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

                                    FORM 10-Q

       (X)  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
              OF THE SECURITIES EXCHANGE ACT OF 1934
                  For the Quarterly period ended September 30, 1999

                                       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 0-27280


                                META Group, Inc.
             (Exact name of registrant as specified in its charter)


                  Delaware                             06-0971675
      ------------------------------          --------------------------------
     (State or other jurisdiction of          (IRS Employer Identification No.)
       incorporation or organization)

               208  Harbor Drive, Stamford, Connecticut 06912-0061
               ---------------------------------------------------
         (Address of  principal executive offices, including Zip Code)

                                (203) 973-6700
                               --------------
             (Registrant's telephone number, including area code)

                         ----------------------------

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports), and (2) has  been  subject to such filing
requirements for the past 90 days.

         Yes    (X)                    No ( )

Indicate the number of shares  outstanding  of each of the  issuer's  classes of
common stock,  as of the latest  practicable  date:  The number of shares of the
issuer's Common Stock,  $.01 par value per share, outstanding as of November 9,
1999 was 10,104,385.

                            Total Number of Pages:  22
                           Exhibit Index is on Page 21

<PAGE>

                                META Group, Inc.


                                      INDEX
                                      -----
                                                                            Page
                                                                            ----
Part I         FINANCIAL INFORMATION

       Item 1. Financial Statements

               Consolidated Balance Sheets:

                 September 30, 1999 (unaudited) and December 31, 1998         3

               Consolidated Statements of Income (unaudited):
                 Three and nine months ended September 30, 1999 and 1998      4

               Consolidated Statements of Cash Flows (unaudited):
                 Nine months ended September 30, 1999 and 1998                5

               Notes to Consolidated Financial Statements                     6

       Item 2. Management's Discussion and Analysis of Financial Condition
                 and Results of Operations                                    9

       Item 3. Quantitative and Qualitative Disclosures About Market Risk    19


Part II        OTHER INFORMATION

       Item 1. Legal Proceedings                                             19

       Item 6. Exhibits and Reports on Form 8-K                              19


Signature                                                                    20


<PAGE>

<TABLE>

PART I - FINANCIAL INFORMATION

         Item 1.  Financial Statements



                                META Group, Inc.

                           CONSOLIDATED BALANCE SHEETS
                                 (in thousands)
<CAPTION>

                                                  September 30,    December 31,
Assets                                               1999                1998
                                                 -------------     -------------
<S>                                              <C>                 <C>

Current assets:                                   (unaudited)
   Cash and cash equivalents                          $4,534            $9,945
   Marketable securities                               7,281            21,031
   Accounts receivable, net                           39,178            35,306
   Deferred commissions                                1,897             1,436
   Deferred tax asset                                    991             3,808
   Other current assets                                4,939             2,894
                                                  ----------        ----------
        Total current assets                          58,820            74,420

Marketable securities                                  6,470            15,850
Furniture and equipment, net                           6,882             4,553
Deferred tax asset                                       249               792
Goodwill, net                                          5,580             5,528
Other assets                                          17,154            11,044
                                                 -----------       -----------
        Total assets                                 $95,155          $112,187
                                                 ===========       ===========

Liabilities and Stockholders' Equity
Current liabilities:
   Accounts payable                                      $86            $1,432
   Deferred revenues                                  34,405            31,276
   Accrued compensation                                2,733             5,314
   Other current liabilities                           1,074             1,475
                                                 -----------      ------------
        Total current liabilities                     38,298            39,497
                                                 -----------      ------------

Stockholders' equity:
   Preferred stock                                         -                 -
   Common stock                                          107               123
   Paid-in capital                                    37,126            58,443
   Retained earnings                                  20,255            14,444
   Accumulated other comprehensive loss                 (311)                -
   Treasury stock, at cost                              (320)             (320)
                                                 -----------       -----------
        Total stockholders' equity                    56,857            72,690
                                                 -----------       -----------

        Total liabilities and stockholders Equity    $95,155          $112,187
                                                 ===========       ===========


              See notes to consolidated  financial statements.

</TABLE>

<PAGE>

<TABLE>
                               META Group, Inc.

                        CONSOLIDATED STATEMENTS OF INCOME
                      (in thousands, except per share data)
                                   (unaudited)

<CAPTION>

                                                  For the three months ended          For the nine months ended
                                                       September 30,                      September 30,
---------------------------------------------------------------------------------------------------------------
                                                    1999           1998                1999          1998
                                                 ----------     ----------          ----------     ----------
<S>                                              <C>             <C>            <C>               <C>
Revenues:
  Continuous Advisory Services                     $18,229        $15,244             $50,885        $42,229
  Project Consulting                                 5,978          1,992              14,099          4,773
  Published Research                                 1,272          1,218               4,711          3,054
                                                 ----------     ----------          ----------     ----------

      Total revenues                                25,479         18,454              69,695         50,056
                                                 ----------     ----------          ----------     ----------

Operating expenses:
  Cost of services and fulfillment                  13,282          8,675              37,451         24,070
  Selling and marketing                              5,395          4,270              16,183         11,766
  General and administrative                         2,006          1,764               5,879          4,721
  Depreciation and amortization                        683            458               1,935          1,358
                                                 ----------     ----------          ----------     ----------

      Total operating expenses                      21,366         15,167              61,448         41,915
                                                 ----------     ----------          ----------     ----------

Operating income                                     4,113          3,287               8,247          8,141

Other income, primarily interest, net                   93            681               1,656          1,963
                                                 ----------     ----------          ----------     ----------

Income before provision for income taxes             4,206          3,968               9,903         10,104

Provision for income taxes                           1,752          1,612               4,092          4,133
                                                 ----------     ----------          ----------     ----------

Net income                                         $ 2,454        $ 2,356             $ 5,811        $ 5,971
                                                 ==========     ==========          ==========     ==========

Net income per diluted common share                $   .23        $   .19             $   .50        $   .48
                                                 ==========     ==========          ==========     ==========

Weighted average number of diluted common
shares outstanding                                  10,807         12,717              11,708         12,539
                                                 ==========     ==========          ==========     ==========

Net income per basic common share                  $   .24        $   .21             $   .53        $   .53
                                                 ==========     ==========          ==========     ==========

Weighted average number of basic common
shares outstanding                                  10,095         11,350              10,919         11,254
                                                 ==========     ==========          ==========     ==========


                                        See notes to consolidated  financial statements.
</TABLE>

<PAGE>

<TABLE>

                                META Group, Inc.

