SECURITIES AND EXCHANGE COMMISSION
                      Washington, D.C. 20549
                        __________________
                         ---------------
                            FORM 10-Q
                         ---------------


    XX  Quarterly report pursuant to Section 13 or 15(d) of the
        Securities Exchange Act of 1934, for the quarterly period
        ended March 31, 1998, or

        Transition report pursuant to Section 13 or 15(d) of the
        Securities Exchange Act of 1934, For the transition
        period from  ---------- to ---------

                  Commission File Number 1-10139
                    --------------------------


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

     DELAWARE                              04-2911320
(State or other jurisdiction of         (I.R.S. Employer
 incorporation or organization)         Identification No.)

  245 WINTER STREET
WALTHAM, MASSACHUSETTS                         02154
(Address of principal                        (Zip Code)
executive offices)


                          (781) 890-1700
                 (Registrant's Telephone Number)


Securities registered pursuant to Section 12(g) of the Act: NONE
                         -----------------

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 other 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  XX YES     No


As of May 7, 1998 there were 9,397,526 shares of Common Stock
outstanding.

<PAGE>
                           FORM 10-Q

                        QUARTERLY REPORT

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

                       TABLE OF CONTENTS


Facing Sheet . . . . . . . . . . . . . . . . . . . . . . . 1

Table of Contents  . . . . . . . . . . . . . . . . . . . . 2


PART I.  FINANCIAL INFORMATION

Item 1. Consolidated Financial Statements
          Consolidated Balance Sheets  . . . . . . . . . . 3
          Consolidated Statements of Operations. . . . . . 5
          Consolidated Statements of Cash Flows. . . . . . 6
          Notes to Consolidated Financial Statements . . . 8

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


PART II.  OTHER INFORMATION

Item 1. Legal Proceedings. . . . . . . . . . . . . . . . .13

Item 2. Changes in Securities. . . . . . . . . . . . . . .13

Item 3. Defaults Upon Senior Securities. . . . . . . . . .13

Item 4. Submission of Matters to a Vote of 
        Security Holders  . . . . . . . . . . . . . . . . 13

Item 5. Other Information  . . . . . . . . . . . . . . . .13

Item 6. Exhibits and Reports on Form 8-K . . . . . . . . .13


SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . .14

Exhibit 11 - Computation of earnings per share . . . . . .15
<PAGE>
                 PART I. - FINANCIAL INFORMATION

                        NETEGRITY, INC.
                  CONSOLIDATED BALANCE SHEETS

                             ASSETS

                                      March 31,
                                        1998        December 31,
                                     (unaudited)        1997

CURRENT ASSETS:                                                   
      
  Cash and cash equivalents           $3,019,570     $2,133,586
  Escrow receivable                      600,000        600,000
  Accounts receivable-trade, net of 
  allowance for doubtful accounts 
  of $58,470 and $64,460 at March 31, 
  1998 and December 31, 1997, 
  respectively                           611,353        791,369
  Other current assets                   309,501        312,971
  
  
  TOTAL CURRENT ASSETS                 4,540,424      3,837,926
  
EQUIPMENT AND LEASEHOLD 
  IMPROVEMENTS, NET                      612,741        585,055

CAPITALIZED SOFTWARE COSTS               293,374        309,891
  
OTHER ASSETS:                                                     

  Investment in Encotone, Inc.               ---         78,199
    Other                                 50,797         37,438

  TOTAL OTHER ASSETS                      50,797        115,637
  
TOTAL ASSETS                          $5,497,336     $4,848,509


The accompanying notes are an integral part of the financial
statements.

<PAGE>
                        NETEGRITY, INC.
                  CONSOLIDATED BALANCE SHEETS

              LIABILITIES AND STOCKHOLDERS' EQUITY


                                      March 31,
                                        1998        December 31,
                                     (unaudited)        1997

CURRENT LIABILITIES:
  Accounts payable-trade             $ 1,077,771    $ 1,507,071
  Other accrued expenses               2,099,685      2,022,949
  Accrued compensation                   297,633        279,722
  Current portion of capitalized 
  lease obligations                       20,141         19,068
  
