1
                                    
                                    
                              UNITED STATES
                   SECURITIES AND EXCHANGE COMMISSION
                         WASHINGTON, D.C. 20549


                                FORM 10-Q
                                    
                                    
(Mark One)
 [X}    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                    SECURITIES EXCHANGE ACT OF 1934
                                   
           For the quarterly period ended September 30, 1998
                                   
                                  OR
                                   
 [ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
                    SECURITIES EXCHANGE ACT OF 1934
                                   
                   Commission file number:  0-20853
                                   
                              ANSYS, Inc.
        (exact name of registrant as specified in its charter)
                                   
                DELAWARE                    04-3219960
       (State or other jurisdiction of    (IRS Employer
        incorporation or organization)     Identification No.)
       
       275 Technology Drive, Canonsburg, PA            15317
       (Address of principal executive offices)      (Zip Code)
                                   
                             724-746-3304
         (Registrant's telephone number, including area code)
       
       Indicate by a 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
            ----     ----
       
       The number of shares of the Registrant's Common Stock,
       par value $.01 per share, outstanding as of November 6,
       1998 was 16,381,458 shares.

                                    
                                
                  ANSYS, INC. AND SUBSIDIARIES

                              INDEX


                                                      Page No.
 PART I.       FINANCIAL INFORMATION                  ---------
                                                         
Item 1.        Financial Statements                      
                                                         
               Condensed Consolidated Balance Sheets -      
               September 30, 1998 and December 31, 1997    2
                                                         
               Condensed Consolidated Statements of         
               Income and Comprehensive Income - Three      
               and Nine Months Ended September 30, 1998     
               and September 30, 1997                      3
                                                         
               Condensed Consolidated Statements of         
               Cash Flows - Nine Months Ended September     
               30, 1998 and September 30, 1997             4
                                                         
               Notes to Condensed Consolidated              
               Financial Statements                        5
                                                         
               Review Report of Independent Accountants    6
                                                         
Item 2.        Management's Discussion and Analysis of      
               Financial Condition and Results of           
               Operations                                 7-13
                                                            
                                                            
PART II.       OTHER INFORMATION                            
                                                            
Item 2.        Changes in Securities                       14
                                                            
Item 6.        Exhibits and Reports on Form 8-K            15
                                                            
SIGNATURES                                                 16
                                                         
EXHIBIT INDEX                                              17


Trademarks used in this Form 10-Q: ANSYS(r) and DesignSpace(r) are
registered trademarks of SAS IP, Inc., a wholly-owned subsidiary
of ANSYS, Inc.
                                
                 PART I - FINANCIAL INFORMATION
Item 1. - Financial Statements:
                  ANSYS, INC. AND SUBSIDIARIES
              CONDENSED CONSOLIDATED BALANCE SHEETS
            (in thousands, except share information)

                                            Sept. 30,      Dec. 31,
                                              1998           1997
                                          ------------    ----------
                 ASSETS                    (unaudited)         
Current assets:                                                
Cash and cash equivalents                  $     4,751     $  13,990
Short-term investments                          35,275        13,853
Accounts receivable, less allowance for                             
  doubtful accounts of $1,750 in 1998 and                           
  $2,080 in 1997                                 7,326         8,034
Other current assets                               832           926
Deferred income taxes                               80           125
                                             ---------     ---------
          Total current assets                  48,264        36,928
Securities available for sale                      182           182
Property and equipment, net                      3,937         4,771
Capitalized software costs, net of                                  
  accumulated amortization of $15,562 in                            
  1998 and $15,471 in 1997                         491           260
Other intangibles, net                           1,994         2,374
Deferred income taxes                            8,524         9,066
                                           -----------     ---------
          Total assets                      $   63,392     $  53,581
                                           ===========     =========
                                                               
  LIABILITIES AND STOCKHOLDERS' EQUITY                         
Current liabilities:                                           
Accounts payable                            $      229     $     235
Accrued bonuses                                  1,831         2,133
Other accrued expenses and liabilities           3,277         2,562
Accrued income taxes payable                       248            46
Customer prepayments                               474           746
Deferred revenue                                 8,329         7,445
                                           -----------     ---------
          Total Current liabilities             14,388        13,167
Stockholders' equity:                                               
Preferred stock, $.01 par value,                                    
  2,000,000 shares authorized                        -             -
Common stock, $.01 par value; 50,000,000                            
  shares authorized; 16,390,232 and                                 
16,359,134 shares issued in 1998 and 1997          164           164
Additional paid-in capital                      36,474        36,089
Less treasury stock, at cost:  11,874                               
  shares held in 1998 and 68,800 shares                             
  held in 1997                                     (5)          (12)
Retained earnings                               12,525         4,327
Accumulated other comprehensive income             120           120
Notes receivable from stockholders               (274)         (274)
                                           -----------     ---------
         Total stockholders' equity             49,004        40,414
                                           -----------     ---------
Total liabilities and stockholders' equity $    63,392     $  53,581
                                           ===========     =========
 
 The accompanying notes are an integral part of the condensed
               consolidated financial statements.
                                



                  ANSYS, INC.AND SUBSIDIARIES
           CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                    AND COMPREHENSIVE INCOME
              (in thousands, except per share data)
                           (Unaudited)
                                                                                        
                                         
                                         
                                          Three months ended          Nine months ended
                                         ----------------------    ---------------------
                                         Sept. 30,    Sept. 30,    Sept. 30,  Sept. 30,
                                            1998        1997          1998       1997
                                         ----------   ----------   ---------  ----------
                                                                   

 Revenue:                                                                               
     Software licenses                   $    7,884   $    7,309   $  25,661   $  25,249
     Maintenance and service                  5,623        4,180      15,635      10,811
                                         ----------   ----------   ---------   ---------
      Total revenue                          13,507       11,489      41,296      36,060
                                                                                        
 Cost of sales:                                                                         
     Software licenses                          818          669       2,552       2,024
     Maintenance and service                    697          595       1,987       1,757
                                          ---------    ---------   ---------   ---------
      Total cost of sales                     1,515        1,264       4,539       3,781
                                          ---------    ---------   ---------   ---------
 Gross profit                                11,992       10,225      36,757      32,279
                                                                                        