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)
                                   (unaudited)

<CAPTION>


                                                                                        For the nine months ended
                                                                                            September 30,
-----------------------------------------------------------------------------------------------------------------------
                                                                                          1999               1998
                                                                                   -----------        -----------
<S>                                                                                  <C>                 <C>
Operating activities:
Net income                                                                             $5,811             $5,971
Adjustments to reconcile net income to net cash provided by
      Operating activities:
  Depreciation and amortization                                                         1,935              1,358
  Deferred income taxes                                                                 3,575              3,915
  Changes in assets and liabilities:
    Accounts receivable                                                                (4,974)               798
    Other current assets                                                               (2,259)              (886)
    Other assets                                                                       (1,303)              (809)
    Accounts payable                                                                   (1,375)              (907)
    Accrued expenses and other current liabilities                                     (2,982)               168
    Deferred revenues                                                                   3,129             (2,115)
                                                                                   -----------         -----------
 Net cash provided by operating activities                                              1,557              7,493
                                                                                   -----------         -----------

Investing activities:
   Capital expenditures                                                                (4,089)            (2,277)
   Proceeds from sales/maturities of (investments in) marketable securities - net      22,344             (5,067)
   Investments and advances                                                            (3,890)            (1,192)
                                                                                   -----------         ----------
Net cash provided by (used in) investing activities                                    14,365             (8,536)
                                                                                   -----------         ----------

Financing activities:
   Proceeds from exercise of stock options                                              1,067              1,246
   Proceeds from employee stock purchase plan                                             351                168
   Reacquisition of shares                                                            (22,485)               -
   Reacquisition of shares - current stockholder                                         (266)               -
                                                                                   -----------         ----------
Net cash (used in) provided by financing activities                                   (21,333)             1,414
                                                                                   ------------        ----------

Net (decrease) increase in cash and cash equivalents                                   (5,411)               371
Cash and cash equivalents, beginning of period                                          9,945             12,910
                                                                                   ===========         ==========
Cash and cash equivalents, end of period                                              $ 4,534            $13,281
                                                                                   ===========         ==========


                                            See notes to consolidated financial statements.

</TABLE>

<PAGE>

                                META Group, Inc.


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 1 - Interim Financial Statements
-------------------------------------

     The accompanying  unaudited interim financial statements have been prepared
in  accordance  with  generally  accepted  accounting   principles  for  interim
financial  information  and  pursuant  to  the  rules  and  regulations  of  the
Securities  and Exchange  Commission  for  reporting on Form 10-Q.  Accordingly,
certain  information and footnote  disclosures  required for complete  financial
statements  are not included  herein.  It is  recommended  that these  financial
statements  be read in  conjunction  with the financial  statements  and related
notes of META Group,  Inc. (the  "Company") as reported on the Company's  Annual
Report on Form 10-K for the year ended  December  31,  1998.  In the  opinion of
management,   all  adjustments  (consisting  of  normal  recurring  adjustments)
considered  necessary for a fair presentation of financial position,  results of
operations  and cash flows at the dates and for the periods  presented have been
included.  Results for interim periods are not necessarily indicative of results
for the entire year.


Note 2 - Income Taxes
---------------------

     During the quarter and nine months ended  September  30, 1999,  the Company
recorded  a tax  provision  of $1.75  million  and $4.1  million,  respectively,
reflecting an effective tax rate of 41%. The total deferred tax asset  decreased
to $1.2 million at September  30, 1999 from $4.6 million at December 31, 1998 as
the Company  utilized its net operating  loss  carryforwards  to offset  taxable
income.  For the nine months ended September 30, 1999, the Company paid $312,500
for state income tax liabilities,  and $400,000 for federal  alternative minimum
tax  liabilities.  The Company  currently  anticipates  utilizing  its remaining
federal net operating loss carryforwards by the first quarter of 2000.


Note 3 - Marketable Securities
------------------------------

     During the nine months ended  September  30, 1999, the Company  liquidated
approximately $22.3 million of its marketable securities on hand at December 31,
1998. Of the $22.3 million,  approximately $17.4 million was used to finance the
Company's stock  repurchase  plan,  approximately  $3.75 million was re-invested
into  short-term  commercial  paper  (classified  as a  cash  equivalent  on the
Company's September 30, 1999 consolidated balance sheet), and approximately $1.2
million  was used for  working  capital  purposes.  Of the $22.3  million,  $1.5
million came from proceeds of securities  called by the issuer,  $7 million from
proceeds of securities that matured, and the remaining proceeds of $13.8 million
were from  securities  sold.  During the quarter and nine months ended September
30,  1999,  the  Company  recognized  $268,400  in  losses  on the  sale  of its
marketable  securities.  These  losses are  reflected  in "Other  income" on the
Company's consolidated statements of income.

     Effective in the quarter ended June 30, 1999, the Company  reclassified its
entire portfolio of marketable securities from held-to-maturity to available for
sale.   Accordingly,   at  September  30,  1999,   such   securities  have  been
marked-to-market,  resulting in an unrealized loss of $311,000,  net of $215,000
of income tax benefits.  The unrealized loss is reflected as "Accumulated  other
comprehensive loss" in Stockholders'  Equity and has no effect on net income for
the three and nine months ended September 30, 1999. See Note 4 for
Comprehensive Income.


Note 4 - Comprehensive Income
-----------------------------
<TABLE>
<CAPTION>
     Comprehensive  income  for  the  three  and  nine  months  ended September 30, 1999 and 1998 was as follows:


                                               Three months ended September 30,        Nine months ended September 30,
                                                   1999                1998                1999                1998
                                                   ----                ----                ----                ----
<S>                                             <C>                 <C>                 <C>                <C>

Net Income                                        $2,454              $2,356              $5,811             $5,971
                                              ---------------    -----------------    ----------------    ---------------
Other comprehensive income, net of tax:
Unrealized loss on marketable securities             (90)               -                   (437)               -
Less: reclassification adjustment for
         losses included in net income                 -                -                    126                -
                                              ---------------    -----------------    ----------------    ---------------
Other comprehensive income:                          (90)               -                   (311)               -
                                              ---------------    -----------------    ----------------    ---------------

Comprehensive Income                              $2,364              $2,356              $5,500              $5,971
                                              ===============    =================    ================    ===============

</TABLE>

Note 5 - Segment Reporting
--------------------------

      The Company operates in three business  segments:  Continuous  Advisory
Services,  Project Consulting and Published Research.  The Company's  reportable
segments are separately  managed  strategic  business  segments.  Each operating
segment  offers   different   products/services,   and  is  sold  via  different
distribution  channels.  In 1998,  the Company  adopted  Statement  of Financial
Accounting  Standards No. 131,  "Disclosures about Segments of an Enterprise and
Related  Information,"  ("SFAS  131.")  Effective  January 1, 1999,  the Company
changed the way it reports revenues on its Consolidated  Statements of Income to
be  consistent  with the  direction of SFAS 131.  Consequently,  the Company now
reports  separately  the  revenues  earned  from  each  of its  three  operating
segments,  which is consistent  with the way the Company manages its operations.
Previously, the Company reported revenues from two sources:  Continuous Services
and Other,  principally consulting and publications.  The revenues for the three
and nine months ended  September 30, 1998 have been  reclassified  to conform to
the 1999  presentation.  SFAS 131  requires  the  Company to  disclose  selected
segment  information  on an interim  basis  consistent  with the way  management
operates its business.  Revenue and operating  income  information for the three
operating segments is set forth below:

