not yield substantial revenues or profits for us in
the next few years.
<PAGE>
     Our  business  strategy  depends  on our  ability  to create  and  maintain
strategic  alliances  with other  e-business  and  technology  companies.  These
alliances may shift or terminate suddenly.

     We currently maintain strategic alliances with other companies that help us
to gain access to new technology and business opportunities.  This is one of the
principles  of our exponet  strategy.  Like many in our  industry,  we sometimes
refer to these companies as our "partners", but they are not partners in a legal
sense. In particular,  these companies are under no binding obligation to remain
in  relationships  with us or to  continue  to  cooperate  with  us,  and  these
relationships are generally not exclusive.

     Any of our  alliance  partners  may choose to end the  alliance,  alter the
terms of the  alliance in a way that harms our business or increase the level of
business they conduct with our  competitors.  Similarly,  if one of our alliance
partners  undergoes a management  or ownership  change,  we could lose access to
critical  technology  and business  opportunities.  In addition to a decrease in
revenue,  the publicity that could accompany these kinds of changes could have a
damaging effect on our stock price.

     Moreover,  our brand may be closely associated with the business success or
failure of some of our high-profile alliance partners, many of whom are pursuing
unproven  business models in competitive  markets.  As a result,  the failure or
other difficulties of these companies may damage our brand and hurt our business
opportunities.

   Some of our clients are emerging companies that have little or no operating
history and may lack the resources to pay our fees.

     Because we focus on emerging  technologies,  we derive some of our revenues
from  small  companies,   particularly  start-up  companies  that  have  limited
operating   histories  and  resources  to  pay  our  fees.  Our  business  model
contemplates increasing the amount of business we do with these companies. These
companies  often  have  little or no  earnings  or cash  flow and are  generally
considered to have a greater risk of failing than more  established  businesses.
As a result,  these  clients may not be able to pay for our services in a timely
manner,  or at all.  These effects would lead to an extension of our  collection
period, which would harm our liquidity, and an increase in our bad debt expense,
which would harm our profitability.

     We may make  investments in clients or potential  clients that are emerging
companies.  These  investments are risky,  we have limited  experience in making
these investments and we could lose all of our investment.

     Although not a key part of our strategy,  we may make strategic investments
in small,  emerging clients or potential clients,  either in cash or in kind. We
may also agree to take some or all of our fees in the form of equity  securities
issued by these clients as part of our engagement.  Investments in such emerging
companies are extremely  risky and some or all of our investment  could be lost.
We  have  limited   experience  in  these   investments  or  in  managing  these
arrangements.

   Potential acquisitions could be difficult to integrate, disrupt our business
dilute stockholder value and hurt our operating results.

     As part of our  growth  strategy,  we  intend  to  pursue  acquisitions  of
businesses and technologies that are  complementary to our core businesses.  Our
ability  to  grow  through  acquisitions  will  depend  on the  availability  of
attractive acquisition candidates, our ability to successfully compete for these
acquisition  candidates  and  the  availability  of  capital  to  finance  these
acquisitions.

     The benefits of an acquisition often may take considerable time to develop,
and the acquisition may never produce the intended benefits.  Factors that could
cause an acquisition to be unsuccessful include:
<PAGE>
o        the loss of employees or clients of the acquired business, and thus a
         loss of one of the key rationales for making the acquisition;

o        our failure to appreciate the dynamics of markets in which we have
         limited or no prior experience;

o        the diversion of management's attention from our core businesses;

o        any difficulties we experience in assimilating the operations of an
         acquired business or in realizing  projected  efficiencies,  cost
         savings and revenue synergies;

o        our failure to assess or discover liabilities;

o        the dilution of our stockholders' equity and earnings per share,
         particularly if we finance the acquisitions with equity; and

o        an increase in our debt and  contingent  liabilities,  which in turn
         could  restrict  our ability to access  additional capital when needed
         or to pursue other important elements of our business plan.

   If we fail to manage our growth, our resources may be strained and our
ability to implement our business strategy will be harmed.

     Our growth  could place  significant  demands on our  management  and other
resources.  In order to manage  our  growth  effectively,  we must  continue  to
develop and improve our operational,  financial and other internal  systems,  as
well as our business development capabilities,  and we must continue to attract,
train,  retain,  motivate and manage our employees.  We may not succeed in these
efforts.

