================================================================================
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 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 Quarter Ended September 30, 1998

                                       or

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

                         Commission File Number 0-28252


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


          Delaware                                             94-3184303
(State or other jurisdiction of                              (I.R.S. Employer
incorporation or organization)                            Identification Number)


 585 Broadway, Redwood City, California                           94063
(Address of principal executive offices)                        (Zip code)


                                 (650) 261-5100
              (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 ___

     As of October 31,  1998 there were  24,566,393  shares of the  Registrant's
Common Stock issued and outstanding.

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<PAGE>


                       BROADVISION, INC. AND SUBSIDIARIES

                                    FORM 10-Q
                        QUARTER ENDED SEPTEMBER 30, 1998

                                TABLE OF CONTENTS


                                                                        Page No.
                                                                        --------

PART I   FINANCIAL INFORMATION

Item 1.  Financial Statements


            Consolidated Balance Sheets -
              September 30, 1998 and December 31, 1997                      3
            Consolidated Statements of Operations -
              Three and nine months ended September 30, 1998 and 1997       4
            Consolidated Statements of Cash Flows -
              Nine months ended September 30, 1998 and 1997                 5

            Notes to Consolidated Financial Statements                      6

Item 2.  Management's Discussion and Analysis of
           Financial Condition and Results of Operations                   10

Item 3.  Quantitative and Qualitative Disclosures About Market Risk        17



PART II  OTHER INFORMATION

Item 1.  Legal Proceedings                                                 18

Item 2.  Changes in Securities and Use of Proceeds                         18

Item 3.  Defaults upon Senior Securities                                   18

Item 4.  Submission of Matters to a Vote of Security Holders               18

Item 5.  Other Information                                                 18

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

SIGNATURES                                                                 18

                                       2

<PAGE>


<TABLE>
                                                    PART I. FINANCIAL INFORMATION

ITEM 1.        FINANCIAL STATEMENTS 


                                                 BROADVISION, INC. AND SUBSIDIARIES
                                                     CONSOLIDATED BALANCE SHEETS
                                                (In thousands, except per share data)

<CAPTION>
                                                                                                    September 30,       December 31,
                                                                                                         1998                1997
                                                                                                       --------            --------
<S>                                                                                                    <C>                 <C>     
ASSETS

   Cash and cash equivalents                                                                           $ 61,914            $  8,277
   Restricted cash                                                                                         --                 1,400
   Short-term investments, restricted                                                                      --                   796
   Accounts receivable, less allowance for doubtful accounts and returns
     of $628 and $671, for 1998 and 1997, respectively                                                   11,625               9,586
   Prepaids and other                                                                                     1,876                 566
                                                                                                       --------            --------
         Total current assets                                                                            75,415              20,625

   Property and equipment, net                                                                            7,572               6,467
   Long-term investments, at cost                                                                         5,525                --
   Prepaids and other                                                                                     1,161                 250
                                                                                                       --------            --------
         Total assets                                                                                  $ 89,673            $ 27,342
                                                                                                       ========            ========

LIABILITIES AND STOCKHOLDERS' EQUITY

   Accounts payable                                                                                    $  1,812            $  1,863
   Accrued expenses                                                                                       3,237               2,168
   Unearned revenue                                                                                       2,182               1,335
   Deferred maintenance                                                                                   4,300               2,552
   Current portion of capital lease obligations                                                             844                 773
   Current portion of long-term debt                                                                        548                 449
                                                                                                       --------            --------
         Total current liabilities                                                                       12,923               9,140

   Capital lease obligations                                                                                346                 803
   Long-term debt                                                                                         3,061               2,202
   Other                                                                                                     58                  76
                                                                                                       --------            --------
         Total liabilities                                                                               16,388              12,221

   Commitments

   Stockholders' equity:
   Convertible preferred stock, $0.0001 par value; 5,000 shares
    authorized; none issued and outstanding                                                                --                  --
   Common stock, $0.0001 par value; 50,000 shares authorized; 24,334 and
    20,343 shares issued and outstanding for 1998 and 1997, respectively
                                                                                                              2                   2
   Additional paid-in capital                                                                            95,620              40,366
   Deferred compensation                                                                                   (643)             (1,605)
   Accumulated deficit                                                                                  (21,694)            (23,642)
                                                                                                       --------            --------
         Total stockholders' equity                                                                      73,285              15,121
                                                                                                       --------            --------
         Total liabilities and stockholders' equity                                                    $ 89,673            $ 27,342
                                                                                                       ========            ========

<FN>
                                     See Accompanying Notes to Consolidated Financial Statements
</FN>
</TABLE>

                                                                 3

<PAGE>


<TABLE>
                                                 BROADVISION, INC. AND SUBSIDIARIES
                                                CONSOLIDATED STATEMENTS OF OPERATIONS
                                              (In thousands, except per share amounts)

<CAPTION>
                                                                      Three Months Ended                    Nine Months Ended
                                                                         September 30,                         September 30,
                                                                    1998               1997               1998               1997
                                                                  --------           --------           --------           --------
<S>                                                               <C>                <C>                <C>                <C>     
Revenues:
   Software licenses                                              $  9,158           $  5,513           $ 24,455           $ 12,759
   Services                                                          4,273              1,641             10,439              5,713
                                                                  --------           --------           --------           --------
       Total revenues                                               13,431              7,154             34,894             18,472

Cost of revenues:
    Cost of software licenses                                          237                460                637              1,099
    Cost of services                                                 2,553              1,010              6,264              3,154
                                                                  --------           --------           --------           --------
       Total cost of revenues                                        2,790              1,470              6,901              4,253
                                                                  --------           --------           --------           --------
          Gross profit                                              10,641              5,684             27,993             14,219

Operating expenses:
    Research and development                                         2,394              2,113              6,476              5,595
    Sales and marketing                                              6,285              4,630             18,389             13,091
    General and administrative                                         977                763              2,562              2,209
                                                                  --------           --------           --------           --------
       Total operating expenses                                      9,656              7,506             27,427             20,895
                                                                  --------           --------           --------           --------
          Operating income (loss)                                      985             (1,822)               566             (6,676)

    Interest and other income                                          837                133              1,751                541
    Interest and other expense                                         (68)                (2)              (369)              (152)
                                                                  --------           --------           --------           --------
          Net income (loss)                                       $  1,754           $ (1,691)          $  1,948           $ (6,287)
                                                                  ========           ========           ========           ========

Basic and diluted
  earnings (loss) per share                                       $   0.07           $  (0.08)          $   0.08           $  (0.31)
                                                                  ========           ========           ========           ========

Shares used in computing
   basic earnings (loss) per share                                  24,264             20,284             22,924             20,169
                                                                  ========           ========           ========           ========
Shares used in computing
   diluted earnings (loss) per share                                26,722             20,284             25,214             20,169
                                                                  ========           ========           ========           ========