TOTAL CURRENT LIABILITIES              3,495,230      3,828,810
  
Long-term capital lease obligations          ---          3,653

COMMITMENTS AND CONTINGENCIES                ---            ---

TOTAL LIABILITIES                      3,495,230      3,832,463
  
STOCKHOLDERS' EQUITY:
  Series D Preferred Stock, $.01 
   par value 1,666,667 shares 
   authorized and outstanding 
   as of March 31, 1998                    16,667           ---
  Common stock, voting, $.01 par 
   value, authorized 25,000,000 
   shares: 9,286,346 shares 
   issued and 9,261,245 shares 
   outstanding at March 31, 1998;
   9,279,346 shares issued and 
   9,254,245 shares outstanding 
   at December 31, 1997                    92,886        92,793
  Additional paid-in capital           13,021,161    10,578,330
  Cumulative translation adjustment        28,028        28,028
  Cumulative deficit                  (10,872,979)   (9,399,448)
  Loan to officer                        (200,000)     (200,000)
                                        2,085,763     1,099,703
  Less - Treasury Stock, at cost: 
  25,101 shares                           (83,657)      (83,657)
  
TOTAL STOCKHOLDERS' EQUITY              2,002,106     1,016,046
  
TOTAL LIABILITIES AND 
  STOCKHOLDERS' EQUITY                $ 5,497,336   $ 4,848,509

The accompanying notes are an integral part of the financial
statements.<PAGE>
                         NETEGRITY, INC.
              CONSOLIDATED STATEMENTS OF OPERATIONS
                           (Unaudited)


                                       For the three months ended
                                                 March 31,
                                             1998        1997

Net revenues                              $ 809,821  $  986,594
Cost of revenues                            346,556     535,251
  
Gross profit                                463,265     451,343
  
Selling, general and administrative 
  expenses                                1,547,910   1,021,522
Research and development costs              420,856     101,148
  
Loss from operations                     (1,505,501)   (671,327)
  
Interest income (expense)                    31,970      79,062
Share of loss from investment 
  in Encotone, Inc.                             ---     (56,044)

  
Net loss                                $(1,473,531) $ (648,309)

Basic loss per share                         $(0.16)     $(0.07)

Weighted average shares 
  outstanding (basic)                     9,284,036   9,261,616

Diluted loss per share                       $(0.16)     $(0.07)

Weighted average shares 
  outstanding (diluted)                   9,284,036   9,261,616


The accompanying notes are an integral part of the financial
statements.
<PAGE>
                         NETEGRITY, INC.
              CONSOLIDATED STATEMENTS OF CASH FLOWS
                           (Unaudited)


                                       For the three months ended
                                                March 31,
                                            1998        1997

OPERATING ACTIVITIES

Net income (loss) from 
  continuing operations               $(1,473,531) $ (648,309)
Adjustments to reconcile 
 income (loss) tonet cash 
 provided by (used for) 
 operating activities:
  Share of loss from investment               ---      56,044
  Depreciation and amortization            40,663      16,500
  Provision for doubtful accounts 
   receivable                              (5,990)      7,000

Change in operating assets and 
 liabilities:
  Accounts receivable                     186,006     107,923
  Other current assets                      3,470     (13,701)
  Accounts payable                       (429,300)   (234,628)
  Other accrued expenses                   94,647     (43,123)
  Other assets                             64,840         ---

  Total adjustments                       (45,664)   (103,985)
  
    Net cash (used for) provided 
     by continuing operating 
     activities                        (1,519,195)   (752,294)

    Net cash (used for) provided 
     by discontinued operating 
     activities                               ---     (31,766)
  
    Net cash (used for) provided 
     by operating activities          $(1,519,195) $ (784,060)


The accompanying notes are an integral part of the financial
statements.
<PAGE>
                         NETEGRITY, INC.
          CONSOLIDATED STATEMENTS OF CASH FLOWS (Cont.)
                           (Unaudited)


                                       For the three months ended
                                                March 31,
                                            1998         1997

INVESTING  ACTIVITIES:
Capitalized software costs              $   16,517  $  (158,839)
Capital expenditures for equipment 
 and leasehold improvements                (68,349)     (74,448)
  Net cash used for investing 
   activities                              (51,832)    (233,287)

FINANCING  ACTIVITIES:
Net proceeds from issuance of 
 preferred stock                         2,450,001          ---
Net proceeds from issuance of 
 common stock                                9,590      103,201
Principal payments under 
 capital leases                             (2,580)         ---

  Net cash provided by (used for)
  financing activities                   2,457,011      103,201
  
Effect of exchange rate changes 
 on cash                                       ---          ---

  NET (DECREASE) INCREASE IN CASH 
   AND CASH EQUIVALENTS                    885,984     (914,146)
  
Cash and cash equivalents at 
 beginning of period                     2,133,586    6,791,057
  
  CASH AND CASH EQUIVALENTS AT 
   END OF PERIOD                        $3,019,570   $5,876,911

Supplemental Disclosures of Cash 
  Flow Information:
  Interest paid                         $      599          ---

  Income taxes paid                            ---   $   63,557
  

The accompanying notes are an integral part of the financial
statements.
<PAGE>
                         NETEGRITY, INC.
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


      Note 1 - The unaudited financial information furnished
herein reflects all adjustments which are of a normal recurring
nature, which in the opinion of management are necessary to
fairly state the Company's financial position, cash flows and the
results of its operations for the periods presented. Certain
information and footnote disclosure normally included in
financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted. 
This information should be read in conjunction with the Company's
audited financial statements for the fiscal year ended December
31, 1997, included in Form 10-K filed on March 31, 1998. 