<TABLE>
<CAPTION>

                                          Continuous
                                          Advisory      Project       Published     Consolidated
                                          Services     Consulting      Research         Total
                                          --------     ----------      --------         -----
<S>                                        <C>            <C>          <C>             <C>
Three months ended September 30,
1999

Revenues                                  $18,229       $ 5,978         $1,272        $25,479
Operating income (loss)                     2,885         1,473           (245)         4,113

Three months ended September 30,
1998

Revenues                                  $15,244       $ 1,992         $1,218        $18,454
Operating income (loss)                     3,203          (128)           212          3,287



Nine months Ended September 30,
1999

Revenues                                  $50,885       $14,099          $4,711       $69,695
Operating income (loss)                     7,185         1,858            (796)        8,247

Nine Months Ended September 30,
1998

Revenues                                  $42,229       $ 4,773          $ 3,054      $50,056
Operating income (loss)                     7,573           513               55        8,141

</TABLE>

Note 6 - Advances

      In May 1999, the Company advanced $960,000 to Syndicated Research Group
("SRG") in exchange for a  subordinated  convertible  promissory  note. SRG is a
research and advisory firm  dedicated to helping human  resource  professionals
make business decisions that impact staffing, training, and retention issues.

      On March 15,  1999,  the Company  entered  into an agreement to advance
$2.7 million to META Security  Group,  Inc., an  independent  internet  security
start-up consulting firm, in exchange for a secured convertible promissory note.
As of September 30, 1999,  the Company had advanced the $2.7  million,  which is
included in Other Assets on the  consolidated  balance sheet.  On July 13, 1999,
the Company  entered into an agreement  to advance an  additional  $1 million to
META  Security  Group,  Inc.,  in exchange for a secured  promissory  note.
As of September 30, 1999, no advances were made.

Note 7 - Stock Repurchases
--------------------------

       On  April  14,  1999,  the  Company's  Board of  Directors  unanimously
authorized the repurchase of up to 1.2 million shares of its common stock in the
open  market  and in  privately  negotiated  transactions  from  time  to  time,
depending on market  conditions and other  factors.  On May 3, 1999, the Company
announced  the  expansion  of the  repurchase  program to a total of 2.4 million
shares. During the period April 19, 1999 to June 15, 1999, 1,989,993 shares were
repurchased at an average price of $11.28 per share. All shares repurchased have
been retired to the status of authorized but unissued.

       Additionally,  in April 1999, the Company  repurchased  2,389 shares of
its common stock and warrants to purchase  2,449 shares of its common stock from
a minority  stockholder pursuant to the terms of a Settlement  Agreement,  dated
October 31, 1995, between the stockholder and The Sentry Group, Inc. ("Sentry").
Such  repurchase  obligation was assumed by the Company upon the  acquisition of
Sentry in October 1998. The fair market value of the repurchased  securities and
all  associated  costs  were  recovered  from a  purchase  consideration  escrow
established for the satisfaction of indemnification claims pursuant to the terms
of the  Agreement  and Plan of  Merger  between  Sentry  and the  Company.  Such
recovery  by the  Company  was in the form of a release of 15,264  shares of the
Company's  common  stock from the Sentry  purchase  consideration  escrow.  Such
released shares, and the aforementioned  repurchased shares, were retired to the
status of authorized but unissued.

<PAGE>

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

The discussion and analysis below contains trend analysis and other
forward-looking  statements.  Actual results could differ  materially from those
projected in the forward-looking  statements as a result of the risk factors set
forth below under  "Certain  Factors That May Affect Future  Results" and in the
Company's other filings with the Securities and Exchange Commission, principally
the Company's Annual Report on Form 10-K for the year ended December 31, 1998.

Overview

         META Group, Inc.("META Group"), together with its subsidiary, The
Sentry Group, Inc. ("Sentry" and collectively, the "Company"), is an independent
market  assessment  company  providing  research and  analysis of  developments,
trends and organizational  issues relating to the computer  hardware,  software,
communications, and related information technology ("IT") industries to IT users
and vendors. IT user organizations  utilize META Group's research,  analysis and
recommendations  to develop  and employ  cost-effective  and  revenue  enhancing
strategies for selecting and  implementing  timely IT solutions and for aligning
these solutions with business  priorities.  IT vendors use META Group's services
for help in product positioning,  marketing and market planning,  as well as for
internal IT decision making.

        The Company has three operating business segments:  Continuous Advisory
Services,  Project Consulting and Published  Research.  The Continuous  Advisory
Services segment provides annually  renewable  subscription  services focused on
specific areas of IT, IT issues related to a specific  vertical  market,  or the
specific needs of those within the IT organization. Supplementing the Company's
Continuous  Advisory  Services is the  Company's  INfusion  program,  which
builds on the  business-focused  analysis  of  Continuous  Advisory  Services by
offering interactive workshops that provide methodology and skill based training
needed to successfully  manage specific  business-critical  issues.  The Project
Consulting segment provides strategic consulting  engagements servicing clients'
business and technology issues. The Published Research segment provides reports,
studies,  and surveys  offering  in-depth  analysis  of specific  business or IT
issues.

       Continuous Advisory Services revenues constituted approximately 72% and
83% of the Company's  total revenues for the quarters  ended  September 30, 1999
and  1998,  respectively.  Billings  attributable  to the  Company's  Continuous
Advisory  Services  are  initially   recorded  as  deferred  revenues  and  then
recognized pro rata over the contract term.

         Continuous  Advisory  Services  revenues  attributable to international
clients  are  billed  and  collected  by  the  Company's   international   sales
representative   organizations.   The  Company   realizes   revenues   from  the
international  sales  representative  organizations  at  rates  of 40% to 60% of
amounts billed to those clients.

         One measure of the volume of the Company's  business is its  annualized
"Contract Value," which the Company calculates as the aggregate annualized value
of renewable  revenues  recognized from all contracts in effect at a given point
in time,  without  regard to the  remaining  duration of such  contracts.  While
Contract Value is not necessarily indicative of future revenues,  Contract Value
has grown,  sequentially and  year-over-year,  every quarter since the Company's
inception  and  increased  18% to $78.0 million at September 30, 1999 from $65.8
million at September  30, 1998.  At  September  30, 1999,  the Company had 4,500
Continuous  Services  subscribers in  approximately  1,975 client  organizations
worldwide,  as compared to 3,740 subscribers in 1,620 organizations at September
30, 1998.

         The  Company's  operating  expenses  consist  of cost of  services  and
fulfillment,  selling and  marketing  expenses  and  general and  administrative
expenses.  Cost of services and fulfillment represents the costs associated with
production and delivery of the Company's  products and services and includes the
costs of research,  development  and  preparation of periodic  reports,  analyst
telephone   consultations,   executive  briefings  and  conferences,   published
research,  consulting  services,  new product  development,  and all  associated
editorial and support services. Selling and marketing expenses include the costs
of salaries,  commissions and related  benefits for such  personnel,  travel and
promotion.  General and administrative expenses include the costs of the finance
and  accounting  departments,  legal,  human  resources,  corporate IT and other
administrative functions of the Company.