 Operating expenses:                                                                    
     Selling and marketing                    3,225        2,746       9,448       8,470
     Research and development                 2,663        2,538       8,694       8,341
     Amortization                               218          177         661       2,607
     General and administrative               2,309        2,260       6,990       6,124
                                          ---------    ---------   ---------   ---------
      Total operating expenses                8,415        7,721      25,793      25,542
                                          ---------    ---------   ---------   ---------
 Operating income                             3,577        2,504      10,964       6,737
                                                                                        
 Other income                                   533          225       1,398         646
                                          ---------    ---------   ---------   ---------
 Income before income tax provision           4,110        2,729      12,362       7,383
                                                                                        
 Income tax provision                         1,400        1,010       4,165       2,730
                                          ---------    ---------   ---------   ---------
 Net income                                   2,710        1,719       8,197       4,653
                                                                                        
 Other comprehensive income(loss),                                                      
 net of tax:
 Unrealized losses on securities                  -            -           -       (200)
                                         ==========   ==========   =========   =========
 Comprehensive income                    $    2,710  $     1,719   $   8,197   $   4,453
                                         ==========   ==========   =========   =========
 Net income per basic common share:                                                     
     Basic earnings per share            $     0.17  $      0.11   $    0.51   $    0.30
     Weighted average shares - basic         16,080       15,743       16,006     15,671
                                         ----------   ----------   ----------  ---------
 Net income per diluted common share:                                                   
     Diluted earnings per share          $     0.16  $      0.10   $    0.49  $     0.28
     Weighted average shares - diluted       16,672       16,838      16,634      16,681
                                         ----------   ----------   ----------  ---------

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

                                



                  ANSYS, INC. AND SUBSIDIARIES
         CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                         (in thousands)
                           (unaudited)
                                                           Nine months ended
                                                         ------------------
                                                         Sept 30,    Sept 30,
                                                           1998        1997
                                                         ---------   ---------
  Cash flows from operating activities:                              
  Net income                                              $  8,197    $  4,653
  Adjustments to reconcile net income to net cash                             
  provided by operating activities:
        Depreciation and amortization                        2,012       3,600
        Deferred income tax provision                          587         150
        Provision for bad debts                                545         650
  Change in operating assets and liabilities:                                 
        Accounts receivable                                    164          85
        Income taxes                                           202       (685)
        Other current assets                                    94       (644)
        Accounts payable, accrued expenses and                                
         liabilities and customer prepayments                  135     (1,425)
        Deferred revenue                                       884       3,305
                                                         ---------   ---------
           Net cash provided by operating activities        12,820       9,689
                                                         ---------   ---------
  Cash flows from investing activities:                                       
        Capital expenditures                                 (707)     (1,935)
        Capitalization of internally developed software                       
         costs                                               (322)       (229)
        Proceeds from maturities of short-term                                
         investments                                         6,248           -
        Purchase of short-term investments                (27,670)    (10,442)
                                                         ---------   ---------
           Net cash used in investing activities          (22,451)    (12,606)
                                                         ---------   ---------
  Cash flows from financing activities:                                       
        Proceeds from issuance of common stock under                          
         employee stock purchase plan                          168         125
        Proceeds from issuance of treasury stock               201           -
        Proceeds from exercise of stock options                 28         206
        Repayment of stockholder notes                           -          28
        Purchase of Treasury stock                             (5)           -
                                                         ---------   ---------
           Net cash provided by financing activities           392         359
                                                         ---------   ---------
  Net decrease in cash and cash equivalents                (9,239)     (2,558)
  Cash and cash equivalents, beginning of period            13,990      17,069
                                                         ---------   ---------
  Cash and cash equivalents, end of  period               $  4,751   $  14,511
                                                         =========   =========
  Supplemental disclosures of cash flow information:                          
    Cash paid during the period for:                                          
      Income taxes                                        $  2,695    $  3,380
  Supplemental non cash investing and financing                               
   activities:
      Decrease in securities available for sale                  -       (200)

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




                  ANSYS, INC. AND SUBSIDIARIES
      NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                       SEPTEMBER 30, 1998
                           (UNAUDITED)


1. BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial
statements included herein have been prepared by ANSYS, Inc. (the
"Company") in accordance with generally accepted accounting
principles for interim financial information for commercial and
industrial companies and the instructions to Form 10-Q and Rule
10-01 of Regulation S-X.  The financial statements as of and for
the three and nine months ended September 30, 1998 should be read
in conjunction with the Company's consolidated financial
statements (and notes thereto) included in the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1997.
Accordingly, the accompanying statements do not include all of
the information and footnotes required by generally accepted
accounting principles for complete financial statements.  In the
opinion of management, all adjustments considered necessary for a
fair presentation of the financial statements have been included,
and all adjustments are of a normal and recurring nature.
Operating results for the three months and nine months ended
September 30, 1998 are not necessarily indicative of the results
that may be expected for the year ending December 31, 1998.


2.   NET INCOME PER SHARE

Effective December 31, 1997, the Company adopted Statement of
Financial Accounting Standards No.128, "Earnings per Share."  The
Statement requires the disclosure of basic and diluted earnings
per share and revises the method required to calculate these
amounts under previous standards. Earnings per share data for the
three and nine month periods ended September 30, 1997 have been
restated to reflect the adoption of this Statement.  The adoption
of this standard did not materially impact previously reported
earnings per share for the three and nine months periods ended
September 30, 1997. The total shares issuable upon exercise of
dilutive stock options and outstanding shares of restricted
stock, which are included in the calculation of diluted earnings
per share, totaled 592,000 and 1,095,000 and 628,000 and
1,010,000 for the three and nine month periods ended September
30, 1998 and 1997, respectively.




                                
                                
                                
                                
            REVIEW REPORT OF INDEPENDENT ACCOUNTANTS

                                

To the Shareholders and Board of Directors of
  ANSYS, Inc. and Subsidiaries:


We have reviewed the condensed consolidated balance sheet of
ANSYS, Inc. and Subsidiaries as of September 30, 1998, the
related condensed consolidated statements of income and
comprehensive income for the three-month and nine-month periods
ended September 30, 1998 and 1997, and condensed consolidated
cash flows for the nine-month periods ended September 30, 1998
and 1997. These financial statements are the responsibility of
ANSYS's management.

We conducted our review in accordance with standards established
by the American Institute of Certified Public Accountants. A
review of interim financial information consists principally of
applying analytical procedures to financial data and making
inquiries of persons responsible for financial and accounting
matters.  It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing
standards, the objective of which is an expression of an opinion
regarding the financial statements taken as a whole.
Accordingly, we do not express an opinion.

