Enterprise software is one of the technologies that has changed the way business is conducted. Software applications such as enterprise resource planning, or ERP, customer relationship management, or CRM, supply chain management, or SCM, and human resource management systems, or HRMS, have automated processes, enhanced collaboration among diverse business functions and provided greater visibility and control over the operations of the business. These applications provide a significant competitive advantage to businesses, allowing them to reach a broader customer base, provide better customer service, improve the speed and cost of procuring goods and services and better manage the finance- and employee-related aspects of their businesses. According to IDC, revenues from the sale of enterprise software applications is expected to grow from approximately $68 billion in 2001 to $108 billion in 2005.

As businesses' reliance on enterprise software and related infrastructure continues to increase, so does the demand for effective software to manage the technology chain. IDC estimates that the market for technology chain management software applications will grow at a compound annual growth rate of approximately 76% from $207 million in 2001 to more than $2.0 billion by 2005.

include Dashboard software beginning in the fourth quarter of 2001.

The Company’s Create is an enterprise request process management software that allows companies to standardize technology-based processes by automating and managing request and requirement aggregation, prioritization and approval. This software allows an organization to model its request processes for managing technology initiatives from inception to implementation using a graphical workflow business modeler. Complex business rules can be modeled using flexible approval methods, prioritization and delegation features that allow requests to advance efficiently through their specific workflow, routing them to relevant departments, groups or individuals.

The Company’s Drive is an initiative management software that enables organizations to streamline and standardize the planning, tracking and execution of technology initiatives. This software enables organizations to streamline and standardize the management of project activities using a workflow-based, collaborative approach. Projects and initiatives are defined as a hierarchical structure of projects and sub-projects that logically group and organize tasks or activities. The software enables users to define the step-by-step processes required to complete specific project tasks and deliverables.

The Company’s Deliver is a deployment management software that enables IT to automate and manage the migration, staging and

deployment of technologies. This software is designed to automate the deployment of technology-based solutions. The components of a business system created or modified by a particular initiative are grouped into Deliver packages. These packages have workflows associated with them that automate the process of moving each package through the required steps such as system review, sign-off, quality assurance and deployment.

The Company’s Accelerators provide built-in best practices and automation for specific application technologies. This software enables technology professionals to reduce the time they spend performing routine, labor-intensive tasks. It incorporate application-specific information including the appropriate syntax, reporting and error handling required for task automation of the deployment and

post-deployment steps of components, files and patches.

The Company’s Dashboard is a real-time technology chain management portal that is designed to provide a single point of visibility and control over IT initiatives and operational tasks. Visual displays and exception reports will be able to be personalized to an individual's role. Currently in development, the Dashboard is designed to provide a single point of visibility and control over technology-based initiatives and IT operational tasks. Visual displays will be personalized to an individual's role to bring relevant summary information and to document exceptions.

Total cost of revenues increased 93% from $2.9 million for the three months ended March 31, 2000 to $5.6 million for the three months ended March 31, 2001.

Sales and marketing expenses increased 190% from $2.9 million for the three months ended March 31, 2000 to $8.4 million for the three months ended March 31, 2001.

Research and development expenses increased 69% from $1.6 million for the three months ended March 31, 2000 to $2.7 million for the three months ended March 31, 2001.

Other income (expense), net, was $(55.0 thousand) for the three months ended March 31, 2000 and $101.0 thousand for the three months ended March 31, 2001.