<FN>
                                     See Accompanying Notes to Consolidated Financial Statements
</FN>
</TABLE>

                                                                 4

<PAGE>


<TABLE>
                                                 BROADVISION, INC. AND SUBSIDIARIES
                                                CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                           (In thousands)

<CAPTION>
                                                                                                            Nine Months Ended
                                                                                                              September 30,
                                                                                                          1998               1997
                                                                                                        --------           --------
<S>                                                                                                     <C>                <C>      
Cash flows from operating activities:
Net income (loss)                                                                                       $  1,948           $ (6,287)
Adjustments to reconcile net income (loss) to net cash used for
   operating activities:
     Depreciation and amortization                                                                         2,074              1,148
     Amortization of deferred compensation                                                                   269                331
     Allowance for doubtful accounts and returns                                                             403                345
     Revenue resulting from nonmonetary transactions                                                      (2,917)              --
     Amortization of prepaid royalties                                                                       167               --
     Changes in operating assets and liabilities:
       Accounts receivable                                                                                (2,442)            (4,084)
       Prepaids and other                                                                                   (995)              (281)
       Accounts payable and accrued expenses                                                               1,018               (266)
       Unearned revenue and deferred maintenance                                                             237               (301)
                                                                                                        --------           --------
         Net cash used for operating activities                                                             (238)            (9,395)

Cash flows from investing activities:
   Additions to property and equipment                                                                    (2,932)            (2,004)
   Purchase of long-term investment                                                                       (1,500)              --
   Other assets                                                                                             (161)              --
   Purchase of short-term investments                                                                       --               (1,532)
   Maturity of short-term investments                                                                        796              3,644
                                                                                                        --------           --------
         Net cash provided by (used for) investing activities                                             (3,797)               108

Cash flows from financing activities:
   Net change in restricted cash                                                                           1,400               --
   Proceeds from issuance of common stock                                                                 55,947                730
   Proceeds from borrowings, net                                                                             958                238
   Capital lease payments                                                                                   (633)              (288)
                                                                                                        --------           --------
         Net cash provided by financing activities                                                        57,672                680

Net increase (decrease) in cash and cash equivalents                                                      53,637             (8,607)
Cash and cash equivalents at beginning of period                                                           8,277             17,608
                                                                                                        --------           --------
Cash and cash equivalents at end of period                                                              $ 61,914           $  9,001
                                                                                                        ========           ========


Supplemental disclosures of cash flow information:
   Prepaids and investment acquired in nonmonetary transactions                                         $  5,275           $   --
                                                                                                        ========           ========
   Unearned revenue and deferred maintenance from nonmonetary transactions                              $  2,358           $   --
                                                                                                        ========           ========
   Cash paid for interest                                                                               $    294           $     82
                                                                                                        ========           ========

Non-cash investing and financing activities:
   Equipment acquired under capital leases                                                              $    247           $    178
                                                                                                        ========           ========
   Deferred compensation forfeited due to voluntary terminations                                        $    693           $   --
                                                                                                        ========           ========

<FN>
                                     See Accompanying Notes to Consolidated Financial Statements
</FN>
</TABLE>

                                                                 5

<PAGE>


                       BROADVISION, INC. AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 1.  Organization and Summary of Significant Accounting Policies

Nature  of  Business  -  BroadVision,  Inc.  ("BroadVision"  or  the  "Company")
develops,  markets and supports fully integrated  application software solutions
exclusively  designed  to  manage  one-to-one  relationships  for  the  extended
enterprise.  These total end-to-end solutions enable a business to capitalize on
the  Internet  as a  unique  platform,  which  empowers  businesses  to  enhance
commerce,   provide   critical   self-service   functions  or  deliver  targeted
personalized information to customers,  suppliers,  distributors,  employees, or
any other  constituent of their extended  enterprise on a real-time  interactive
basis.

Basis of  Presentation  - The  accompanying  consolidated  financial  statements
include the accounts of BroadVision and its wholly owned subsidiaries. They have
been  prepared  in  accordance  with  the  established  guidelines  for  interim
financial  information as provided by the  instructions to Form 10-Q and Article
10 of  Regulation  S-X.  All  significant  intercompany  transactions  have been
eliminated in consolidation. The financial results and related information as of
September 30, 1998, and for the three and nine months ended  September 30, 1998,
and 1997 are unaudited. The balance sheet at December 31, 1997, has been derived
from the  audited  financial  statements  at that date but does not  necessarily
reflect all  informational  disclosures  previously  reported in accordance with
Generally  Accepted  Accounting  Principles.   In  the  Company's  opinion,  the
financial  statements  presented  herein  include  all  necessary   adjustments,
consisting  of  normal  recurring  adjustments,  to fairly  state the  Company's
financial  position,  results  of  operations,  and cash  flows for the  periods
indicated.  The accompanying  financial statements should be read in conjunction
with the  financial  statements  and notes  thereto  included with the Company's
annual report on Form 10-K and other  documents  filed with the  Securities  and
Exchange  Commission.  The results of the Company's  operations  for the interim
periods  presented are not necessarily  indicative of operating  results for the
full fiscal year or any future interim periods.

Prepaid  Royalties  - Prepaid  royalties  relating to  purchased  software to be
incorporated  and sold with the Company's  software  products are amortized as a
cost of revenue either on a  straight-line  basis over the remaining term of the
royalty  agreement  or on the basis of  projected  product  revenues,  whichever
results in greater amortization.

Long-term   Investments  -  The  Company  accounts  for   nonmarketable   equity
investments  (consisting  of less than 20% of an investee's  outstanding  voting
stock) based on the cost method;  given the Company does not have the ability to
significantly  influence the  operating and financial  policies of the investee.
Any impairment in value, which is other than a temporary decline,  is charged to
the period in which such loss occurs.

Non-monetary  Transactions - During the quarter ended June 30, 1998, the Company
renegotiated an existing royalty  arrangement with a vendor.  Concurrently,  the
Company  sold this  vendor an  end-use  software  license  totaling  $1,250,000,
inclusive of  maintenance  and support.  As a result of the  renegotiation,  the
Company paid the vendor a fixed fee of $1,250,000 for royalties through 2001 and
certain internal development rights through 1999.  Previously the Company had an
existing arrangement with this vendor whereby the Company made quarterly royalty
payments  based on a  percentage  of product  revenues.  The sale to this vendor
resulted in software  license revenues of  approximately  $1,031,000  during the
quarter ended June 30, 1998.