Based on our review, we are not aware of any material
modifications that should be made to the condensed consolidated
financial statements referred to above for them to be in
conformity with generally accepted accounting principles.

We have previously audited, in accordance with generally accepted
auditing standards, the consolidated balance sheet of ANSYS, Inc.
and Subsidiaries as of December 31, 1997, and the related
consolidated statements of operations, stockholders' equity and
cash flows for the year then ended (not presented herein).  In
our report dated January 29, 1998, we expressed an unqualified
opinion on those consolidated financial statements. In our
opinion, the information set forth in the accompanying condensed
consolidated balance sheet as of December 31, 1997, is fairly
stated, in all material respects, in relation to the consolidated
balance sheet from which it has been derived.




/s/ PricewaterhouseCoopers LLP
- -----------------------------
Pittsburgh, Pennsylvania
October 20, 1998







Item 2.
             MANAGEMENT'S DISCUSSION AND ANALYSIS OF
          FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                
ANSYS, Inc. (the "Company") is a leading international supplier
of analysis and engineering software for optimizing the design of
new products.  The Company is committed to providing the most
open and flexible analysis solutions to suit customer
requirements for engineering software in today's competitive
marketplace.  In addition, the Company partners with leading
design software suppliers to develop state-of-the-art computer-
aided design ("CAD") integrated products.  A global network of
ANSYS Support Distributors ("ASDs") provides sales, support and
training for customers.  Additionally, the Company distributes
its DesignSpace(r) products through its global network of ASDs, as
well as a network of independent distributors and dealers (value-
added resellers or "VARs") who support sales of DesignSpace(r)
products to end users throughout the world. The following
discussion should be read in conjunction with the attached
unaudited condensed consolidated financial statements and notes
thereto for the three-month and nine-month periods ended
September 30, 1998 and September 30, 1997 and with the Company's
audited financial statements and notes thereto for the fiscal
year ended December 31, 1997.

This Form 10-Q contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and Section
21E of the Securities Exchange Act of 1934, including statements
which contain such words as "anticipate", "intend", "believe",
"plan" and other similar expressions.  The Company's actual
results could differ materially from those set forth in the
forward-looking statements.  Certain factors that might cause
such a difference include uncertainties regarding customer
acceptance of new products, possible delays in developing,
completing or shipping new or enhanced products, potential
volatility of revenues and profit in any period due to, among
other things, lower than expected demand for or the ability to
complete large contracts, regional economies, Year 2000 readiness
status, as well as other risks and uncertainties that are
detailed in the "Management's Discussion and Analysis of
Financial Condition and Results of Operations" section in the
1997 Annual Report to Shareholders , and in the statement of
"Certain Factors Affecting Future Results" included herein as
Exhibit 99 to this Form 10-Q.

Results of Operations

Three Months Ended September 30, 1998 Compared to Three Months
Ended September 30, 1997

Revenue.  The Company's total revenue for the 1998 quarter
increased 17.6% to $13.5 million from $11.5 million for the 1997
quarter.  The increase was primarily related to an increase in
maintenance revenue, which resulted from broader customer usage
of maintenance and support services and the Company's continued
emphasis on marketing and promoting these services.  The increase
in revenue for the 1998 quarter was also attributable, to a
lesser extent, to an increase in sales of paid-up licenses, as
discussed in further detail below.

Software license revenue totaled $7.9 million for the 1998
quarter as compared to $7.3 million for the 1997 quarter, a 7.9%
increase. This increase principally resulted from a 15.7%
growth in paid-up license revenue to $4.4 million for the 1998
quarter from $3.8 million for the 1997 quarter, primarily in
international markets.  Total combined revenue from monthly and
noncancellable annual leases remained stable at $3.5 million for
each of the 1998 and 1997 quarters.  While the Company
experienced a $1.3 million decrease in monthly lease revenue in
the 1998 third quarter as compared to the 1997 third quarter,
this was completely offset by a $1.3 million increase in revenue
attributable to the portion of noncancellable annual license fees
which are recognized as paid-up revenue upon renewal or inception
of the lease.  The Company anticipates that revenue from monthly
leases will continue to decline as existing leases are renewed,
and new leases are sold, as noncancellable annual leases, and to
a lesser extent certain monthly leases are converted to paid-up
licenses.

Maintenance and service revenue increased 34.5% for the 1998
quarter to $5.6 million from $4.2 million for the 1997 quarter,
as a result of broader customer usage of maintenance and support
services and the Company's increased emphasis on marketing and
promoting these services, as well as an increase in the renewal
and sale of noncancellable annual leases.

Of the Company's total revenue for the 1998 quarter,
approximately 54.2% and 45.8%, respectively, were attributable to
international and domestic sales, as compared to 53.3% and 46.7%,
respectively, for the 1997 quarter.

Cost of Sales and Gross Profit.  The Company's total cost of
sales increased 19.9% to $1.5 million, or 11.2% of total revenue,
for the 1998 quarter from $1.3 million, or 11.0% of total
revenue, for the 1997 quarter. The Company's cost of sales for
software license revenue increased 22.3% for the 1998 quarter to
$818,000, or 10.4% of software license revenue, from $669,000, or
9.2% of software license revenue, for the 1997 quarter. The
increase was principally attributable to additional headcount and
related costs. The Company's cost of sales for maintenance and
service revenue, which totaled $697,000 and $595,000, or 12.4%
and 14.2% of maintenance and service revenue, for the 1998 and
1997 quarters, respectively, also increased due to additional
headcount and related costs, and to a lesser extent due to
increased consulting fees in the 1998 third quarter.

As a result of the foregoing, the Company's gross profit
increased 17.3% to $12.0 million for the 1998 quarter from $10.2
million for the 1997 quarter.

Selling and Marketing.  Selling and marketing expenses increased
17.4% for the 1998 quarter to $3.2 million from $2.7 million for
the 1997 quarter, or 23.9% of total revenue for both the 1998 and
1997 quarters. During the 1998 quarter, the Company experienced
an increase in expenses directly associated with its worldwide
users' conference, in addition to increased expenses associated
with strategic office locations in the United Kingdom, China and
Japan, as compared to the 1997 quarter.