      Note 2 - The results of operations for the three-month
period ended March 31, 1998 are not necessarily indicative of the
results to be expected for the entire year ending December 31,
1998.

      Note 3 - The Company has adopted Statement of Financial
Accounting Standards (SFAS) No. 128 "Earnings Per Share" and has
retroactively restated the earnings per share (EPS) for Q1 1997.
SFAS 128 requires presentation of basic and diluted EPS. Basic
EPS is computed by dividing net income by the number of weighted
average common shares outstanding. Diluted EPS reflects potential
dilution from outstanding stock options and warrants, using the
treasury stock method. For the periods that options are
anti-dilutive, they are not included in the calculation of
earnings per share.

      Note 4 - The Company follows Statement of Financial
Accounting Standards ("SFAS") No. 109 "Accounting for Income
Taxes." Under SFAS No. 109, deferred tax assets and liabilities
are recognized for the unexpected future tax consequences of
events that have been included in the financial statements or
tax returns.  The amount of deferred tax asset or liability is
based on the difference between the financial statement and tax
bases of assets and liabilities using enacted tax rates in effect
for the year in which the differences are expected to reverse.

      Note 5 -  The Company capitalizes certain internally
generated software development costs after technological
feasibility of the product has been established. Such costs are
amortized over the estimated life of the product. The Company
continually compares the unamortized costs of capitalized
software to the expected future revenues for the products. If the
unamortized costs exceed the expected future net realizable
value, the excess amount is written off.

      Note 6 - On January 6, 1998, the Company, entered into a
Preferred Stock and Warrant Purchase Agreement (the "Agreement")
with Pequot Private Equity Fund, L.P., a Delaware limited
partnership ("PPEF") and Pequot Offshore Private Equity Fund,
Inc., a British Virgin Islands corporation (together with PPEF,
the "Pequot Entities"). Pursuant to the terms of the Agreement,
on January 7, 1998, the Company sold 1,666,667 shares of Series D
Preferred Stock, at $1.50 per share, and 750,393 Warrants to the
Pequot Entities for an aggregate purchase price of $2,500,000.50.
The Series D Preferred Stock is automatically convertible into
Common Stock on a one-for-one basis, subject to adjustment. In
addition, the Series D Preferred Stock is subject to mandatory
conversion into Common Stock upon certain circumstances. Pursuant
to the Agreement, the Pequot Entities intend to make a second
$2.5 million investment subject to certain terms and
contingencies in the Agreement, including the Company's release
of its SiteMinder 3.0 product and having the product attain an
acceptable level of quality and satisfaction as determined by the
Pequot Entities. As part of the transaction, James McNiel joined
the Board of Directors of the Company, as designee of the Pequot
Entities, and has agreed to provide certain consulting services
to the Company. In addition to consulting fees in connection with
such service, the Company granted Mr. McNiel warrants for the
purchase of 100,000 shares of Common Stock. 

      Note 7 - The Company has adopted American Institute of
Certified Public Accountants Statement of Position 97-2,
"Software Revenue Recognition." Adoption of this pronouncement
did not have a material affect on the revenue recognition
practices of the Company.

      The Company has adopted SFAS No. 130, Reporting
Comprehensive Income, in the quarter ended March 31, 1998. SFAS
130 requires that all items that are required to be recognized
under accounting standards as components of comprehensive income
be reported in a financial statement that is displayed with the
same prominence as other financial statements. The statement
requires that an enterprise classify items of other comprehensive
income by their nature in a financial statement and to display
the accumulated balance of other comprehensive income separately
from retained earnings and additional paid-in capital in the
equity section of a statement of financial position. The Company
believes that the adoption of SFAS 130 will have no material
impact on its financial statements as there are no material
differences between net income and comprehensive income.

      Note 8 - The Company is currently a defendant in two legal
proceedings. The first case involves a suit and countersuit
between the Company and Programmer's Paradise, Inc. ("PPI") of
Shrewsbury, New Jersey. The proceedings are intended to resolve a
valuation dispute of approximately $1,100,000 related to the Net
Assets Transferred to PPI during the 1996 divestiture of The
Software Developer's Company, Inc.