                                       6

<PAGE>


     On July 22, 1998, the Company finalized a strategic  alliance with Security
First  Technologies  (S1), a publicly  traded company.  In conjunction  with the
strategic  alliance,  the Company received  restricted shares of S1 common stock
with a fair value of approximately  $4,025,000 and, in return, licensed software
to S1 for S1's  internal  use in its data  centers,  entered  into a license and
joint  development  agreement with S1 involving the integration of S1's suite of
Internet-based   products  and  BroadVision's   One-to-One  Financial  (combined
solution),  entered into a reseller  agreement with S1 allowing S1 to resell the
combined solution to its customers, and entered into a joint marketing agreement
for the marketing of products to the  financial  services  industry.  During the
quarter ended  September 30, 1998,  the Company  recognized  license  revenue of
approximately $1,886,000 or 14% of total revenue for the quarter ended September
30,  1998  related to the  licensing  of  software  to S1 for  internal  use. In
conjunction with the agreement with S1, the Company recorded deferred revenue of
approximately   $2,139,000,   which  includes  maintenance   obligations  to  be
recognized  ratably over three  years,  license  revenues and joint  development
costs to be  recognized  as the joint  development  services are  provided,  and
training to be recognized as the services are performed. In addition, subsequent
to September 30, 1998,  the Company issued 123,000 shares of common stock with a
value of $1,322,000 in exchange for 129,700 shares of common stock of S1.

Comprehensive  Income -  Effective  January 1, 1998,  the  Company  adopted  the
provisions  of  Statement of Financial  Accounting  Standards  ("SFAS") No. 130,
Reporting of Comprehensive Income.  Comprehensive income includes all changes in
equity  during a period  except those  resulting  from the issuance of shares of
stock and  distributions  to  stockholders.  There were no material  differences
between net income (loss) and  comprehensive  income (loss) during the three and
nine month periods ended September 30, 1998 and 1997.

Net Loss Per Share - SFAS No. 128, Earnings Per Share, requires the presentation
of basic and diluted  earnings per share.  Earnings per share are  calculated by
dividing net income  applicable  to common  stockholders  by a weighted  average
number  of shares  outstanding  for the  period.  Basic  earnings  per share are
determined solely on common shares, whereas, diluted earnings per share includes
common equivalent shares, as determined under the treasury stock method.

<TABLE>
     The following  table sets forth the basic and diluted  earnings  (loss) per
share computational data for the periods presented.

<CAPTION>
                                                                        Three Months Ended                 Nine Months Ended
                                                                           September 30,                      September 30,
                                                                     -------------------------          ------------------------- 
(In thousands, except per share amounts)                               1998             1997              1998             1997
                                                                     --------         --------          --------         -------- 
<S>                                                                  <C>              <C>               <C>              <C>      
Net income (loss)                                                    $  1,754         $ (1,691)         $  1,948         $ (6,287)
                                                                     ========         ========          ========         ========

Weighted average common shares outstanding
 utilized for basic earnings (loss) per share                          24,264           20,284            22,924           20,169

Weighted average common equivalent shares
  outstanding:
  Employee common stock options                                         2,436             --  [1]          2,272            --   [1]
  Common stock warrant                                                     22             --  [1]             18            --   [1]
                                                                     --------         --------          --------         -------- 

  Total weighted average common and common
    equivalent shares outstanding utilized for
    diluted earnings (loss) per share                                  26,722           20,284            25,214           20,169
                                                                     ========         ========          ========         ========

Basic earnings (loss) per share                                      $   0.07         $  (0.08)         $   0.08         $  (0.31)
                                                                     ========         ========          ========         ========

Diluted earnings (loss) per share                                    $   0.07         $  (0.08)         $   0.08         $  (0.31)
                                                                     ========         ========          ========         ========

<FN>
[1]  The  Company  incurred a net loss for the  indicated  period.  Accordingly,
     common  equivalent  shares are  excluded  from the  diluted  loss per share
     calculation because they are antidilutive.
</FN>
</TABLE>

                                       7

<PAGE>


New  Accounting  Pronouncements  -  The  Financial  Accounting  Standards  Board
("FASB") recently issued SFAS No. 133, Accounting for Derivative Instruments and
Hedging  Activities.  SFAS No.  133  addresses  the  accounting  for  derivative
instruments,   including  certain  derivative   instruments  embedded  in  other
contracts.  Under SFAS No. 133,  entities are  required to carry all  derivative
instruments  in the balance sheet at fair value.  The  accounting for changes in
the fair value  (i.e.,  gains or losses) of a derivative  instrument  depends on
whether it has been  designated and qualifies as part of a hedging  relationship
and, if so, the reason for  holding  it. The Company  must adopt SFAS No. 133 by
January 1, 2000.  The  Company has not  determined  the impact that SFAS No. 133
will have on its financial statements.

     In March 1998,  the  American  Institute of  Certified  Public  Accountants
issued Statement of Position ("SOP") 98-1,  Accounting for the Costs of Computer
Software  Developed or Obtained for Internal Use. SOP 98-1 requires that certain
costs  related to the  development  or  purchase  of  internal-use  software  be
capitalized  and amortized over the estimated  useful life of the software.  SOP
98-1 is effective for  financial  statements  issued for fiscal years  beginning
after December 15, 1998. The Company does not expect the adoption of SOP 98-1 to
have a material impact on its results of operations.


Note 2.  Selective Balance Sheet Detail

     Property and Equipment consisted of the following (in thousands):

                                                    September 30,   December 31,
                                                        1998             1997  
                                                      --------        --------
     Furniture and fixtures                           $    963        $    636
     Computers and software                              7,615           5,458
     Leasehold improvements                              3,475           2,780
                                                      --------        --------
                                                        12,053           8,874
     Less accumulated depreciation and amortization     (4,481)         (2,407)
                                                      --------        --------
                                                      $  7,572        $  6,467
                                                      ========        ========


      Accrued expenses consisted of the following (in thousands):

                                                    September 30,   December 31,
                                                        1998             1997  
                                                      --------        --------

     Employee benefits                                $    589        $    420
     Commissions and bonuses                             1,364             833
     Taxes payable                                         446             366
     Contractors fees                                      180             162
     Other                                                 658             387
                                                      --------        --------
                                                      $  3,237        $  2,168
                                                      ========        ========


Note 3.  Commercial Credit Facilities

     As of  September  30,  1998,  the  Company  has a  credit  facility  with a
commercial lender which includes outstanding  borrowings of $3.6 million under a
note  payable,  an  available  term debt credit  facility of $1.0  million and a
revolving  line  of  credit  that  provides  for up to  $2.3  million  of  total
borrowings  (based on eligible accounts  receivable).  As of September 30, 1998,
the Company has  outstanding  commitments  totaling  $2.2 million in the form of
standby letters of credit under its revolving line of credit.

                                       8

<PAGE>


     The Company's  credit  facilities  include  covenants  that impose  certain
restrictions on the payment of dividends and other distributions and require the
Company to maintain  monthly  financial  covenants,  including  a minimum  quick
ratio,  tangible  net worth ratio and minimum  cash  reserves.  The minimum cash
reserves  covenant is replaced with a minimum debt service  coverage  ratio upon
six consecutive  quarters of profitability.  Borrowings are  collateralized by a
security  interest in  substantially  all of the Company's  owned assets.  As of
September  30, 1998 the Company was in  compliance  with its  commercial  credit
facility covenants.