Research and Development.  Research and development expense
totaled $2.7 million and $2.5 million for the 1998 and 1997
quarters, or 19.7% and 22.1% of total revenue, respectively, and
exclude costs which are capitalized in accordance with Financial
Accounting Standards No.86. The increase in research and
development expense in the 1998 quarter was primarily
attributable to increased consulting fees and developers'
salaries as compared to the 1997 quarter.  The 1998 and 1997
quarters exclude capitalized internal software costs of
approximately $280,000 and $90,000, respectively. The amount of
capitalized software development costs will vary among quarters
depending upon the stage of the development cycle which the
Company has reached in connection with future commercial product
releases.

Amortization.  Amortization expense remained relatively
consistent at $218,000 and $177,000 in the 1998 and 1997 quarter,
respectively.

General and Administrative.  General and administrative expenses
have remained stable at $2.3 million, or 17.1% and 19.7% of total
revenue for the 1998 and 1997 quarters, respectively.

Other Income.  Other income increased 136.9% to $533,000 for the
1998 quarter as compared to $225,000 for the 1997 quarter.  This
increase was attributable to higher interest-bearing cash and
short-term investment balances in the 1998 quarter.

Income Tax Provision.  The Company's effective rate of taxation
was 34.1% for the 1998 quarter as compared to 37.0% for the 1997
quarter.  This percentage is less than the federal and state
combined statutory rate due primarily to the utilization of
research and experimentation credits, as well as the use of a
foreign sales corporation, which was established in the fourth
quarter of 1997 and is the primary reason for the decrease in the
Company's effective tax rate in the 1998 quarter.

Net Income.  The Company's net income in the third quarter of
1998 was $2.7 million as compared to $1.7 million in the third
quarter of 1997.  Diluted earnings per share increased to $0.16
in the 1998 quarter as compared to $0.10 in the 1997 quarter. The
increase in diluted earnings per share is attributable to the
increase in net income. The weighted average shares outstanding
used in computing net income per diluted common share totaled
16,672,000 and 16,838,000 in the 1998 and 1997 quarter,
respectively.


Nine Months Ended September 30, 1998 Compared to Nine Months
Ended September 30, 1997

Revenue.  The Company's total revenue increased 14.5% for the
1998 nine months to $41.3 million from $36.1 million for the 1997
nine months. This increase was attributable principally to an
increase in revenue from renewals and sales of leases as
noncancellable annual leases, for which a portion of the annual
license fee is recognized as paid-up revenue upon renewal or
inception of the lease, while the remaining portion is recognized
as maintenance revenue ratably over the remaining lease period.
This increase, which was partially offset by a decrease in
monthly lease revenue, as discussed in the paragraph below, was
due, in part, to the active sales and licensing of noncancellable
annual leases to existing and new lease customers.  The increase
in revenue in the 1998 nine months was also attributable to
increased maintenance revenue, which resulted from broader
customer usage of maintenance and support services and the
Company's continued emphasis on marketing and promoting its
maintenance services.

Software license revenue totaled $25.7 million for the 1998 nine
months as compared to $25.2 million for the 1997 nine months, an
increase of 1.6 %.  The increase resulted principally from an
increase in revenue from renewals and sales of leases as
noncancellable annual leases, and to a lesser extent, an increase
in sales of paid-up licenses in international markets. Revenue
from the sale of paid-up licenses and the portion of
noncancellable annual leases classified as paid-up revenue,
increased 35.0% for the 1998 nine months to $20.9 million from
$15.4 million for the 1997 nine months. This increase was
partially attributable to a refinement of management's estimate
relative to the allocation of noncancellable annual lease revenue
between paid-up and maintenance revenue, which occurred in the
first quarter of 1998.  The refinement, which management believes
more accurately reflects the Company's current pricing and
business practices, resulted in a net revenue increase of
approximately $1.1 million in the 1998 nine months, of which
approximately $980,000 was recorded in the first quarter of 1998.

The increase discussed above was partially offset by a 51.0%
decrease in monthly lease license revenue to $4.8 million for the
1998 nine months from $9.8 million for the 1997 nine months. This
decrease was attributable to both an increase in the renewal of
existing monthly leases as noncancellable annual leases, and to a
lesser extent the conversion of certain existing lease licenses
to paid-up licenses throughout the course of the past year.

Maintenance and service revenue increased 44.6% for the 1998 nine
months to $15.6 million from $10.8 million for the 1997 nine
months, as a result of broader customer usage of maintenance and
support services and the Company's increased emphasis on
marketing and promoting these services, as well as an increase in
the renewal and sale of noncancellable annual leases.

Of the Company's total revenue for the 1998 nine months,
approximately 53.6% and 46.4%, respectively, were attributable to
international and domestic sales, as compared to 53.1% and 46.9%,
respectively, for the 1997 nine months.

Cost of Sales and Gross Profit.  The Company's total cost of
sales increased 20.0% to $4.5 million, or 11.0% of total revenue,
for the 1998 nine months from $3.8 million, or 10.5% of total
revenue, for the 1997 nine months. The Company's cost of sales
for software license revenue increased 26.1% for the 1998 nine
months to $2.6 million, or 9.9% of software license revenue, from
$2.0 million, or 8.0% of software license revenue, for the 1997
nine months.  The increase was due to the addition of headcount
and related expenses, as well as increased costs associated with
the printing of manuals, packing supplies, media and royalty
fees.  The Company's cost of sales for maintenance and service
revenue totaled $2.0 million and $1.8 million, or 12.7% and 16.3%
of maintenance and service revenue, for the 1998 and 1997 nine
months, respectively.  The increase in the 1998 period was
principally attributable to increases in salaries, benefits and
consulting fees as additional staff and consultants have been
added to support the growth in global service revenue and related
customer and ASD support needs.

As a result of the foregoing, the Company's gross profit
increased 13.9% to $36.8 million for the 1998 nine months from
$32.3 million for the 1997 nine months.

Selling and Marketing.  Selling and marketing expenses increased
11.5% for the 1998 nine months to $9.4 million, or 22.9% of total
revenue, from $8.5 million, or 23.5% of total revenue, for the
1997 nine months. The increase in selling and marketing expenses
resulted primarily from increased consulting and sales support
costs incurred in connection with supporting its global sales and
marketing infrastructure.   Additionally, during the 1998 nine
month period the Company also experienced an increase in expenses
directly associated with its worldwide users' conference and
increased expenses associated with strategic office locations in
the United Kingdom, China and Japan, as compared to the 1997 nine
month period.