The Company is also a defendant in a suit brought by Lemma, Inc.
a consulting firm doing business in Massachusetts. The suit was
filed over a dispute on amounts due to Lemma, Inc. under a 1996
consulting contract of approximately $33,000. Lemma is also
claiming trebled damages.

The Company's management believes that neither of these cases
will have a material adverse effect on the Company's results of
operations. At this time, the Company cannot predict the outcome
of these cases.


<PAGE>
                        NETEGRITY, INC.




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


OVERVIEW

     The Private Securities Litigation Reform Act of 1995
contains certain safe harbors regarding forward-looking
statements.  In that context, the discussion in this Item
contains forward-looking statements which involve certain degrees
of risk and uncertainties, including statements relating to
liquidity and capital resources.  Except for the historical
information contained herein, the matters discussed in this
section are such forward-looking statements that involve risks
and uncertainties, including the impact of competitive pricing
within the software industry, the effect any reaction to such
competitive pressures has on the need for and effect of any
business restructuring, the presence of competitors with greater
financial resources, capacity and supply constraints or
difficulties, and the Company's continuing need for improved
profitability and liquidity. 

     The Company's revenues were generated by the sale of network
security products, integration and support services to companies
doing business on the Internet and internal networks.  The
Company plans to develop and introduce new products to address
the changing needs of the evolving network security market. 
There can be no assurance that the Company will be able to
develop new products or that such products will achieve market
acceptance, or, if market acceptance is achieved, that the
Company will be able to maintain such acceptance for a
significant period of time.

<PAGE>
RESULTS OF OPERATIONS

    The following information should be read in conjunction with
the consolidated financial statements and notes thereto:

                                               Period to Period %
                                              Increase/(Decrease)
                                               Three Months Ended
For the three months       % to Net Revenue         March 31,
ended March 31,               1998    1997       1998 vs. 1997

Net Revenues:
  Product sales               100%    100%           (18%)

Gross Margins:
  Product sales                57%     46%             3%

  Selling, general and 
  administrative expenses     191%    104%            52%

  Research and development 
   costs                       52%     10%           316%
  Loss from operations       (182%)   (66%)          127%

REVENUES: Net revenues for the first quarter ended March 31, 1998
decreased by $176,773, or 18%, to $809,821 from $986,594 for the
quarter ended March 31, 1997. This decrease is due to a decline
in the Company's firewall reseller business as a result of the
Company's planned de-emphasis on this portion of its business.
This was partially offset by revenue achieved from the Company's
new SiteMinder product and related services in the first quarter
ended March 31, 1998.

GROSS PROFIT: Total Gross Profit dollars for the first quarter
ended March 31, 1998 increased by $11,922, or 3%, to $463,265
from $451,343 for the quarter ended March 31, 1997. This increase
is attributed to the Company's decline in its lower margin
firewall reseller business as described above, and the sale
of its proprietary SiteMinder product and services which yield
higher margins. 

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES:  Selling, general
and administrative expenses for the first quarter ended March 31,
1998 increased by $526,388 or 52%, to $ 1,547,910 from $1,021,522
for the quarter ended March 31, 1997. This increase was a result
of the Company continuing to build its sales and marketing
infrastructure for its SiteMinder product business.

RESEARCH AND DEVELOPMENT COSTS: Research and Development costs
(net of capitalized software) for the first quarter ended March
31, 1998 increased $319,708, or 316% to $420,856 as compared to
$101,148 for the quarter ended March 31, 1997.  The Company
continues to develop and enhance its product line to address the
changing needs of the evolving web access control market. 
Certain research and development expenditures are incurred
substantially in advance of the related revenue, and in some
cases, do not generate revenue.    

INTEREST INCOME: Net interest income (expense) for the first
quarter ended March 31, 1998 decreased $47,092, or 60%, to
$31,970 from $79,062 for the same period last year.  This
decrease is mainly attributable to a lower average cash and
investment portfolio balance.


LIQUIDITY AND CAPITAL RESOURCES

(in thousands, except ratios)

                                        March 31,   December 31,
Financial Condition as of                 1998         1997

  Cash and cash equivalents              $3,020       $2,134
  Working capital                         1,045            9
  Current ratio                            1.30         1.00

Cash Flow Activity Summary for          March 31,     March 31,
the Three Months Ended                    1998          1997

  Net cash (used for) provided by
   continuing operating activities       (1,519)        (784)
  Net cash used for investing 
   activities                               (52)        (233)
  Net cash provided by (used for) 
   financing activities                   2,457          103


     The Company's net cash balance increased by $886,000 to
$3,020,000 at March 31, 1998 from $2,134,000 at December 31,
1997. This increase was attributable to proceeds from a preferred
stock offering entered into with the Pequot Entities on January
6, 1998 (see Note 6), offset by expenditures related to building
its sales, marketing, and development infrastructure for its
SiteMinder product business.