THREE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998

REVENUES  Total revenues increased 38% to $25.5 million in the quarter ended
September 30, 1999 from $18.5 million in the quarter ended September 30, 1998.

Revenues from  Continuous  Advisory  Services,  which generally are derived from
annually renewable  contracts,  payable by clients in advance,  increased 20% to
$18.2 million in the quarter ended  September 30, 1999 from $15.2 million in the
quarter  ended  September  30, 1998.  The increase in revenues  from  Continuous
Advisory  Services was due to incremental revenue  generated from the Company's
new  security  planning and  operations  services,  increased  subscription
revenues as a  result  of the  Company's  expanded  domestic  sales  force  and
increased client subscriber base, increasing revenue from the Company's INfusion
products,  and continued  international  market acceptance  of  the  Company's
Continuous Advisory Services.

Continuous  Advisory  Services  revenues  attributable to international  clients
increased  7% in the quarter  ended  September  30, 1999 from the quarter  ended
September  30,  1998,  and  decreased  as a percentage  of  Continuous  Advisory
Services revenue to 15% from 16%. The increase in Continuous  Advisory  Services
revenue  attributable to international  clients was due principally to increased
demand for the Company's  Continuous  Advisory Services and, to a lesser extent,
an increased demand for the Company's INfusion  products.  The Company currently
has sales representation in 31 countries.

The Company increased  Contract Value 18% to $78.0 million at September 30, 1999
from $65.8 million at September 30, 1998. The Company grew its subscriber client
base 20% to 4,500  Continuous  Service  clients at September 30, 1999 from 3,740
clients at September 30, 1998.

Project Consulting revenues,  which result from strategic consulting engagements
servicing clients' business and technology issues,  increased 200% to $6 million
in the quarter  ended  September  30, 1999 from $2 million in the quarter  ended
September 30, 1998,  and increased as a percentage of total revenues to 23% from
11%. The significant increase was primarily due to incremental revenues from the
acquisition of Sentry in October 1998 coupled with a shift in client demand from
Continuous Advisory Services towards more focused consulting  services,  as well
as, to a lesser extent, new revenues during the quarter ended September 30, 1999
from Packaged Consulting,  which is certain proprietary  methodology of the
Company encapsulated in product form and delivered to the client. The Company's
Project  Consulting  clients typically  consist of Continuous  Advisory Services
clients seeking additional advice tailored to their individual IT requirements.

Published Research revenues, which result from the sale of reports, studies, and
surveys offering in-depth analysis of specific business or IT issues,  increased
4% to $1.3 million in the quarter ended  September 30, 1999 from $1.2 million in
<PAGE>

the quarter  ended  September  30, 1998,  and decreased as a percentage of total
revenues  to 5% from 7%.  The  increase  in  revenues  was  primarily  due to an
increase  in  sales  of  published  research  distributed  under  the  Company's
agreements  with CXP  International,  S.A.  and META CXP LLC (SPEX.)

The Company currently expects Project Consulting revenues to continue to grow at
a faster rate than Continuous  Advisory Services revenues due to the Sentry
acquisition,  the shift in business demand by clients from  Continuous  Advisory
Services towards more focused,  client specific  services,  and the emergence of
Packaged  Consulting.  The Company currently expects Published Research revenues
to  grow  at a  slower  rate  than  Continuous  Advisory  Services  and  Project
Consulting.

Cost of Services and Fulfillment Cost of services and fulfillment  increased 53%
to $13.3  million in the quarter  ended  September 30, 1999 from $8.7 million in
the quarter ended September 30, 1998 due to the Sentry acquisition,  fulfillment
expenses associated with new security planning and operations services revenues,
and increased staffing costs (which primarily consist of compensation,  and to a
lesser  extent,  travel)  for  analyst,  consultant  and  fulfillment  positions
necessary to support the Company's growth both domestically and internationally.
Additionally,  royalty  payments  to third  parties  with whom the  Company  has
distribution  agreements  increased  as a  result  of  increased  sales  of  the
underlying services.

Cost of services and fulfillment  increased as a percentage of total revenues to
52% from 47% in the quarter  ended  September  30,  1999 due to the  increase in
analyst  and  consultant  headcount  that  occurred in the first half of 1999 in
order to support the Company's growth both domestically and internationally, and
to support the  development of new product  offerings to meet changing  customer
demands.  The Company anticipates  continuing increases in the costs of services
and fulfillment,  and it expects that such expenses will increase  slightly as a
percentage of total revenues.

Selling and Marketing  Expenses Selling and marketing  expenses increased 26% to
$5.4 million in the quarter  ended  September  30, 1999 from $4.3 million in the
quarter ended September 30, 1998 and decreased as a percentage of total revenues
to 21% from 23%. The increase in Selling and Marketing  expenses was principally
due to increased  compensation and travel expenses  associated with the expanded
domestic  Direct Sales force and Inside Sales channel  (which is a team of sales
professionals  that sell the  Company's  published  research  by  telephone)  to
support the increasing scope of the Company's  product  offerings.  In addition,
the  Company  incurred  greater  marketing   expenses,   both  domestically  and
internationally,  in connection  with the Company's  revenue  growth.  While the
Company anticipates  continuing increases in the amount of selling and marketing
expenses, it expects that such expenses, as a percentage of total revenues, will
decrease slightly.

General  and  Administrative   Expenses  General  and  administrative   expenses
increased 14% to $2.0 million in the quarter ended  September 30, 1999 from $1.8
million in the quarter ended  September 30, 1998,  and decreased as a percentage
of total revenues to 8% from 10%. The increase in expenses was  principally  due
to  increased  payroll  and  benefits  costs  associated  with  an  increase  in
administrative  personnel, and increased facility costs due to the assumption of
additional lease space throughout the Company's domestic locations  necessary to
support the Company's growth. The Company anticipates  continuing increases over
the prior year in the amount of general and administrative  expenses and expects
such  expenses  to  remain  approximately  the  same as a  percentage  of  total
revenues.

Depreciation and Amortization  Depreciation and amortization  expense  increased
49% to $683,000 in the quarter  ended  September  30, 1999 from  $458,000 in the
quarter ended September 30, 1998. The increase in depreciation  and amortization
expense  was  principally  due to  purchases  of computer  equipment,  leasehold
improvements,  and office furniture  required to support business growth and the
amortization  of goodwill  from the Sentry  acquisition  consummated  in October
1998.

OTHER  INCOME  Other  income  decreased  86% to  $93,000  in the  quarter  ended
September 30, 1999 from $681,000 in the quarter  ended  September 30, 1998.  The
decrease was due to $268,400 in losses  recognized  on the sale of the Company's
marketable  securities,  and a reduction in interest  income  during the quarter
ended  September  30, 1999 due to the  decreased  levels of cash and  marketable
securities on hand in 1999 versus 1998, which cash and proceeds were used
primarily to finance the Company's stock repurchases (see Note 7).