Research and Development.  Research and development expenses
increased 4.2% for the 1998 nine months to $8.7 million, or 21.1%
of total revenue, from $8.3 million, or 23.1% of total revenue,
for the 1997 nine months.  This increase resulted primarily from
a growth in computer software costs and hardware related
depreciation expense as the Company continues to invest in
software and hardware tools used to develop and enhance the
Company's products, as well as increased consulting costs
associated with the releases of ANSYS 5.5 and DesignSpace 4.1.

Amortization.  Amortization expense totaled $661,000 for the 1998
nine months as compared to $2.6 million for the 1997 nine months.
The decrease was attributable to the full amortization of certain
intangible assets, including goodwill and capitalized software,
during the first quarter of 1997.

General and Administrative.  General and administrative expenses
increased 14.1% for the 1998 nine months to $7.0 million, or
16.9% of total revenue, from $6.1 million, or 17.0% of total
revenue, for the 1997 nine months. The increase is primarily
attributable to an increase in headcount and related expenses as
the Company has added internal information technology, finance
and administrative resources to support its global operations and
infrastructure. In addition, during the 1998 nine months, the
Company experienced an increase in legal fees related to a
dispute regarding the expiration of an ASD distribution
agreement.  These increases were partially offset by a decrease
in bad debt expense.

Other Income.  Other income increased 116.4% to $1.4 million for
the 1998 nine month period as compared to $646,000 for the 1997
nine month period.  This increase was attributable to higher
interest-bearing cash and short-term investment balances in 1998.

Income Tax Provision. The Company's effective rate of taxation
was 33.7% for the 1998 nine months, as compared to 37.0% for the
1997 nine months. These percentages are less than the federal and
state combined statutory rate due primarily to the utilization of
research and experimentation credits, as well as the use of a
foreign sales corporation, which was established in the fourth
quarter of 1997 and is the primary reason for the decrease in the
Company's effective tax rate in the 1998 nine months.

Net Income.  The Company's net income in the nine months of 1998
totaled $8.2 million as compared to net income of $4.7 million in
the 1997 nine months.  Diluted earnings per share increased to
$0.49 in the 1998 nine months as compared to diluted earnings per
share of $0.28 in the 1997 nine months as a result of the
increase in net income. The weighted average shares used in
computing net income per diluted share totaled 16,634,000 in the
1998 nine month period and 16,681,000 in the 1997 nine month
period.


Liquidity and Capital Resources

As of September 30, 1998, the Company had cash, cash equivalents
and short-term investments totaling $40.0 million and working
capital of $33.9 million, as compared to cash, cash equivalents
and short-term investments of $27.8 million and working capital
of $23.8 million at December 31, 1997.

The Company's operating activities provided cash of $12.8 million
for the nine months ended September 30, 1998 and $9.7 million for
the nine months ended September 30, 1997.  The increase in the
Company's cash flow from operations for the 1998 nine months as
compared to the 1997 nine months was a result of increased
earnings as well as improved management of working capital.  Net
cash generated by operating activities provided sufficient
resources to fund increased headcount and capital needs to
support the Company's expansion of its global infrastructure and
continued investment in research and development activities for
the nine months ended September 30, 1998.

Cash used in investing activities totaled $22.5 million for the
nine months ended September 30, 1998 and $12.6 million for the
nine months ended September 30, 1997. The increase is principally
due to the purchase of short-term investments in the nine months
ended September 30, 1998.  Capital expenditures in 1997 have been
primarily related to furniture and equipment for the new
corporate office facility, which the Company initially occupied
in February 1997, as well as computer hardware and software to
support the continued growth of the Company's development
activities and the expansion of its global sales and support
infrastructure.  The Company currently plans additional capital
spending of approximately $250,000 throughout the remainder of
1998, however, the level of spending will be dependent upon
various factors, including growth of the business and general
economic conditions.

Financing activities provided net cash of $392,000 for the nine
months ended September 30, 1998 and $359,000 for the nine months
ended September 30, 1997.  Cash provided from financing
activities for the 1998 and 1997 nine month periods primarily
included proceeds from issuance of treasury stock and common
stock under employee stock option and purchase plans.




Management's Assessment of Year 2000 Readiness.

The subsequent "Year 2000 ("Y2K")" discussion contains various
forward-looking statements which represent the Company's beliefs
or expectations regarding future events.  When used in the "Year
2000" discussion, the words "believe," "expects," "estimates" and
other similar expressions are intended to identify forward-
looking statements. Forward-looking statements include, without
limitation, the Company's expectations as to when it and its
significant distributors, customers and suppliers will complete
the implementation and compliance phases of the Y2K Plan, as well
as its Year 2000 contingency plans; its estimated costs related
to the Y2K Plan; and the Company's belief that its internal
systems and equipment will be Year 2000 compliant in a timely
manner.  All forward-looking statements involve a number of risks
and uncertainties that could cause the actual results to differ
materially from the projected results. Factors that may cause
these differences include, but are not limited to, the
availability of qualified personnel and other information
technology resources; the ability to identify and remediate all
date sensitive lines of code or to replace embedded chips in
affected systems or equipment; unanticipated delays or expenses
related to remediation; and the actions of independent third
parties with respect to Year 2000 problems.

The statements in the following section include "Year 2000
readiness disclosure" within the meaning of the Year 2000
Information and Readiness Disclosure Act of 1998.

The "Year 2000" problem refers to the inability of software to
process date information later than December 31, 1999.  Date
codes in many software programs are abbreviated to allow only two
digits for the year. Software with date-sensitive functions that
is not year 2000 compliant may not be able to distinguish whether
"00" means 1900 or 2000. When that happens, some software will
not work at all and other software will suffer critical
calculation and other processing errors.  Hardware and other
products with embedded chips may also experience problems.
            
Company's Software Products:
The Company provides analysis and engineering software for
optimizing the design of new products.  The functionality offered
by these products is generally not date dependent and
consequently the Company's software products have minimal date
sensitivities or dependencies.

The current releases of the Company's ANSYS Family of Products
and the DesignSpace products are Y2K Compliant, as defined below.
Management believes that essentially 100% of its year-to-date
1998 license and service revenue has been derived from the sale
of Y2K Compliant products and services.   The Company defines
"Y2K Compliant" as meaning the ability to meet the British
Standards Institution DISC PD2000-1: Year 2000 conformity
requirements.  This definition provides that Year 2000 conformity
shall mean that neither performance nor functionality is affected
by dates prior to, during and after the year 2000.