Risks that Relate to Our Business

     We are subject to a number of risks that are particular to our business and
that may or may not affect our competitors.  We describe some of these below. If
any of these risks materializes,  our business,  financial condition and results
of operations could be harmed, and our stock price could fall.

     Our key employees are critical to our continued success. The loss of any of
these  employees  could  impair our ability to execute our  strategy or grow our
business.

     Our future  success  will depend in part upon the  continued  services of a
number of key  management  and technical  employees.  The loss of any of our key
personnel  could hurt our ability to execute our strategy and grow our business.
We do not  maintain  key-person  life  insurance  on any  of our  employees.  In
addition,  if one or more of our key employees resign to join a competitor or to
form a competing  business,  we could lose existing or potential clients. In the
event  we lose  any of  these  employees,  we may not be  able  to  prevent  the
disclosure  or  use  of  our  proprietary  technical  knowledge,  practices  and
procedures.

   We need to recruit, train and retain qualified employees to successfully grow
our business.

     Our success depends on our ability to recruit,  train, retain, motivate and
manage highly skilled employees. Qualified project managers, software architects
and senior technical and professional staff with the skills we need are in great
demand worldwide and are likely to remain a limited resource for the foreseeable
future.  We may not be  able  to hire a  sufficient  number  of  highly  skilled
employees.  In addition,  the highly  competitive labor market may require us to
raise  salaries  faster  than we have in the past,  and faster than we raise our
billing rates.

<PAGE>
     We have  experienced  a high rate of  attrition  in the past,  particularly
around the time of our  management  change.  If we continue to  experience  high
rates of  attrition,  it will be even  more  difficult  to  execute  our  growth
strategy.

     We may also be  unsuccessful  in training,  retaining  and  motivating  our
employees.  If our employees do not achieve the required  levels of performance,
our ability to manage and staff  existing  projects  and to obtain new  projects
might suffer.

 We changed our name.

     We changed  our name to  Concero,  Inc.  Although we have filed a trademark
application  for this  name,  we may be unable to  protect  our name or  prevent
others  from  using our name.  Other  parties  may claim that our use of Concero
violates their intellectual  property rights. If we are prevented from using the
Concero  name,  it may become more  difficult  for us to carry out our  business
plans. In addition, our planned advertisement of the change and promotion of our
new brand may fail to reach important  segments of our potential  customer base,
and our marketing campaign may yield little results.

 We may not be able to protect our intellectual property and proprietary
rights.

     Our proprietary  intellectual  property consists of the business  processes
and  software  that we develop to assist  clients.  Our  efforts to protect  our
proprietary  rights  may  not be  adequate  to  deter  theft  or  misuse  of our
intellectual  property.  We may not be able to  detect  unauthorized  use of our
intellectual property and take appropriate steps to enforce our rights. If third
parties  infringe,   misappropriate  or  copy  our  trade  secrets,  proprietary
processes,  copyrights,  trademarks or other proprietary  information,  we could
lose important competitive advantages.

 We could be subject to claims that we infringe the intellectual property
rights of others.

     There  has been a marked  increase  in  patent  and  intellectual  property
litigation  in  recent  months,   particularly   involving  competitors  in  the
technology sector. Although we are not aware that any of our activities infringe
the patent or other  intellectual  property rights of others, we have not sought
any  formal  assurances  that  this  is  the  case.  Other  parties  may  assert
infringement claims against us or claim that we have violated their intellectual
property  rights.  These claims,  even if not true,  could result in significant
legal and other costs and may  distract  our  management.  If we are required to
stop using a particular  methodology  or technology  because of an  infringement
lawsuit, it could become extremely difficult to carry out our business plans.

     We depend on a small  number of clients  for a  significant  portion of our
revenues.

     During the first nine months of 2000,  we derived  40% of our revenue  from
our five largest clients. Our largest client accounted for 13% of our revenue in
the first nine months of 2000. The volume of work performed for specific clients
is likely to vary from year to year,  and a major client in one year may not use
our  services in another  year.  The loss or  reduction  of our revenue due to a
decline in services performed for any large client could harm our business.

   Our lack of long-term contracts with clients makes our revenues difficult to
predict.