Note 4.  Common Stock

     In March 1998, the Company  completed a successful  secondary  public stock
offering  and  issued  3,000,000  shares of common  stock  for net  proceeds  of
approximately $46.6 million. In April 1998, the Company's Underwriters exercised
their over-allotment  option and the Company issued an additional 455,850 shares
of common stock for net proceeds of approximately $7.1 million.

                                        9

<PAGE>


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

     EXCEPT FOR THE  HISTORICAL  INFORMATION  CONTAINED  HEREIN,  THE  FOLLOWING
DISCUSSION   CONTAINS   FORWARD-LOOKING   STATEMENTS   THAT  INVOLVE  RISKS  AND
UNCERTAINTIES.  THE COMPANY'S  ACTUAL  RESULTS COULD DIFFER  SIGNIFICANTLY  FROM
THOSE  DISCUSSED  HEREIN.  FACTORS  THAT  COULD  CAUSE  OR  CONTRIBUTE  TO  SUCH
DIFFERENCES  INCLUDE,  BUT ARE NOT LIMITED TO, THOSE DISCUSSED  HEREIN WITH THIS
QUARTERLY  REPORT ON FORM 10-Q,  THE COMPANY'S  ANNUAL REPORT ON FORM 10-K,  AND
OTHER  DOCUMENTS  FILED WITH THE  SECURITIES AND EXCHANGE  COMMISSION.  ANY SUCH
FORWARD-LOOKING STATEMENTS SPEAK ONLY AS OF THE DATE SUCH STATEMENTS ARE MADE.


OVERVIEW

     BroadVision  develops,  markets and supports  real time  interactive  fully
integrated   application  software  solutions  exclusively  designed  to  manage
one-to-one  relationships  for the extended  enterprise.  These total end-to-end
solutions  allow a business to capitalize on the Internet as a unique  platform,
which empowers  businesses to enhance  commerce,  provide critical  self-service
functions,  and deliver  targeted  personalized  information to their customers,
suppliers,  distributors,  employees, or any other constituent of their extended
enterprise.

     BroadVision's  product line provides a competitive advantage for businesses
by allowing  them to  specifically  tailor Web site content to the  personalized
needs and interests of individual visitors on a real-time interactive basis. The
BroadVision  One-To-One  applications  accomplish  this by  capturing  Web  site
visitor  profiles,  dynamically  organizing  enterprise  information,  targeting
content to each individual visitor based on easily  constructed  business rules,
and by providing the means to facilitate  the execution of secure  transactions.
The Company believes the competitive  advantages of these applications  include,
among other  things,  enhanced  customer  satisfaction  and  loyalty,  increased
business volumes, lower costs to service customers and execute transactions,  as
well as significantly enhanced employee productivity.

     The Company's core product, the BroadVision  One-To-One Application System,
was first made  commercially  available in December 1995.  The Company's  latest
commercially  available  version,  Version 4.0, was made  available  for general
release on September  30, 1998 and supports  five  languages  (English,  German,
Japanese,  Chinese,  and Korean) and four major client server databases (Oracle,
Sybase,  Informix,  and Microsoft SQL Server).  A complementary  family of three
packaged  application products based on the BroadVision  One-To-One  Application
System, One-To-One Commerce, One-To-One Financial, and One-To-One Knowledge were
first made commercial  available in 1997. The WebApp products are built upon and
tightly  integrated with the Company's core technology and provide  specifically
enhanced  functionality  for the  distinct  customer  requirements  involved  in
managing  one-to-one  relationships  within  product  merchandising,   financial
services, and knowledge management.

     The Company sells its products and services  worldwide through direct sales
forces, independent distributors, value-added resellers, and system integrators.
It also  has a global  network  of  strategic  business  relationships  with key
industry platform and Web developer partners.

     To date the Company has achieved good market  acceptance  for its products.
However,  the  Company  has a  relatively  limited  operating  history,  and its
prospects must be evaluated in light of the risks and  uncertainties  frequently
encountered  by a company  within its early stages of  development.  Some of the
risks and  uncertainties  associated  with the  Company's  stage of  development
relate to the new and  rapidly  evolving  markets  in which it  operates.  These
related market risks include, among other things, the early stage of development
for  online  commerce,  the  dependence  of  online  commerce  on the  continued
development of the Internet and its related  infrastructure,  the uncertainty of
widespread adoption of online commerce and the risk of government  regulation of
the Internet.  Other risks and  uncertainties  facing the Company  relate to the
Company's ability to continue to, among other things, successfully implement its
marketing strategies,  respond to competitive developments,  develop and upgrade
its  products  and  technologies   more  rapidly  than  its   competitors,   and
commercialize  its  products  and  services  by  incorporating   these  enhanced
technologies.  There  can be no  assurance  that the  Company  will  succeed  in
addressing any or all of these risks.  A more complete  description of these and
other risks  relating to the  Company's  business is set forth  herein under the
caption "Factors Affecting Quarterly Operating Results"; in the Company's annual
report on Form 10-K under the caption "Risk Factors" and elsewhere therein;  and
in other documents filed with the Securities and Exchange Commission.

                                       10

<PAGE>


RESULTS OF OPERATIONS

Revenues

     The  Company's  revenues  are derived from  software  license fees and fees
charged for its services.  The Company recognizes software license revenues when
a  non-cancelable  license  agreement has been signed,  the software product has
been shipped,  there are no uncertainties  surrounding product  acceptance,  the
fees are fixed and determinable, and collection is considered probable. Revenues
allocated to software license fees, in general, are recognized upon consummation
of the sale and the portion  allocated to maintenance  and support is recognized
over the contracted period, which is typically one year.  Professional  services
revenues, in general, are recognized as services are performed.