PROVISION  FOR INCOME  TAXES  Provision  for income  taxes of $1.75  million was
recorded for the quarter ended September 30, 1999, as compared to a provision of
$1.6 million  recorded for the quarter ended  September 30, 1998,  reflecting an
effective  tax rate of 41%.  The  total  deferred  tax asset  decreased  to $1.2
million at  September  30, 1999 from $4.6  million at  December  31, 1998 as the
Company utilized its net operating loss  carryforwards to offset taxable income.
The Company currently  anticipates utilizing its remaining federal net operating
loss carryforwards by the first quarter of 2000.



NINE MONTHS ENDED SEPTEMBER 30, 1999 AND 1998

REVENUES  Total revenues increased 39% to $69.7 million in the nine months ended
September 30, 1999 from $50.1 million in the nine months ended September 30,
1998.

Revenues from Continuous Advisory Services increased 21% to $50.9 million in the
nine months ended September 30, 1999 from $42.2 million in the nine months ended
September 30, 1998. The increases in revenues from Continuous  Advisory Services
were  primarily  due to the  expansion  of the  Company's  domestic  sales force
resulting in an increased client subscriber base, growing  international  market
acceptance of the Company's Continuous Advisory Services revenues, the emergence
of the Company's security planning and operations services,  increasing revenues
from the introduction of the Company's  INfusion  products in the fourth quarter
of 1998, and an increase in analyst  briefings to existing  clients.  Continuous
Advisory Services revenue growth, however, was lower than expected, primarily as
a result of a shift in client  demand  toward  consulting  services.  Continuous
Advisory Services revenues  attributable to international  clients increased 26%
in the nine months ended September 30, 1999 from the nine months ended September
30, 1998, and increased as a percentage of Continuous Advisory Services revenues
to 16% from 15%.

Project  Consulting  revenues increased 195% to $14.1 million in the nine months
ended  September  30, 1999 from $4.8 million in the nine months ended  September
30, 1998,  and increased as a percentage of total  revenues to 20% from 10%. The
increase was principally due to the incremental revenues from the acquisition of
Sentry in October  1998 coupled  with a shift in client  demand from  Continuous
Advisory Services towards more focused consulting  services.  Additionally,  the
Company recognized new revenues from the launch of Packaged  Consulting in 1999.
Project Consulting revenues, however, were partially offset in the first quarter
of 1999 by  unexpected  transitional  issues  with  respect  to the  integration
commenced in the first quarter 1999 in connection with the Sentry acquisition.

Published  Research  revenues  increased  54% to $4.7 million in the nine months
ended  September  30, 1999 from $3.1 million in the nine months ended  September
30, 1998,  and  increased as a percentage  of total  revenues to 7% from 6%. The
increase  was  primarily  due to an  increase  in  sales of  published  research
distributed under the Company's agreements with CXP International, S.A. and META
CXP LLC (SPEX) and Rubin Systems,  Inc., and the introduction of new products in
1999.  The increase was  partially  offset by  publishing  delays in the quarter
ended March 31, 1999 with respect to certain publications sold by the Company.

Cost of Services and Fulfillment Cost of services and fulfillment  increased 56%
to $37.5 million in the nine months ended  September 30, 1999 from $24.1 million
<PAGE>
in the nine months ended  September  30, 1998,  and increased as a percentage of
total revenues to 54% from 48%. The increase was  principally  due to the Sentry
acquisition,  and increased  staffing for analyst,  consultant  and  fulfillment
positions  necessary  to support  the  Company's  growth both  domestically  and
internationally. The principal areas of cost increases were compensation, and to
a lesser extent, travel. Additionally, the Company incurred fulfillment expenses
associated with the emergence of the Company's  security planning and operations
services,  and  royalty  payments  to third  parties  with whom the  Company has
distribution  agreements  increased  as a  result  of  increased  sales  of  the
underlying services.

Selling and Marketing  Expenses Selling and marketing  expenses increased 38% to
$16.2 million in the nine months ended  September 30, 1999 from $11.8 million in
the nine months ended September 30, 1998 and remained  approximately the same as
a percentage  of total  revenues at 24%.  The increase in Selling and  Marketing
expenses was  principally  due to  increased  compensation  and travel  expenses
associated  with the  expanded  domestic  Direct  Sales  force and Inside  Sales
channel to support the increasing scope of its product  offerings.  In addition,
the  Company  incurred  greater  marketing   expenses,   both  domestically  and
internationally,  in  connection  with  the  growth  of the  Company's  existing
services, as well as the launch of its new services.

General  and  Administrative   Expenses  General  and  administrative   expenses
increased  25% to $5.9 million in the nine months ended  September 30, 1999 from
$4.7  million in the nine months  ended  September  30, 1998 and  decreased as a
percentage  of total  revenues to 8.5% from 9.5%. The increase in  expenses was
principally  due to increased  payroll and  benefits  costs  associated  with an
increase in administrative  personnel,  and increased  facility costs due to the
assumption of additional lease space throughout the Company's domestic locations
necessary to support the Company's growth.

Depreciation and Amortization  Depreciation and amortization  expense  increased
43% to $1.9  million  in the nine  months  ended  September  30,  1999 from $1.4
million  in  the  nine  months  ended   September  30,  1998.  The  increase  in
depreciation  and  amortization  expense was  principally  due to  purchases  of
computer  equipment and office furniture required to support business growth and
the amortization of goodwill from the Sentry acquisition  consummated in October
1998.

OTHER INCOME Other income decreased 16% to $1.7 million in the nine months ended
September  30, 1999 from $2.0  million in the nine months  ended  September  30,
1998. The decrease was principally  due to $268,400 of losses  recognized on the
sale of the Company's marketable securities,  and a reduction in interest income
during the nine months ended  September 30, 1999 due to the decreased  levels of
cash and marketable  securities on hand in 1999 versus 1998, which cash and
proceeds were used  primarily to finance the Company's  stock  repurchases (see
Note 7). However, the decreases were partially offset by increases in interest
income from debt financings of investee companies.

PROVISION  FOR INCOME TAXES  Provision for income taxes of $4.1 million was
recorded for the nine months ended  September 30, 1999 and 1998, reflecting an
effective tax rate of 41%.

LIQUIDITY AND CAPITAL RESOURCES

         The  Company's  principal  source of liquidity  is cash from  operating
activities  which  consists  of  net  income  adjusted  for  non-cash  operating
activities and changes in current assets and liabilities.  The Company generated
$1.5  million of cash from  operating  activities  during the nine months  ended
September  30, 1999,  compared to $7.5  million in the same period of 1998.  The
decrease in cash  generated from operating  activities  was  principally  due to
decreased  cash  collections  on  outstanding  accounts  receivable,   increased
employee  bonuses  paid in 1999 versus  1998,  and an increase in other  current
assets  as a  result  of  increases  in  short-term  advances  made to  investee
companies and prepaid income taxes.  Such decreases were partially  offset by an
increase in deferred  revenues at  September  30, 1999 versus the same period in
1998.