     Our clients  retain us on an  engagement-by-engagement  basis,  rather than
under  long-term  contracts.  As  a  result,  the  size  and  number  of  client
engagements are difficult to predict, and vary markedly from quarter to quarter.
At the same time,  our  operating  expenses are  relatively  fixed and cannot be
reduced on short
<PAGE>
notice for  unanticipated  shortfalls  in our revenue.  This is because our most
significant operating expense is employee salaries.

     Moreover,  our clients can  generally  reduce the scope of our  services or
cancel our engagements without penalty and with little or no notice. If a client
postpones,  modifies  or cancels an  engagement  or chooses not to retain us for
additional  phases of a project,  we might not be able to redeploy our employees
quickly to other engagements.

     Some of our client  contracts  are on a  fixed-price  basis.  If we fail to
accurately  estimate the  resources  required  for a  fixed-price  project,  our
profitability could be harmed.

     During the first nine months of 1999 and 2000,  we generated  approximately
22%   and   9%,    respectively,    of   our    revenue   on   a    fixed-price,
fixed-delivery-schedule  basis, rather than on a time-and-materials basis. If we
fail to accurately  estimate the resources required for a fixed-price project or
fail to complete our  obligations  on time, our revenues could be harmed and our
expenses could increase.  We sometimes must revise project plans after beginning
a project because we failed to accurately estimate the resources required.

Risks that Relate to Our Industry

     We are  subject to a number of risks that are  inherent  in the  technology
industry.  We describe some of these below. If any of these risks  materializes,
our business, financial condition and results of operations could be harmed, and
our stock price could fall.

   Our industry is intensely competitive.

     We expect  competition to persist and intensify in the future. We cannot be
certain  that  we will be able to  compete  successfully  with  existing  or new
competitors. If we fail to compete successfully, our business would be seriously
harmed. Competition can make it more difficult for us to:

o        attract and retain customers;

o        expand our sales and marketing activities;

o        create and maintain the strategic  relationships  that are vital to
         success in the Internet and e-business marketplace, and thus develop
         and acquire knowledge of leading-edge technologies; and

o        recruit and maintain the highly skilled technical staff that our
         business model demands.

     We  compete  against  numerous  companies  that  offer  Internet  services,
software engineering,  systems integration, or management consulting, as well as
the  consulting  divisions of large  accounting  firms.  Because  relatively low
barriers to entry  characterize  the market,  we expect other companies to enter
our market.  Some large  information  technology  firms have announced that they
will focus more resources on e-business opportunities.

     Many of our current  competitors  have longer operating  histories,  larger
client bases, larger professional staffs,  greater brand recognition and greater
financial,  technical,  marketing and other resources than we do. This may place
us at a  disadvantage  in responding  to our  competitor's  pricing  strategies,
technological advances,  advertising campaigns, strategic partnerships and other
initiatives.   In  addition,  many  of  our  competitors  have  well-established
relationships  with  our  current  and  potential  clients  and  have  extensive
knowledge of our industry.  As a result,  our competitors may be able to respond
more  quickly  to  new  or  emerging   technologies   and  changes  in  customer
requirements,  and  they  may  also be  able to  devote  more  resources  to the
development,  promotion and sale of their services than we can. Competitors that
offer  more
<PAGE>

standardized  or less  customized  services than we do may have a substantial
cost advantage, which could force us to lower our prices, adversely affecting
our operating margins.

     Current and potential  competitors  also have  established or may establish
cooperative  relationships  among  themselves  or with third parties to increase
their ability to address  customer needs.  Accordingly,  it is possible that new
competitors  or  alliances  among  competitors  may emerge and  rapidly  acquire
significant  market  share.  In addition,  some of our  competitors  may develop
services  that are superior  to, or have greater  market  acceptance  than,  the
services that we offer.

 Our success  depends on the  continued  growth and  acceptance  of advanced
technologies.

     Our future  success  depends  heavily on the further  widespread use of the
Internet as a means for commerce,  and consumer and commercial acceptance of eTV
and broadband.  Despite the large amount of investor and media  attention  these
technologies  have received,  they are in early stages of development  and it is
difficult to predict  whether or how they will continue to develop.  A number of
factors, such as government  regulation,  taxation,  general economic conditions
and lack of consumer  acceptance could hinder development of these technologies.
If these new technologies fail to gain widespread acceptance or grow more slowly
than expected,  our business  opportunities will diminish.