The Company began shipping Y2K Compliant ANSYS Family of Products
beginning in 1997 with Release 5.4.   The Company began shipping
Y2K Compliant DesignSpace products beginning in 1996 with Release
2.0.  The Company believes that versions of the ANSYS Family of
Products shipped between 1993 through 1996 should work past
December 31, 1999.  However, the Company cannot make a definitive
statement regarding these products because they have not been
tested on all platforms or on all versions of operating systems.
Consequently, the Company has advised its customers who may still
be running these older versions to (a) upgrade to later releases
of the Company's software, and (b) verify that their platforms
and operating systems support the transition to the year 2000.
ANSYS Family of Products shipped prior to 1993 will not work
after December 31, 1999 and ANSYS has continually advised its
customers to upgrade such products to newer versions.

Some commentators have predicted significant litigation regarding
Y2K compliance issues, and the Company is aware of such lawsuits
against other software vendors. Because of the unprecedented
nature of such litigation, it is uncertain whether, or to what
extent, the Company may be affected. However, at this time the
Company believes that the existence of earlier versions of its
products that are not Y2K compliant is not likely to have a
material adverse effect on the Company or its operations.


Company's Internal Systems:
The Company has developed a Year 2000 Project Plan ("Y2K Plan")
that addresses both information technology systems ("IT") (i.e.
business systems and the software development environment) and
non-IT systems, ie. elevators, building security and HVAC
systems.

The Y2K Plan includes five Phases: 1) raising Company awareness,
2) a company-wide system inventory, 3) criticality assessment, 4)
implementation (including remediation, upgrading and/or
replacement of certain systems), and 5) compliance testing.
Phases 1-3 are complete.  Phase 4 (implementation) and Phase 5
(compliance testing) are underway in an iterative process
dependent on what may be found during compliance testing.  The
following graphs present information on the Company's current
overall status of the implementation and compliance phases of the
Y2K Plan, as well as information regarding expected final testing
completion dates. This information, provided in these graphs,
specifically relates to internal systems which have been
identified as high or critical importance during the criticality
assessment phase of the Y2K Plan.

[Graph of Compliance Status Determined]

A bar chart entitled "Compliance Status Determined" at the top
left of page 15 of the 10-Q shows that by 9/30/98, 12/31/98 and
3/31/99 (shown below each bar) the Company has determined
compliance status to be 87%, 97% and 100%, respectively.


[Graph of Remediation Complete]

A bar chart entitled "Remediation Complete" at the top middle of
page 15 of the 10-Q shows that by 9/30/98, 12/31/98, 3/31/99,
6/30/99 and 9/30/99 (shown below each bar) the Company has
determined remediation to be 63%, 80%, 95%, 99% and 100%
completed by the respective dates.


[Graph of Final Certification Testing Complete]

A bar chart entitled "Final Certification Testing Complete" at
the top right of page 15 of the 10-Q shows that by 9/30/98,
12/31/98, 3/31/99, 6/30/99, 9/30/99 and 12/31/99 (shown below
each bar) the Company has determined final certification testing
to be 21%, 40%, 60%, 80%, 99% and 100% completed by the
respective dates.


Company's Cost of Year 2000 Compliance Efforts:
The Company has funded its Y2K Plan from operating cash flows and
has not separately accounted for these costs in the past, partly
because the responsibilities and costs are distributed throughout
the organization and represent a small percentage of total
operating costs.  The Company's current estimate of total cost to
the Company for achieving Y2K compliance is approximately
$500,000 over three years (1997 - 2000), with about half of those
costs estimated to already have been incurred.  Implementing the
Y2K Plan has caused some delays in other planned IT initiatives,
however, these delays have not had a material effect on the
Company's business results.  There can be no assurance, however,
that there will not be a delay in the completion of the Y2K Plan
or that the cost of the Y2K Plan will not exceed present
estimates, either of which could have a material adverse effect
on future results of operations.  The Company may experience
unforeseen material problems and costs with Y2K compliance that
could adversely affect the Company's business, results of
operations, and financial condition.


Company's Risks and Contingencies:
The Company has initiated the development of a comprehensive Y2K
contingency plan to address situations that may result if the
Company is unable to achieve Y2K readiness of its critical
systems.  The contingency plan is expected to be completed during
the second quarter of 1999.

Company's Third Party Relationships:
The Company has contacted its distributors and key vendors
regarding their Y2K compliance efforts.  Although the Company has
received information from some of its distributors and vendors
regarding their Y2K compliance efforts, there can be no assurance
that the Company will not experience disruptions in its ability
to conduct business because of Y2K problems experienced by the
Company's distributors or vendors. The Company has no practical
means to verify the information provided by these independent
third parties and is still pursuing those key distributors and
vendors who may not yet have responded. To the extent that its
key distributors or vendors experience problems relative to
achieving Y2K compliance, the Company could suffer unanticipated
revenue losses.

In addition, the Company does not currently have meaningful
information concerning the Y2K compliance status of its
customers.  As is the case with other software companies, if
significant numbers of the Company's current or future customers
fail to achieve Y2K compliance, or if they divert technology
expenditures away from those that were reserved for computer
aided engineering software to address Y2K compliance problems,
the Company's business, results of operations, or financial
condition could be materially adversely affected.








PART II - OTHER INFORMATION

Item 1.   Legal Proceedings

          Not Applicable.

Item 2.   Changes in Securities

          (c)The following information is furnished in
          connection with securities sold by the
          Registrant during the period covered by this Form
          10-Q which were not registered under the Securities
          Act.  The transactions constitute sales of the
          Registrant's Common Stock, par value $.01 per
          share, upon the exercise of vested options issued
          pursuant to the Company's 1994 Stock Option and
          Grant Plan, issued in reliance upon the exemption from
          registration under Rule 701 promulgated under the
          Securities Act and issued prior to the Registrant
          becoming subject to the reporting requirements of
          Section 13 or 15(d) of the Exchange Act of 1934, as
          amended.
                        Number of     Number of     Aggregate
          Month/Year     Shares       Employees   Exercise Price

          July 1998       9,500              3         $3,800.00
          August 1998    10,750              5         $5,831.25
          September 1998    126              1         $  160.65


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 Filed on Form 8-K

          (a)  Exhibits.