<PAGE>

         The  Company  used  $4.1  million  of cash  in the  nine  months  ended
September 30, 1999, compared to $2.3 million in the same period of 1998, for the
purchase of furniture,  equipment, computers and related software for use by the
Company's employees.  The increase is due primarily to greater headcount and the
implementation of a systems upgrade program discussed below. The Company expects
that  additional  purchases of equipment will be made as the Company's  employee
base  continues to grow. As of September  30, 1999,  the Company had no material
commitments  for  capital  expenditures.  The  Company,  however,  is  currently
upgrading significant internal systems, including its client information system,
and accounting system, to support business growth. The total cash outlay for the
completion of the project in 1999 (excluding  internal resources) is expected to
be less than $1 million.

         On  April  14,  1999,  the  Company's  Board of  Directors  unanimously
authorized the repurchase of up to 1.2 million shares of its common stock in the
open  market  and in  privately  negotiated  transactions  from  time  to  time,
depending on market  conditions and other  factors.  On May 3, 1999, the Company
announced  the  expansion  of the  repurchase  program to a total of 2.4 million
shares. During the period April 19, 1999 to June 15, 1999, 1,989,993 shares were
repurchased at an average price of $11.28 per share. All shares repurchased have
been retired to the status of authorized but unissued.  The Company financed all
repurchases with its cash and marketable securities balances.

         On November 4, 1999, the Company invested $1 million Ninth House, Inc.,
in exchange  for shares of Series B Preferred  Stock.  Ninth  House,  Inc. is an
innovative provider of interactive, online learning products, utilizing both the
Internet and corporate  intranets.  The investment was funded from the Company's
cash balances.

         In May 1999, the Company advanced $960,000 to Syndicated Research Group
("SRG") in exchange for a  subordinated  convertible  promissory  note. SRG is a
research and advisory  firm  dedicated to helping human  resource  professionals
make business decisions that impact staffing, training, and retention issues .

         On March 15,  1999,  the Company  entered  into an agreement to advance
$2.7 million to META Security  Group,  Inc., an  independent  internet  security
start-up consulting firm, in exchange for a secured convertible promissory note.
As of September 30, 1999,  the Company had advanced the $2.7  million,  which is
included in Other Assets on the  consolidated  balance sheet.  On July 13, 1999,
the Company  entered into an agreement  to advance an  additional $1 million to
META  Security  Group,  Inc.,  in exchange for a secured  promissory  note. As
of September 30, 1999, no advances were made.

         Under the terms of the Agreement and Plan of Merger  between Sentry and
the Company  consummated in October 1998, the former Sentry  shareholders may be
entitled to consideration of up to $7.0 million,  payable in common stock or (at
the  Company's  option) cash in the event certain  financial  targets are met by
Sentry in 1999. The amount of consideration, if any, will be determined and paid
in the first quarter of 2000.

         The  Company  regularly  invests  excess  funds  in   investment-grade,
short-term commercial paper, debt instruments,  and money market funds. As these
investments  generally  have terms of less than three months,  they are included
under the caption "Cash and cash equivalents" in the balance sheets.

         In addition, the Company invests in longer term, callable, higher-yield
marketable  debt  securities.  Generally,  these  securities  are  U.S.  federal
government  agency  issues,  purchased  in  denominations  of $1  million  to $7
million.

<PAGE>

         As of September 30, 1999, the Company had cash and cash  equivalents of
$4.5 million,  marketable  securities  of $13.7  million and working  capital of
$20.5 million.  The decrease in these assets from December 31, 1998 is primarily
attributable  to the share  repurchase  program  discussed  above.  The  Company
believes that existing cash balances,  credit  facilities,  and anticipated cash
flows from operations will be sufficient to meet its working capital,  strategic
investments, and capital expenditure requirements for the foreseeable future.

Year 2000 Readiness Disclosure

The following disclosure may be deemed "Year 2000 Readiness Disclosure" pursuant
to the Year 2000  Information  and  Readiness Disclosure Act.

State of Readiness
------------------

The Company has completed its  identification and assessment program on the Year
2000  compliance  status of both the IT and non-IT  software and systems used in
its internal  business  processes.  We have obtained  appropriate  assurances of
compliance  from the  manufacturers  of these  products,  and are  modifying  or
replacing all non-compliant products.

The Company  made  inquiries  with its third  party  providers  of  intermediary
products  or  services  to  determine  the  impact of Year 2000  issues on their
business and operations, and the resulting impact on the business and operations
of the Company.  These systems  relate to the ability of the Company to transmit
its products to its customers via the internet, CD-ROM, and Lotus Notes, and are
reliant on the  compliance  of the third  parties in order to operate past 1999.
The Company has been advised by the applicable  third parties that the necessary
modifications for the Year 2000 issue have been completed.  The Company believes
that its internal  systems are Year 2000 compliant to interface with such third
parties. While the Company has received such third party  assurances  and
believes such systems are compliant, the Company can offer no assurance that its
systems, to the extent they are reliant on third party systems,  will in fact be
operational on January 1, 2000.

The Company has contacted its  suppliers of its business  critical  software and
systems to determine  whether the products obtained by the Company are Year 2000
compliant and has reviewed other areas within its business and operations  which
could be adversely  affected by Year 2000  issues.  Based on the  responses  the
Company has received from  manufacturers and the internal  evaluation  performed
through October 1999, the Company believes that all servers,  workstations,  and
network infrastructure are Year 2000 compliant.

Among the systems reviewed  were the  Company's  operating  system,  telephone
system,   client  information  system,  and  accounting  system.  The  Company's
operating  system (which  serves as the  platform  from  which  our  front-end
applications  reside) was  upgraded  during  1999,  and the Company has obtained
representations  from the  applicable  vendors  that the  systems  are Year 2000
compliant.  The Company's telephone system, which is critical to the function of
the business,  was replaced  during the third  quarter of 1999.  The Company has
obtained  representations  from the vendor that the new telephone system is Year
2000 compliant.  Also, in response to an increase in clients and employees, and
the need for improved  information  management for customer service, the Company
implemented  a new client  information  system during the first half of 1999. In
selecting the new client information system, Year 2000 compliance was one of the
criteria reviewed, and the Company has obtained a representation from the vendor
that the system is Year 2000  compliant.  Due to the large amount of information
contained in the old client  information  system,  not all  information  will be
transferred to the new system by the end of 1999. Accordingly, the Company still
uses the existing system for non-critical  functions.  The Company has completed
the necessary  upgrades and obtained  representations  from the vendor to ensure
the  existing  system is Year 2000  compliant.  The Company has  purchased a new
accounting  software  package  that is better  suited to support  the  Company's
<PAGE>
growth and is Year 2000 compliant.  The implementation  is scheduled to be
complete  by December  1, 1999;  however,  in the event the Company is unable to
replace the existing  accounting  software prior to the end of 1999, the Company
has   completed   the  upgrade  of  the   existing   system  and  has   obtained
representations from the vendor that the existing system is Year 2000 compliant.