<TABLE>
     Total  Company  revenues  increased  88% during the current  quarter  ended
September  30, 1998 to $13.4 million as compared to $7.2 million for the quarter
ended  September 30, 1997. For the nine months ended  September 30, 1998,  total
Company revenues increased 89% to $34.9 million as compared to $18.5 million for
the  comparable  period  during  1997.  A summary of the  Company's  revenues by
geographic region is as follows:

<CAPTION>
(In thousands)                    Software          %          Services          %             Total           %
                               --------------   ---------   -------------   ----------    --------------  -----------
<S>                             <C>                  <C>      <C>                   <C>     <C>                   <C>
Quarter Ended:

September 30, 1998

   North America                $      4,777         52%      $     3,013           71%     $     7,790           58%
   Europe                              3,897         43               771           18            4,668           35
   Asia/Pacific                          484          5               489           11              973            7
----------------------------------------------------------------------------------------------------------------------
         Total                  $      9,158        100%      $     4,273          100%     $    13,431          100%
======================================================================================================================

September 30, 1997

   North America                $      2,628         48%      $       721           44%     $     3,349           47%
   Europe                              2,584         47               662           40            3,246           45
   Asia/Pacific                          301          5               258           16              559            8
----------------------------------------------------------------------------------------------------------------------
         Total                  $      5,513        100%      $     1,641          100%     $     7,154          100%
======================================================================================================================

Nine Months Ended:

September 30, 1998

   North America                $     12,278         50%      $     7,327           70%     $    19,605           56%
   Europe                              9,628         39             1,843           18           11,471           33
   Asia/Pacific                        2,549         11             1,269           12            3,818           11
----------------------------------------------------------------------------------------------------------------------
         Total                  $     24,455        100%      $    10,439          100%     $    34,894          100%
======================================================================================================================

September 30, 1997

   North America                $      5,221         41%      $     2,709           47%     $     7,930           43%
   Europe                              6,237         49             1,456           26            7,693           42
   Asia/Pacific                        1,301         10             1,548           27            2,849           15
----------------------------------------------------------------------------------------------------------------------
         Total                  $     12,759        100%      $     5,713          100%     $    18,472          100%
======================================================================================================================
</TABLE>


     Software product license revenues  increased 66% during the current quarter
ended  September  30, 1998 to $9.2  million as compared to $5.5  million for the
quarter ended  September 30, 1997. For the nine months ended September 30, 1998,
license revenues increased 92% to $24.5 million as compared to $12.8 million for
the comparable period during 1997.

     The increases in software  license  revenues are primarily  attributable to
continued   strong  market   acceptance  for  the  Company's  core   technology,
BroadVision  One-To-One,  and its three complementary WebApp packaged solutions,
"BroadVision  One-To-One  Commerce",  "BroadVision  One-To-One  Financial",  and
"BroadVision  One-To-One Knowledge".  During the nine months ended September 30,
1998, the Company  licensed  approximately  85 new customers  (including  system
integration / distributor  partners) which compares with approximately 70 during
the nine months ended  September 30, 1997.  The WebApp  packaged  solutions were
first introduced in 1997 and have become an integral part of the Company's total
applications  solution,  which has proven to be a  successful  strategy  for the
Company in today's highly evolving and competitive marketplace.

                                       11
<PAGE>


Nonmonetary  transactions.  During the quarter ended June 30, 1998,  the Company
renegotiated an existing royalty  arrangement with a vendor.  Concurrently,  the
Company  sold this  vendor an  end-use  software  license  totaling  $1,250,000,
inclusive of  maintenance  and support.  As a result of the  renegotiation,  the
Company paid the vendor a fixed fee of $1,250,000 for royalties through 2001 and
certain internal development rights through 1999. Previously, the Company had an
existing arrangement with this vendor whereby the Company made quarterly royalty
payments  based on a  percentage  of product  revenues.  The sale to this vendor
resulted in software  license revenues of  approximately  $1,031,000  during the
quarter ended June 30, 1998.

     On July 22, 1998, the Company finalized a strategic  alliance with Security
First  Technologies  (S1), a publicly  traded company.  In conjunction  with the
strategic  alliance,  the Company received  restricted shares of S1 common stock
with a fair value of approximately  $4,025,000 and, in return, licensed software
to S1 for S1's  internal  use in its data  centers,  entered  into a license and
joint  development  agreement with S1 involving the integration of S1's suite of
Internet-based   products  and  BroadVision's   One-to-One  Financial  (combined
solution),  entered into a reseller  agreement with S1 allowing S1 to resell the
combined solution to its customers, and entered into a joint marketing agreement
for the marketing of products to the  financial  services  industry.  During the
quarter ended  September 30, 1998,  the Company  recognized  license  revenue of
approximately $1,886,000 or 14% of total revenue for the quarter ended September
30,  1998  related to the  licensing  of  software  to S1 for  internal  use. In
conjunction with the agreement with S1, the Company recorded deferred revenue of
approximately   $2,139,000,   which  includes  maintenance   obligations  to  be
recognized  ratably over three  years,  license  revenues and joint  development
costs to be  recognized  as the joint  development  services are  provided,  and
training to be recognized as the services are performed. In addition, subsequent
to September 30, 1998,  the Company issued 123,000 shares of common stock with a
value of $1,320,000 in exchange for 129,700 shares of common stock of S1.

     Total services  revenues  increased  160% during the current  quarter ended
September  30, 1998 to $4.3  million as compared to $1.6 million for the quarter
ended September 30, 1997. For the nine months ended September 30, 1998, services
revenues  increased  83% to $10.4  million as compared  to $5.7  million for the
comparable period during 1997.

     Services   revenues   consist   primarily  of  professional   services  and
maintenance.  The Company's professional services include application design and
implementation of BroadVision One-To-One technology,  project management, custom
development of  application  objects and  templates,  and product  education and
training.  Professional  services are generally  offered on a time and materials
basis.  Maintenance  revenue is derived from annual  service  agreements  and is
recognized  ratably  over the  period  of the  agreement,  typically  one  year.
Maintenance fees are based on a percentage of the related software list price.

     Professional  services  revenues  increased 164% during the current quarter
ended  September  30, 1998 to $2.9  million as compared to $1.1  million for the
quarter ended  September 30, 1997. For the nine months ended September 30, 1998,
professional services revenues increased 65% to $7.1 million as compared to $4.3
million for the comparable period during 1997.

     Professional  services  revenues  increased as a result of higher  business
volumes as evidenced by the increase in license revenues.  The Company continues
to pursue a strategy of utilizing partners to maximize deployments.  This allows
the  Company to achieve  higher  product  sales  volumes  without  corresponding
increases in its services organization.  As the Company's strategy of developing
business alliances with third parties continues to expand, professional services
revenues in relative  percentage terms may vary depending on the degree to which
the Company leverages its professional services.

     Maintenance  revenues  increased  154%  during the  current  quarter  ended
September 30, 1998 to $1.4 million as compared to $500,000 for the quarter ended
September 30, 1997.  For the nine months ended  September 30, 1998,  maintenance
revenues  increased  139% to $3.3  million as compared  to $1.4  million for the
comparable period during 1997.

                                       12

<PAGE>


<TABLE>
     Maintenance  revenues  increased as a direct  result of expanding  software
sales and a correspondingly  larger installed base of software  licenses.  As of
September 30, 1998, the Company had licensed its products to  approximately  235
customers.  This  compares with  approximately  150 customers as of December 31,
1997, and approximately 120 customers as of September 30, 1997. As the Company's
installed  license base grows, its maintenance  revenues in relative  percentage
terms may increase.