               15   Independent Accountants' Letter Regarding
                    Unaudited Financial Information
               27.1 Financial Data Schedule
               99   Certain Factors Regarding Future Results
            
          (b)  Reports on Form 8-K.

               Not Applicable.



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.


                            ANSYS, Inc.
                            
Date: November 9, 1998      By:  /s/ Peter J. Smith
                                 Peter J. Smith
                                 Chairman, President and
                                 Chief Executive Officer
                            
                            
Date: November 9, 1998      By:  /s/ Maria T. Shields
                                 Maria T. Shields
                                 Chief Financial Officer;
                                 Vice President, Finance
                                 and Administration; Treasurer
                            











Item 6.


                         EXHIBIT INDEX
                        -----------------


                         
             Exhibit
             No.
                         
             15          Independent Accountants' Letter
                         Regarding Unaudited Financial
                         Information
                         
             27.1        Financial Data Schedule
                         
             99          Certain Factors Regarding Future
                         Results
             __________  


1
                                                              
                                                              


                                                       EXHIBIT 15




October 20, 1998



Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549

RE:  ANSYS, Inc. and Subsidiaries

     1.   Form S-8 (Registration No. 333-8613) 1996 Stock Option
        and Grant Plan Employee Stock Purchase Plan, as Amended


Ladies & Gentlemen:

We are aware that our report dated October 20, 1998 on our review
of the interim financial information of ANSYS, Inc. and
Subsidiaries for the three-month and nine-month periods ended
September 30, 1998 is incorporated by reference in the
registration statement referred to above.  Pursuant to Rule 436
(c) under the Securities Act of 1933, this report should not be
considered a part of the registration statement prepared or
certified by us within the meaning of Sections 7 and 11 of that
Act.



Very truly yours,

/s/ PricewaterhouseCoopers LLP
- -----------------------------




  

5 1000 9-MOS DEC-31-1998 JAN-01-1998 SEP-30-1998 4751 35,275 9,076 1,750 0 48,264 3,937 0 63,392 14,388 0 0 0 164 48,840 63,392 25,661 41,296 2,552 4,539 25,793 0 0 12,362 4,165 8,197 0 0 0 8,197 .51 .49
5
                                                              
                                                              

EXHIBIT 99 Certain Factors Regarding Future Results
               
            Information provided by the Company or its
            spokespersons may from time to time contain forward-
            looking statements concerning projected financial
            performance, market and industry segment growth,
            product development and commercialization or other
            aspects of future operations.  Such statements will
            be based on the assumptions and expectations of the
            Company's management at the time such statements are
            made.  The Company cautions investors that its
            performance (and, therefore, any forward-looking
            statement) is subject to risks and uncertainties.
            Various important factors, including, but not
            limited to the following, may cause the Company's
            future results to differ materially from those
            projected in any forward-looking statement.
            
            Potential Fluctuations in Operating Results.  The
            Company may experience significant fluctuations in
            future quarterly operating results.  Fluctuations
            may be caused by many factors, including the timing
            of new product releases or product enhancements by
            the Company or its competitors; the size and timing
            of individual orders, including a fluctuation in the
            demand for and the ability to complete large
            contracts; software errors or other product quality
            problems; competition and pricing; customer order
            deferrals in anticipation of new products or product
            enhancements; reduction in demand for the Company's
            products; changes in operating expenses; mix of
            software license and maintenance and service
            revenue; personnel changes; and general economic
            conditions.  A substantial portion of the Company's
            operating expenses is related to personnel,
            facilities and marketing programs.  The level of
            personnel and personnel expenses cannot be adjusted
            quickly and is based, in significant part, on the
            Company's expectation for future revenues.  The
            Company does not typically experience significant
            order backlog.  Further, the Company has often
            recognized a substantial portion of its revenue in
            the last month of a quarter, with this revenue
            frequently concentrated in the last weeks or days of
            a quarter. During certain quarterly periods, the
            Company has been dependent upon receiving large
            orders of perpetual licenses involving the payment
            of a single up-front fee, which could increase the
            volatility of the Company's revenues and profit from
            period to period.  More recently, the Company has
            also experienced an increase in renewals and sales
            of noncancellable annual leases, for which a portion
            of the annual license fee is recognized as paid-up
            revenue upon renewal or inception of the lease.
            
            As a result, product revenues in any quarter are
            substantially dependent on orders booked and shipped
            in the latter part of that quarter, and revenues for
            any future quarter are not predictable with any
            significant degree of accuracy.
            
            
            Stock Market Volatility.  Market prices for
            securities of software companies have generally been
            volatile.  In particular, the market price of the
            Company's common stock has been and may continue to
            be subject to significant fluctuations as a result
            of factors affecting the Company and software
            industry or securities markets in general.
            
            In addition, a large percentage of the Company's
            common stock is held by TA Associates, Inc. and
            various institutional investors.  Consequently,
            actions with respect to the Company's common stock
            by either TA Associates, Inc. or certain of these
            institutional investors could have a significant
            impact on the market price for the stock.
            
            Rapidly Changing Technology; New Products; Risk of
            Product Defects.  The markets for the Company's
            products are generally characterized by rapidly
            changing technology and frequent new product
            introductions that can render existing products
            obsolete or unmarketable.  A major factor in the
            Company's future success will be its ability to
            anticipate technological changes and to develop and
            introduce in a timely manner enhancements to its
            existing products and new products to meet those
            changes.  If the Company is unable to introduce new
            products and respond to industry changes on a timely
            basis, its business, financial condition and results
            of operations could be materially adversely
            affected.  The introduction and marketing of new or
            enhanced products require the Company to manage the
            transition from existing products in order to
            minimize disruption in customer purchasing patterns.
            There can be no assurance that the Company will be
            successful in developing and marketing, on a timely
            basis, new products or product enhancements, that
            its new products will adequately address the
            changing needs of the marketplace, or that it will
            successfully manage the transition from existing
            products.  Software products as complex as those
            offered by the Company may contain undetected errors
            or failures when first introduced or as new versions
            are released, and the likelihood of errors is
            increased as a result of the Company's commitment to
            accelerating the frequency of its product releases.
            There can be no assurance that errors will not be
            found in new or enhanced products after commencement
            of commercial shipments.  Any of these problems may
            result in the loss of or delay in market acceptance,
            diversion of development resources, damage to the
            Company's reputation, or increased service or
            warranty costs, any of which could have a materially
            adverse effect upon the Company's business,
            financial condition and results of operations.
            