The  Company  has not  identified  any  internal  non-IT  systems  that are both
critical to the business and would cause  significant  disruption of business in
the event of failure in the year 2000.  The Company has not contacted all of its
non-business  critical  vendors (e.g.,  office supply  vendors) to determine the
level of compliance of these third parties.  The Company believes, however,
that non-compliance on the part of these third parties would not have a material
adverse effect on the business or operations of the Company.

Costs to Address Year 2000 Issues
---------------------------------

Based on the Company's internal evaluation  performed to date on potential costs
for completing  the  evaluating,  testing,  modifying or replacing of any of its
internal  IT or non-IT  software or systems,  the Company  currently  expects to
spend  approximately  $3.0 million (including an estimated $2.9 million of costs
for replacing the client  information  system,  telephone system, and accounting
system),  of which  the  Company  has spent  approximately  $2.1  million  as of
September 30, 1999.  The Company will fund all Year 2000  compliance  costs from
existing working capital.

The  potential  costs  associated  with  failure of the  internet or other major
systems  outside the Company's  control  (i.e.,  utilities,  telephone  service,
etc.), or of any significant non-IT systems,  including increased costs of doing
business, inability to conduct business, potential loss of customers, and impact
of certain risk areas as discussed below, are unknown and cannot be estimated by
the Company.

Risks Associated with Year 2000 Issue
-------------------------------------

The primary  risk to the Company in the event of  non-compliance  with Year 2000
issues is a disruption of customer fulfillment.  As a significant portion of the
Company's clients choose to receive the Company's  written  deliverables via the
internet,  failure of that system could  prevent  customers  from  accessing the
Company's  written  deliverables  via the  Company's  internet  site.  Likewise,
failure of the  telephone  systems  would prevent the Company from speaking with
its customers  directly,  which is an integral part of the Company's service and
products.  Also,  failure  of the  client  information  system  would  result in
potential delays in responding to customers' inquiries.

In  addition  to the risks to the  Company's  systems as they relate to customer
service,  and  discussed  above,  the Year 2000  Issue  presents  the  following
business risks to the Company:

o     Because the Company's  business  results from selling  knowledge  based
      research  on a wide  variety  of IT issues,  the short term  demand for
      certain of the Company's  products could  potentially be hindered while
      customers and potential  customers focus immediate  resources on fixing
      their own Year 2000 issues. The Company, however,  currently feels that
      the risk of a shift in the focus of customers' and potential customers'
      discretionary  IT spending will not have a material  adverse  effect on
      the Company's business, operating results and financial condition.

   o  Part  of the  Company's  services  to its  customers  involves  forming
      opinions and making  suggestions  with  regards to IT issues.  As such,
      customers  rely on the  Company  for  advice  when  making  IT  related
      decisions,  which may involve Year 2000 issues.  Because of the overall
      risk of litigation  associated with the Year 2000 issue, there exists a
      risk that the  Company  could face legal  action  from a customer or be
      named  as a  co-defendant  in an  action  by a third  party  against  a
      customer.  The likelihood of such action  occurring,  and the potential
      related costs, cannot be estimated by the Company at this time.

   o  Failure of certain  systems of third parties due to Year 2000 issues
      could potentially  create  the  risk  of  impairment  of  certain  assets
      of the Company. In particular,  as of September 30, 1999, the Company had
      over $13 million in marketable securities, which are invested in
      unsecured,  short-term investment grade, corporate debt instruments
      (commercial paper), and long-term U.S. federal government agency issues.
      Financial  impairment to certain  investees, or a collapse of the
      securities markets in general, would potentially have a material adverse
      effect on the Company's financial position. In addition, as of
      September 30, 1999, the Company had over $39 million in accounts
      receivable from customers and international sales representative
      organizations,  as well as significant investments in other companies.
      Financial impairment to certain of such  companies due to Year 2000 issues
      could  potentially  have a  material  adverse  effect  on the
      Company's financial position and results of operations. The likelihood of
      such action occurring, and the potential related costs, cannot be
      estimated by the Company at this time.

 Contingency Plans
 -----------------

The Company  has the  following  contingency  plans in place in order to protect
customer service in the event of Year 2000 disruptions:

   o The  Company's  research is  available  in written  form as well as via the
     internet,  CD-ROM, and Lotus Notes. In the event of disruption of the other
     forms of delivery, the Company will deliver research in printed form to all
     customers.  The Company has obtained  representations from its printers and
     mail  services  that  their  internal  systems  necessary  to  deliver  the
     Company's  research are Year 2000 compliant.  The incremental cost of doing
     so would not be material to the results of  operations  and is currently an
     option many customers continue to use.

The Company does not currently have a contingency  plan in place with regards to
the risk of asset  impairment  described above but will be reviewing  investment
risk to include Year 2000 exposure as the year 2000 approaches.


Certain Factors That May Affect Future Results

The Company does not provide  forecasts of the future  financial  performance of
the Company.  However, from time to time, information provided by the Company or
statements  made by its  employees  may  contain  "forward-looking"  information
involving risks and uncertainties.  In particular,  statements contained in this
Form  10-Q  that  are not  historical  facts  (including,  but not  limited  to,
statements  concerning the revenue growth rate in its three  operating  segments
and in international  revenues,  anticipated  costs of services and fulfillment,
selling and marketing  and operation  expense  levels,  cost and expense  levels
relative to the Company's total revenues and  anticipated  mix of revenues,  the
ability of the Company's  computer systems and applications to function properly
beyond 1999,  planned capital  expenditures,  the Company's  working capital and
capital  expenditure   requirements,   and  net  operating  loss  carryforwards)
constitute  forward-looking  statements  and are  made  under  the  safe  harbor
provisions  of  the  Private  Securities  Litigation  Reform  Act of  1995.  The
Company's  actual results of operations and financial  condition have varied and
may in the future vary  significantly  from those stated in any  forward-looking
statements. Factors that may cause such differences include, without limitation,
the risks, uncertainties,  and other information discussed below, as well as the
accuracy of the Company's  internal  estimates of revenue and operation  expense
levels.  Each of these factors,  and others,  are discussed from time to time in
the filings made by the Company with the Securities and Exchange Commission.