<CAPTION>
Cost of Revenues
                                      Three Months Ended September 30,             Nine months ended September 30,
                                -----------------------------------------     -----------------------------------------
(in thousands)                     1998        %         1997         %         1998         %         1997         %
                                ---------    -----     ---------    -----     ---------    -----     --------     -----
<S>                             <C>            <C>     <C>            <C>     <C>            <C>     <C>           <C> 
Cost of software licenses[1]    $     237      2.6%    $     460      8.3%    $     637      2.6%    $  1,099      8.6%
Cost of services[2]                 2,553     59.7         1,010     61.5         6,264     60.0        3,154     55.2
                                ---------              ---------              ---------              --------

Total cost of revenues[3]        $  2,790     20.8     $   1,470     20.5     $   6,901     19.8     $  4,253     23.0
                                =========              =========              =========              ========


<FN>
[1]  -- Percentage is calculated  based on total software  license  revenues for
     the period indicated

[2]  -- Percentage is calculated based on total services revenues for the period
     indicated

[3]  --  Percentage  is  calculated  based  on  total  revenues  for the  period
     indicated
</FN>
</TABLE>


     Cost of software licenses  includes  royalties payable to third parties for
software  that is either  embedded in, or bundled and sold with,  the  Company's
products; commissioned agent fees paid to distributors; and the costs of product
media, duplication, packaging and other associated manufacturing costs.

     Cost of software  licenses  decreased 48% during the current  quarter ended
September  30, 1998 to $237,000  as compared to $460,000  for the quarter  ended
September  30, 1997.  For the nine months  ended  September  30,  1998,  cost of
software licenses  decreased 42% to $637,000 as compared to $1.1 million for the
comparable period during 1997.

     The  decrease in cost of software  licenses,  in both  absolute  dollar and
relative  percentage terms, was principally a result of lower commissioned agent
sales and third  party  royalty  rates.  The  Company  continues  to expand  its
in-house sales force,  and during the current periods,  Company  generated sales
were  higher  and  commissioned  agent  sales  were  lower  in  relation  to the
comparable  prior-year  periods.  In addition,  royalty costs  relative to total
license revenues decreased as a result of the Company renegotiating a previously
existing  percentage based royalty  arrangement into a prepaid fixed fee royalty
for the period through 2001.

     Cost of services consists primarily of employee-related costs,  third-party
consultant fees incurred on consulting projects,  postcontract customer support,
and instructional training services.

     Cost of services  increased 153% during the current quarter ended September
30,  1998 to $2.6  million as compared  to $1.0  million  for the quarter  ended
September  30, 1997.  For the nine months  ended  September  30,  1998,  cost of
services  increased  99% to $6.3  million as  compared  to $3.2  million for the
comparable period during 1997.

     The  increase in cost of services in absolute  dollar  terms during 1998 as
compared  to 1997 is a result of  expanded  business  volumes  as  evidenced  by
increased services revenues. Overall costs increased as a result of additions to
the  Company's  professional  services  staff  and  the  employment  of  outside
consultants to meet short-term consulting arrangements.  The increase in cost of
services  as a  percentage  of  services  revenues  for the  nine  months  ended
September 30, 1998 is a result of higher  utilization of outside  consultants in
relation to the extent previously  utilized during the prior period. The Company
expects that services costs will continue to increase in absolute dollars as the
Company continues to expand its services organization to support higher business
volumes.

                                       13

<PAGE>


<TABLE>
Operating Expenses

<CAPTION>
                                              Three Months Ended                            Nine Months Ended
                                                September 30,                                September 30,
                                -----------------------------------------     -----------------------------------------
(in thousands)                     1998      % [1]      1997       % [1]        1998       % [1]       1997       % [1]
                                ---------    -----     ---------    -----     ---------    -----     --------     -----
<S>                             <C>           <C>      <C>           <C>      <C>           <C>      <C>          <C>  
Research and Development        $   2,394     17.8%    $   2,113     29.5%    $   6,476     18.6%    $  5,595     30.3%
Sales and Marketing                 6,285     46.8         4,630     64.7        18,389     52.7       13,091     70.9
General and Administrative            977      7.3           763     10.7         2,562      7.3        2,209     11.9
                                ---------    -----     ---------    -----     ---------    -----     --------     -----

Total Operating Expenses        $   9,656     71.9%    $   7,506    104.9%    $  27,427     78.6%    $ 20,895     113.1%
                                =========    =====     =========    =====     =========    =====     ========     =====

<FN>
[1] -- Expressed as a percent of total revenues for the period indicated
</FN>
</TABLE>


     Research  and   development   expenses   consist   primarily  of  salaries,
employee-related benefit costs, and consulting fees incurred in association with
the development of the Company's  products.  Costs incurred for the research and
development  of new software  products are expensed as incurred  until such time
that technological  feasibility,  in the form of a working model, is established
at which time such costs are capitalized subject to recoverability. To date, the
amount of costs  incurred by the Company  subsequent to the  establishment  of a
working  model  but prior to the  general  release  of a  product  have not been
significant.  As of September 30, 1998, the Company has no capitalized  software
development costs.

     Research and development  expenses increased 13% during the current quarter
ended  September  30, 1998 to $2.4  million as compared to $2.1  million for the
quarter ended  September 30, 1997. For the nine months ended September 30, 1998,
research  and  development  expenses  increased  16% to $6.5 as compared to $5.6
million for the comparable period during 1997.

     The increase in research and development expenses in absolute dollars terms
is primarily  attributable to personnel  costs for added headcount  within those
operations  involved  in  the  enhancement  of  existing  applications  and  the
development  of  the  Company's  next  generation  of  products.   Research  and
development  expenses,  as a percentage  of total  revenues,  decreased  because
revenues  have  increased  at a higher rate  relative to  expenses.  The Company
expects research and development  expenses will continue to increase in absolute
dollars terms.

     Sales   and   marketing    expenses   consist    primarily   of   salaries,
employee-related  benefit costs,  commissions and other incentive  compensation,
travel and  entertainment,  and marketing  program related  expenditures such as
collateral materials, trade shows, public relations, and creative services.

     Sales and marketing expenses increased 36% during the current quarter ended
September  30, 1998 to $6.3  million as compared to $4.6 million for the quarter
ended  September 30, 1997. For the nine months ended  September 30, 1998,  sales
and  marketing  expenses  increased  40% to $18.4  million as  compared to $13.1
million for the comparable period during 1997.

     The  increases  in sales and  marketing  expenses in absolute  dollar terms
reflect the cost of hiring additional sales and marketing personnel,  developing
and  expanding  its  sales  distribution  channels,  and  expanding  promotional
activities and marketing related programs.  Sales and marketing  expenses,  as a
percentage of total  revenues,  decreased  because  revenues have increased at a
higher  rate  relative to  expenses.  The Company  expects  sales and  marketing
expenses will continue to increase in absolute dollar terms.