Risks that Relate to Our Stock

     Our stock price is subject to a number of risks.  We describe some of these
below. If any of these risks materializes, our stock price could fall.

 Our quarterly operating results will vary, which may affect the market price
of our common stock in a manner unrelated to our long-term performance.

     Our quarterly  operating results have varied in the past and we expect that
they will continue to vary in the future depending on a number of factors,  many
of which are  outside  of our  control.  Factors  that may  cause our  quarterly
operating results to vary include:

o        the number, size and scope of projects in which we are engaged;

o        the contractual terms and degree of completion of these projects;

o        any delays incurred in connection with a project;

o        our success in earning bonuses or other contingent payments;

o        our employee hiring and utilization rates;

o        the adequacy of provisions for losses;

o        the accuracy of our estimates of resources required to complete
         ongoing projects;

o        customer budget cycles and spending priorities; and

o        general economic conditions.

     A high  percentage of our operating  expenses,  particularly  personnel and
rent, are fixed in advance of any particular quarter. As a result, unanticipated
variations in the number of our projects,  in our progress on projects or in our
employee utilization rates may cause significant variations in operating results
in  any  particular   quarter.   Given  the   possibility  of  these   quarterly
fluctuations, we believe that comparisons of our
<PAGE>
quarterly  results are not necessarily  meaningful  and that  results for one
quarter  should not be relied upon to predict our future performance.

     Any quarterly  shortfall in revenue or earnings from  expected  levels,  or
other short-term failures to meet the expectations of securities analysts or the
market in general, can have an immediate and damaging effect on the market price
of our common stock.

   Our common stock may experience extreme price and volume fluctuations.

     The stock  market,  from time to time,  has  experienced  extreme price and
volume  fluctuations.  The  market  prices of the  securities  of  Internet  and
technology companies have been especially volatile,  including fluctuations that
often are  unrelated to the  operating  performance  of the affected  companies.
Broad market  fluctuations of this type may adversely affect the market price of
our common stock.

     The  market  price of our  common  stock has  fluctuated  since we became a
public company. Our stock price could continue to fluctuate significantly due to
a variety of factors, including:

o        public announcements concerning us, our competitors or the technology
         industry;

o        fluctuations in our operating results;

o        introductions of new products or services by us or our competitors;

o        changes in analysts' revenue or earnings estimates; and

o        announcements of technological innovations.

     In the past, companies that have experienced volatility in the market price
of their stock have been the target of securities class action litigation. If we
were sued in a securities  class action,  we could incur  substantial  costs and
suffer from a diversion of our management's attention and resources.
<PAGE>
Item 3.

Quantitative and Qualitative Disclosures about Market Risks

     Information  concerning  market  risk is  contained  on page 24 of our 1999
Annual  Report on Form 10-K and is  incorporated  by  reference  to such  annual
report.

PART II - OTHER INFORMATION

Item 2.   Changes in Securities

          We issued  approximately  18,000 shares from July 1 through September
          30, 2000 and  approximately  8,000 shares from April 1, 2000 through
          June 30, 2000 of our common  stock  pursuant to exercises  of stock
          purchase  warrants  issued in  connection  with the transfer of assets
          to the Company from Pencom Systems  Incorporated  in October 1996.
          The warrants have an exercise  price of $0.04 per share.  The
          issuances were deemed exempt from registration under  Section 5 of the
          Securities  Act of 1933 in reliance  upon Section 4(2) thereof or Rule
          701  thereunder  and  appropriate  restrictive  transfer legends were
          affixed to the share certificates issued in such transaction.

Item 6.   Exhibits and Reports on Form 8-K

          (a)Exhibits

Number            Description
<PAGE>
27.1                       Financial Data Schedule

         (b) Reports on Form 8-K

                  None.

<PAGE>
                            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.


                            CONCERO, INC.
                             (Registrant)



Date:  November 14, 2000            /s/ Timothy D. Webb
                                    Timothy D. Webb
                                    President and Chief Executive Officer
                                    (Principal Executive Officer)



Date: November 14, 2000             /s/ Keith D. Thatcher
                                    Keith D. Thatcher
                                    Vice President of Finance, Treasurer and
                                    Chief Financial Officer
                                    (Principal Financial Officer)



Date: November 14, 2000             /s/ Kasaundra L. Smith
                                    Kasaundra L. Smith
                                    Controller
                                    (Principal Accounting Officer)