The Company's  future  operating  results are subject to  substantial  risks and
uncertainties.   The  Company  currently  derives  most  of  its  revenues  from
<PAGE>

subscriptions to its Continuous  Advisory Services.  As a result, any decline in
the  Company's  ability  to secure  subscription  renewals  may have a  material
adverse effect on the Company's results of operations.  The Company's ability to
secure subscription renewals, at favorable average selling prices, as well as to
successfully  market and sell its  Project  Consulting  services  and  Published
Research,  is  dependent  upon the  Company's  ability  to  deliver  consistent,
high-quality,   and  timely   analysis   and  advice  with  respect  to  issues,
developments,   and  trends  that  clients  view  as  important.  The  Company's
successful delivery of such analysis and advice is, in turn, dependent upon many
factors,   including,  among  other  things,  its  ability  to:  understand  and
anticipate  rapidly  changing  technologies  and market trends so as to keep its
analysis  focused on the  changing  needs of its clients,  deliver  products and
services of  sufficiently  high quality and timeliness to withstand  competition
from competitors that may have greater  financial,  information  gathering,  and
marketing  resources  than the Company,  and recruit and retain highly  talented
professionals  in a  competitive  job market.  The loss of any of the  Company's
senior management personnel,  including Dale Kutnick (President, Chief Executive
Officer and Co-Research  Director),  could have a material adverse affect on the
Company.  The  Company's  ability to market and sell its  products  and services
could also be adversely affected by the emergence of new competitors into one or
more of the market  segments  addressed by the Company's  products and services,
which could cause  pricing  pressure  and loss of market  share.  The  Company's
pricing  strategy may limit the potential  market for the  Company's  Continuous
Advisory Services. As a result, the Company may be required to reduce prices for
its Continuous  Advisory Services or introduce new products with lower prices in
order to expand or maintain its market share. In addition, a significant portion
of the Company's revenues are attributable to international  clients,  which may
be  adversely  affected by factors  including  difficulties  in  developing  and
managing  relationships  with  independent  international  sales  representative
organizations,  reliance on sales  entities  that the Company  does not control,
greater  difficulty  in  maintaining  direct  client  contact,  fluctuations  in
exchange rates,  adverse  political and economic  conditions,  tariffs and other
trade barriers,  longer accounts  receivable  collection cycles, and adverse tax
consequences.  The Company's future financial results also depend in part on the
development  or  acquisition  of  new  products  and  services,  which  may  not
successfully  be achieved due to the inherent  costs and risks  associated  with
development, assimilation, and marketing of a new product or service, as well as
the Company's limited experience in introducing new products and services.

Furthermore,   the   Company's   quarterly   operating   results  may  fluctuate
significantly due to various factors. Because a disproportionately large portion
of the Company's  Continuous  Advisory  Services  contracts expire in the fourth
quarter  of each year,  the  Company  incurs  operating  expenses  in the fourth
quarter at a higher  level than would  otherwise  be required by its  sequential
growth,  and such  increased  expenses are not normally  offset  immediately  by
higher revenues. In addition, the Company's operating results may fluctuate as a
result of a variety of other factors, including the level and timing of renewals
of  subscriptions  to  Continuous  Advisory  Services,  the level and  timing of
contracted  Project  Consulting  Services,  the timing  and  amount of  business
generated by the Company, the mix of domestic versus international business, the
timing of the  development,  introduction,  and  marketing  of new  products and
services,  the  integration  of acquired  businesses  into the operations of the
Company (particularly the Sentry acquisition), the timing of the acquisition and
integration into the Company of new business,  products, and services (including
without limitation,  INfusion products and Packaged  Consulting),  the timing of
the delivery of published research sold by the Company, the timing of the hiring
of research  analysts and consultants,  changes in the spending  patterns of the
Company's  target  clients,   the  Company's  accounts   receivable   collection
experience,  changes in market demand for IT research and analysis,  competitive
conditions in the industry, the timing of the sale of marketable securities held
by the Company and any losses therefrom and the timing of capital  contributions
or loans to  strategic  investees  of the  Company.  Due to these  factors,  the
Company believes  period-to-period  comparisons of results of operations are not
necessarily  meaningful and should not be relied upon as an indication of future
results of operations.  The potential  fluctuations  in the Company's  operating
results make it likely that, in some future  quarter,  the  Company's  operating
results will be below the  expectations  of securities  analysts and  investors,
which would have a material  adverse effect on the price of the Company's Common
Stock.

<PAGE>

Item 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     Reference  should be made to the  Company's  annual report on Form 10-K for
the year ended December 31, 1998 for quantitative and qualitative  disclosure of
the  Company's  market risk.  There have been no material  changes to the market
risk  information  included in the Company's  annual report on Form 10-K for the
year ended December 31, 1998.


PART II - OTHER INFORMATION

Item 1.  Legal Proceedings.
         ------------------

         As disclosed in the  Company's  Annual Report on Form 10-K for the year
ended  December 31, 1998,  the Company is a party to certain  legal  proceedings
arising in the ordinary course of business. The Company,  however, believes that
none of these  proceedings  is likely to have a material  adverse  effect on the
Company's business, results of operations or financial condition.


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

         (a)      Exhibits.
                  --------
         Exhibit
         Number             Description
         ------             -----------
            11.1            Statement re-computation of per-share earnings
            27.1            Financial Data Schedule

         (b)      Reports on Form 8-K.

         None

<PAGE>

                                    SIGNATURE


Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused  this report to be signed on its behalf by the
undersigned thereunto duly authorized.



                                      META Group, Inc.




Date: November 15, 1999             By:/s/ Bernard F. Denoyer
                                    ------------------------------------------
                                    Bernard F. Denoyer
                                    Senior Vice President, Finance, Chief
                                    Financial Officer, Secretary and Treasurer
                                    (Principal Financial and Accounting Officer)




<PAGE>


                                  EXHIBIT INDEX






                                                                   Sequentially
Exhibit                                                              Numbered
Number                          Description                            Page
-------------     ---------------------------------------------    -----------


  11.1            Statement re computation of per-share earnings        22
  27.1            Financial Data Schedule                                *


* Exhibit included in EDGAR filing with Securities and Exchange Commission.

  ------------------



<PAGE>


   EXHIBIT 11.1


<TABLE>
<CAPTION>

                                META Group, Inc.

                    EXHIBIT TO QUARTERLY REPORT ON FORM 10-Q

                   Computation of Net Income Per Common Share





                                                                Three months ended                   Nine months ended
                                                                   September 30,                       September 30,
-----------------------------------------------------------------------------------------------------------------------------
                                                              1999             1998                1999             1998
                                                           ---------------------------        -------------------------------
<S>                                                       <C>              <C>                <C>               <C>

Net                                                        $2,454,000       $2,356,000         $5,811,000        $5,971,000
                                                           ==========       ==========         ==========        ==========
Net income..........................................

Weighted average number of common and common
 equivalent shares outstanding:

      Common shares
        outstanding during the period...............       10,094,507       11,350,373         10,918,872        11,254,253

      Common share equivalents - options
        to purchase common shares...................          712,355        1,366,794            789,602         1,285,117
                                                           ----------       ----------        -----------        ----------
               Total                                       10,806,862       12,717,167         11,708,474        12,539,370
                                                           ==========       ==========         ==========        ==========

Net income per diluted common share...................        $.23              $.19              $.50               $.48
                                                              ====              ====              ====               ====

Net income per basic common share.................            $.24              $.21              $.53               $.53
                                                              ====              ====              ====               ====
</TABLE>