     General  and   administrative   expenses  consist  primarily  of  salaries,
employee-related benefit costs, and professional service fees.

     General  and  administrative  expenses  increased  28% during  the  current
quarter  ended  September  30, 1998 to $977,000 as compared to $763,000  for the
quarter ended  September 30, 1997. For the nine months ended September 30, 1998,
general and administrative expenses increased 16% to $2.6 million as compared to
$2.2 million for the comparable period during 1997.

                                       14

<PAGE>


     The  increase in general  and  administrative  expenses in absolute  dollar
terms is attributable  to additional  administrative  and management  personnel,
higher professional fees and additional  infrastructure to support the expansion
of  the  Company's  operations.   General  and  administrative  expenses,  as  a
percentage of total  revenues,  decreased  because  revenues have increased at a
higher rate relative to expenses. The Company expects general and administrative
expenses will continue to increase in absolute dollar terms.

     The Company  recorded  deferred  compensation  relating  to the  difference
between the  exercise  price and the fair value of the  Company's  Common  Stock
concerning  shares  issueable upon the exercise of options  granted prior to its
initial  public stock  offering in June of 1996.  As of  September  30, 1998 the
Company had total deferred compensation of $643,000, which is being amortized to
cost of services,  research and development,  selling and marketing, and general
and administrative  expenses over the vesting periods of the respective options,
generally  60 months.  Deferred  compensation  expense  for the  quarters  ended
September 30, 1998 and 1997 was $89,000 and $104,000,  respectively; and for the
nine months ended  September  30, 1998 and 1997 it was  $269,000  and  $331,000,
respectively.  During the quarter  ended June 30,  1998,  the  Company  reversed
$693,000 of paid-in  capital along with an equal amount of unamortized  deferred
compensation  as a result of  unexercised  stock options that were  forfeited by
employees due to voluntary terminations.


LIQUIDITY AND CAPITAL RESOURCES

     As of September  30, 1998,  the Company had $61.9  million of cash and cash
equivalents as compared to $10.4 million of cash, cash  equivalents,  restricted
cash and  short-term  investments as of December 31, 1997,  which  represents an
increase of $51.5  million.  The overall  increase  is  principally  a result of
proceeds  from the  issuance of common  stock.  During  March 1998,  the Company
issued  3,000,000  shares of common stock in connection with a secondary  public
stock  offering that netted the Company total  proceeds of  approximately  $46.6
million.  During April 1998, the underwriters for the Company's  secondary stock
offering  exercised  their  over-allotment  option  and the  Company  issued  an
additional 455,850 shares of common stock for net proceeds of approximately $7.1
million.

     For  the  nine  months  ended   September   30,  1998,   the  Company  used
approximately $2.9 million for capital expenditures,  approximately $1.5 million
for the purchase of an equity investment in a partner and approximately $200,000
was used for operating  activities;  and the Company raised  approximately $55.9
million  from the  issuance  of common  stock and  approximately  $300,000  from
additional  borrowings,  net of  capital  lease and  principal  repayments.  The
Company  currently  has  no  significant  capital  commitments  other  than  its
obligations under equipment and operating leases, outstanding borrowings of $3.6
million under a note payable and commitments of $2.2 million relating to standby
letters of credit.  The Company's  existing  commercial credit facility provides
for up to total additional borrowings of $3.3 million ($1.1 million of available
credit as of September 30, 1998).

     The Company believes that its available cash resources, cash generated from
operations and amounts  available under its commercial credit facilities will be
sufficient  to  meet  its  expected  working  capital  and  capital  expenditure
requirements for more than the next 12 months.


FACTORS AFFECTING QUARTERLY OPERATING RESULTS

     The Company  expects to experience  significant  fluctuations  in quarterly
operating results that may be caused by many factors including,  but not limited
to, those discussed below and herein with this quarterly report on Form 10-Q, as
contained in the  Company's  annual  report on Form 10-K under the caption "Risk
Factors" and elsewhere  therein,  and as disclosed in other documents filed with
the Securities and Exchange Commission.

     Significant  fluctuations in future quarterly operating results that may be
caused by many factors  including,  among others, the timing of introductions or
enhancements  of products  and services by the Company or its  competitors,  the
length of the Company's sales cycle, market acceptance of new products, the pace
of  development  of the  market for online  commerce,  the mix of the  Company's
products  sold,  the size and  timing of  significant  orders  and the timing of
customer production or deployment, demand for the Company's products, changes in
pricing  policies by the Company or its

                                       15

<PAGE>


competitors, changes in the Company's sales incentive plans, budgeting cycles of
its  customers,  customer  order  deferrals in  anticipation  of new products or
enhancements  by the  Company  or its  competitors,  nonrenewal  of  maintenance
agreements,  product life cycles,  software  defects and other  product  quality
problems,  changes  in  strategy,  changes  in  key  personnel,  the  extent  of
international  expansion,  seasonal  trends,  the mix of  distribution  channels
through  which the Company's  products are sold,  the mix of  international  and
domestic sales,  changes in the level of operating expenses to support projected
growth,  and  general  economic  conditions.  The  Company  anticipates  that  a
significant  portion of its revenues  will be derived  from a limited  number of
orders, and the timing of receipt and fulfillment of any such orders is expected
to cause material fluctuations in the Company's operating results,  particularly
on a quarterly basis. As with many software  companies,  the Company anticipates
that it will make the major portion of each quarter's deliveries near the end of
each quarter  and, as a result,  short delays in delivery of products at the end
of a quarter could  adversely  affect  operating  results for that  quarter.  In
addition,  the Company intends, in the near term, to increase  significantly its
personnel,  including  its domestic and  international  direct sales force.  The
timing  of such  expansion  and the  rate  at  which  new  sales  people  become
productive  could also cause material  fluctuations  in the Company's  quarterly
operating results.

     Due to the foregoing factors,  quarterly revenues and operating results are
difficult  to  forecast,   and  the  Company   believes  that   period-to-period
comparisons  of its operating  results will not  necessarily  be meaningful  and
should not be relied upon as any indication of future performance.  It is likely
that the Company's future quarterly operating results from time to time will not
meet the expectations of market analysts or investors, which may have an adverse
effect on the price of the Company's Common Stock. The Company  anticipates that
its  operating  expenses will  continue to be  substantial  in relation to total
revenues as it continues the development of its technology,  increases its sales
and marketing activities,  and creates and expands its distribution channels. In
addition, the Company's limited operating history makes the prediction of future
results of operations difficult and, accordingly, there can be no assurance that
the Company will be able to sustain its revenue growth or profitability.