            Dependence on Distributors.  The Company
            distributes its products principally through its
            global network of 33 independent, regional ANSYS
            Support Distributors ("ASDs").  The ASDs sell ANSYS
            and DesignSpace products to new and existing
            customers, expand installations within their
            existing customer base, offer consulting services
            and provide the first line of ANSYS technical
            support.  The ASDs have more immediate contact with
            most customers who use ANSYS software than does the
            Company.  Consequently, the Company is highly
            dependent on the efforts of the ASDs.  Difficulties
            in ongoing relationships with ASDs, such as delays
            in collecting accounts receivable, ASDs' failure to
            meet performance criteria or to promote the
            Company's products as aggressively as the Company
            expects, and differences in the handling of customer
            relationships, could adversely affect the Company's
            performance.  Additionally, the loss of any major
            ASD for any reason, including an ASD's decision to
            sell competing products, could have a materially
            adverse effect on the Company.  Moreover, the
            Company's future success will depend substantially
            on the ability and willingness of its ASDs to
            continue to dedicate the resources necessary to
            promote the Company's products and to support a
            larger installed base of the Company's products. If
            the ASDs are unable or unwilling to do so, the
            Company may be unable to sustain revenue growth.
            
            Competition.  The CAD, computer-aided engineering
            ("CAE") and computer-aided manufacturing ("CAM")
            markets are intensely competitive.  In the
            traditional CAE market, the Company's primary
            competitors include MacNeal-Schwendler Corporation,
            Hibbitt, Karlsson and Sorenson, Inc. and MARC
            Analysis Research Corporation.  The Company also
            faces competition from smaller vendors of
            specialized analysis applications in fields such as
            computational fluid dynamics.  In addition, certain
            integrated CAD suppliers such as Parametric
            Technology Corporation and Structural Dynamics
            Research Corporation provide varying levels of
            design analysis and optimization and verification
            capabilities as part of their product offerings.
            The entrance of new competitors would likely
            intensify competition in all or a portion of the
            overall CAD, CAE and CAM market.  Some of the
            Company's current and possible future competitors
            have greater financial, technical, marketing and
            other resources than the Company, and some have well
            established relationships with current and potential
            customers of the Company.  It is also possible that
            alliances among competitors may emerge and rapidly
            acquire significant market share or that competition
            will increase as a result of software industry
            consolidation.  Increased competition may result in
            price reductions, reduced profitability and loss of
            market share, any of which would materially
            adversely affect the Company's business, financial
            condition and results of operations.
            
            Dependence on Senior Management and Key Technical
            Personnel.  The Company is highly dependent upon the
            ability and experience of its senior executives and
            its key technical and other management employees.
            Although the Company has entered into employment
            agreements with two executives, the loss of these,
            or any of the Company's other key employees, could
            adversely affect the Company's ability to conduct
            its operations.
            
            Risks Associated with International Activities.  A
            significant and growing portion of the Company's
            business comes from outside the United States. Risks
            inherent in the Company's international business
            activities include imposition of government
            controls, export license requirements, restrictions
            on the export of critical technology, political and
            economic instability, trade restrictions, changes in
            tariffs and taxes, difficulties in staffing and
            managing international operations, longer accounts
            receivable payment cycles and the burdens of
            complying with a wide variety of foreign laws and
            regulations.  Effective patent, copyright and trade
            secret protection may not be available in every
            foreign country in which the Company sells its
            products.  The Company's business, financial
            condition and results of operations could be
            materially adversely affected by any of these risks.
            
            Additionally, countries in the Asia Pacific region,
            including Japan, have continued to experience
            weaknesses in their currency, banking and equity
            markets.  These weaknesses could adversely affect
            consumer demand for the Company's products and
            ultimately the Company's financial position or
            results of operations.
            
            Dependence on Proprietary Technology.  The Company's
            success is highly dependent upon its proprietary
            technology.  The Company does not have patents on
            any of its technology and relies on contracts and
            the laws of copyright and trade secrets to protect
            its technology.  Although the Company maintains a
            trade secrets program, enters into confidentiality
            agreements with its employees and distributors and
            limits access to and distribution of its software,
            documentation and other proprietary information,
            there can be no assurance that the steps taken by
            the Company to protect its proprietary technology
            will be adequate to prevent misappropriation of its
            technology by third parties, or that third parties
            will not be able to develop similar technology
            independently.  Although the Company is not aware
            that any of its technology infringes upon the rights
            of third parties, there can be no assurance that
            other parties will not assert technology
            infringement claims against the Company, or that,
            if asserted, such claims will not prevail.
            
            
            Increased Reliance on Noncancellable Annual Leases
            and Perpetual Licenses. The Company has historically
            maintained stable recurring revenue from the sale of
            monthly lease licenses for its software products.
            During certain periods in the past, the Company
            experienced an increase in customer preference for
            perpetual licenses that involve payment of a single
            up-front fee and that are more typical in the
            computer software industry. Most recently, it has
            experienced an increase in customer preference for
            noncancellable annual leases.  While monthly lease
            license revenue currently represents a portion of
            the Company's software license fee revenue, to the
            extent that noncancellable annual lease license and
            perpetual license revenue continue to increase as a
            percent of total software license fee revenue, the
            Company's revenue in any period will increasingly
            depend on sales completed during that period.
            
            
            Management's Assessment of Year 2000 Readiness. The
            Company has developed a plan to address the possible
            exposures related to the impact of the Year 2000 on
            its products, as well as it internal computer
            software and hardware systems.  Details of the
            Company's Year 2000 Plan, along with further
            information regarding costs, timing and risks are
            contained in the "Management's Discussion and
            Analysis of Financial Condition and Results of
            Operations" section of this Form 10-Q under the
            heading "Management's Assessment of Year 2000
            Readiness." The timely resolution of Year 2000
            issues by the Company and its distributors,
            customers and suppliers is based upon certain
            assumptions and estimates of the Company and
            independent third parties. To the extent these prove
            to be incorrect or inaccurate, or the Company or its
            distributors, customers or suppliers experience
            unanticipated delays or expenses, this could cause
            the actual outcome to differ materially from the
            projected results.