     Accounts receivable-trade (net of allowance for doubtful
accounts) decreased 23% to $611,000 at March 31, 1998 from
$791,000 at December 31, 1997.  This decrease resulted from the
corresponding decrease in net revenues discussed above.

     Working capital increased by $1,036,000 to $1,045,000 at
March 31, 1997 from $9,000 at December 31, 1997.  This increase
was primarily attributable to proceeds from a preferred stock
offering entered into with the Pequot Entities on January 6, 1998
(see Note 6), offset by expenditures related to building its
sales, marketing, and development infrastructure for its
SiteMinder product business.

     On January 6, 1998, the Company, entered into a Preferred
Stock and Warrant Purchase Agreement (the "Agreement") with
Pequot Private Equity Fund, L.P., a Delaware limited partnership
("PPEF") and Pequot Offshore Private Equity Fund, Inc., a British
Virgin Islands corporation (together with PPEF, the "Pequot
Entities"). Pursuant to the terms of the Agreement, on January 7,
1998, the Company sold 1,666,667 shares of Series D Preferred
Stock, at $1.50 per share, and 750,393 Warrants to the Pequot
Entities for an aggregate purchase price of $2,500,000.50. The
Series D Preferred Stock is automatically convertible into Common
Stock on a one-for-one basis, subject to adjustment. In addition,
the Series D Preferred Stock is subject to mandatory conversion
into Common Stock upon certain circumstances. Pursuant to the
Agreement, the Pequot Entities intend to make a second $2.5
million investment subject to certain terms and contingencies in
the Agreement, including the Company's release of its SiteMinder
3.0 product and having the product attain an acceptable level of
quality and satisfaction as determined by the Pequot Entities.

     The Company anticipates that its existing cash resources,
anticipated cash flow from operations, and the proposed
additional financing described above will be sufficient to fund
its operations through the Company's current fiscal year ending
December 31, 1998.  <PAGE>
                   PART II. - OTHER INFORMATION




ITEM 1.   LEGAL PROCEEDINGS

      There have been no significant changes to the Company's
outstanding litigation since the filing of the Company's Form
10-K for the twelve months ended December 31, 1997.




ITEM 2.   CHANGES IN SECURITIES

      During the quarter ended March 31, 1998, the Company issued
1,666,667 shares of Series D Preferred Stock, par value $.01 as
described in Note 6.




ITEM 3.   DEFAULTS UPON SENIOR SECURITIES

      Not applicable.



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

      No matters were submitted to a vote of security holders,
whether through the solicitation of proxies or otherwise, during
the quarter ended March 31, 1998.



ITEM 5.   OTHER INFORMATION

     Not applicable.



ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K

     (a)  Exhibit 11.00 - Computation of Earnings Per Share.
     
     (b)  Exhibit 27.00 - Financial Data Schedule (Edgar only).

     (c)  The Company filed a report on Form 8-K dated January
15, 1998 announcing a Preferred Stock and Warrant Purchase
agreement with the Pequot Entities as described in Note 6.
<PAGE>
                            SIGNATURES


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



                                   NETEGRITY, INC.


Date: May 14, 1998                 By:  /s/Barry N. Bycoff
                                        Barry N. Bycoff
                                        President and Chief
                                        Executive Officer
                                        (Principal Executive
                                        Officer)




Date: May 14, 1998                 By:  /s/ James E. Hayden
                                        James E. Hayden
                                        Vice President, Finance
                                        and Administration, and
                                        Chief Financial Officer
                                        (Principal Financial and
                                        Chief Accounting Officer)
<PAGE>
                                                  EXHIBIT 11.00

 
                        NETEGRITY, INC.

               COMPUTATION OF EARNINGS PER SHARE

                          (UNAUDITED)

             (In thousands, except per share data)


                                           Three months ended
                                                March 31,
                                            1998       1997

BASIC:

Average Common shares outstanding          9,284       9,262

Net loss                                 $(1,474)      $(648)

Per share amount                          $(0.16)     $(0.07)


DILUTED:

Average Common shares outstanding          9,284       9,262

Net effect of dilutive stock 
  options and warrants based on 
  treasury stock method                      ---         ---

  Total                                    9,284       9,262

Net loss                                 $(1,474)      $(648)

Per share amount                          $(0.16)     $(0.07)