     The Company's limited operating history also requires that its prospects be
evaluated in light of the risks and  uncertainties  frequently  encountered by a
company  in  its  early  stages  of   development.   Some  of  these  risks  and
uncertainties  relate to the new and rapidly  evolving  nature of the markets in
which the Company  operates.  These related  market risks  include,  among other
things, the early stage of the developing online commerce market, the dependence
of  online  commerce  on  the  development  of  the  Internet  and  its  related
infrastructure,  the  uncertainty  pertaining to  widespread  adoption of online
commerce, and the risk of government regulation of the Internet. Other risks and
uncertainties facing the Company relate to the Company's ability to, among other
things, successfully implement its marketing strategies,  respond to competitive
developments, continue to develop and upgrade its products and technologies more
rapidly than its  competitors,  and  commercialize  its products and services by
incorporating  these enhanced  technologies.  There can be no assurance that the
Company will succeed in  addressing  any or all of these risks.  A more complete
description of these and other risks  relating to the Company's  business is set
forth in the  Company's  annual  report on Form 10-K  under  the  caption  "Risk
Factors" and elsewhere therein and other documents filed with the Securities and
Exchange  Commission.  It is also likely  that the  Company's  future  quarterly
operating  results  from time to time will not meet the  expectations  of market
analysts  or  investors,  which may have an  adverse  effect on the price of the
Company's Common Stock.

Year 2000 Compliance

Background and Risks - Many currently  installed  computer  systems and software
and devices with imbedded  technology are coded to two digits for time sensitive
dating purposes.  Beginning with the year 2000, these date code fields will need
to be four digit  functional in order to distinguish  between 21st century dates
and 20th century dates. For example,  computer programs that have date sensitive
software  may  incorrectly  recognize  a date using "00" as the year 1900 rather
than the year  2000.  As a result,  in less than two  years,  computer  systems,
software  products and devices with imbedded  technology  used by many companies
may need to be upgraded to comply with such "Year 2000" requirements.  This type
of Year 2000 error could  potentially  cause system failures or  miscalculations
that  could  disrupt  operations,  including  among  other  things  a  temporary
inability to process  transactions,  issue  invoices or engage in similar normal
business activities. The most likely worst case scenarios could include hardware
failure  and the  failure of  infrastructure  services  provided  by  government
agencies and other third parties (e.g.,  electricity,  telephone service,  water
transport, Internet services, etc.).

                                       16

<PAGE>


     Although  the  Company's  products  are Year 2000  compliant,  the  Company
believes that the purchasing patterns of customers could potentially be affected
by Year 2000 issues as  companies  expend  significant  resources  to correct or
patch  their  current  software   systems  for  Year  2000   compliance.   These
expenditures may result in reduced funds available to purchase software products
such as those offered by the Company, which could have a material adverse effect
on the  Company's  business,  financial  condition,  and operating  results.  In
addition, even if the Company's products are Year 2000 compliant,  other systems
or software used by the Company's customers may not be Year 2000 compliant.  The
failure of such  noncompliant  third-party  software or systems could affect the
perceived  performance  of the Company's  products,  which could have a material
adverse effect on the Company's  business,  financial  condition,  and operating
results.

State of  Readiness - The Company  utilizes  various  financial  and  managerial
information systems within its operations in the United States,  Europe and Asia
which the Company believes to be or will be Year 2000 compliant.  As part of its
normal  course  of  business,   the  Company  analyses  its  information  system
requirements  in  relation  to  its  business   operating  goals  and  strategic
objectives  and expects to implement  new systems  during 1999 that will be Year
2000 compliant.  The Company is also analyzing its other systems to identify any
potential Year 2000 issues and will take appropriate  corrective action based on
the  results  of such  analysis.  Such  other  systems  include  non-information
technology  systems  and  services  utilized  by the  Company  in  its  business
operations, such as power, telecommunications,  security and general facilities.
The Company is in the process of assessing  whether its material  suppliers  and
vendors are Year 2000 compliant. The Company expects to complete its analysis of
these other systems and the  assessment  of its third party vendor  readiness by
June 30, 1999.

Costs for Year 2000  Compliance  - Costs  that may be  incurred  by the  Company
pertaining to Year 2000 compliance  issues include  identification,  assessment,
remediation  and testing  efforts,  as well as potential costs to be incurred by
the Company  with  respect to Year 2000 issues of third  parties.  To date,  the
costs  incurred  by the Company  directly  related to Year 2000 issues have been
minimal, even in cases where non-compliant  information  technology systems were
redeployed or replaced. Although the Company has not completed its assessment of
all specific costs, if any, related to achieving  complete Year 2000 compliance,
management  believes such costs would not be material to the Company's financial
condition or results of operations based on its analysis to date.

Contingency  Plans - The Company  continues  to assess  certain of its Year 2000
exposure  areas  in order to  determine  what  additional  steps,  beyond  those
identified by the Company's internal review to date, are advisable.  The Company
is currently in the process of developing a  contingency  plan for handling Year
2000 problems that are not detected and corrected prior to their occurrence. The
Company expects to complete its plan by June 30, 1999.

     The  Company  presently  believes  that the Year 2000  issue  will not pose
significant  operational  problems for the Company.  However, any failure of the
Company to adequately  address any  unforeseen  Year 2000 issue could  adversely
affect the Company's business,  financial condition,  and results of operations.
In  addition,  if all of the Year 2000 issues are not  properly  identified,  or
adequate  assessment,  remediation  and  testing  are not  effected  timely with
respect to Year 2000  problems  that are  identified,  there can be no assurance
that the Year 2000 issue would not have a material  adverse impact the Company's
results of  operations  or adversely  affect the  Company's  relationships  with
customers, vendors, partners or others. Additionally,  there can be no assurance
that the Year 2000  issues of other  entities  will not have a material  adverse
impact on the Company's systems or results of operations.

ITEM 3.           QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 

     Not applicable.

                                       17

<PAGE>

                           PART II. OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

              Not applicable

ITEM 2.       CHANGES IN SECURITIES AND USE OF PROCEEDS

              Not applicable

ITEM 3.  DEFAULTS UPON SENIOR SECURITIES

              Not applicable

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

              Not applicable

ITEM 5.  OTHER INFORMATION

              Not applicable

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

        (a)   Exhibits

              Item     Description
              ----     -----------
              27       Financial Data Schedule


                                   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.

                                                   BROADVISION, INC

Date: November 13, 1998                     /s/  Pehong Chen
      -----------------                     ------------------------------------
                                                 Pehong Chen
                                                 President and Chief Executive
                                                 Officer (Principal Executive
                                                 Officer)


Date: November 13, 1998                     /s/  Randall C. Bolten
      -----------------                     ------------------------------------
                                                 Randall C. Bolten
                                                 Vice President, Operations and
                                                 Chief Financial Officer 
                                                 (Principal Financial and
                                                 Accounting Officer)

                                       18

<PAGE>


                                INDEX TO EXHIBITS


 Exhibit
  No.         Description                            
  ---         -----------                            
  27          Financial Data Schedule

                                       19