1070380--8/12/2009--SABA_SOFTWARE

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{product, market, service}

{customer, product, revenue}

{stock, price, operating}

{system, service, information}

{property, intellectual, protect}

{operation, international, foreign}

{regulation, change, law}

{control, financial, internal}

{acquisition, growth, future}

{product, liability, claim}

{personnel, key, retain}

{condition, economic, financial}

{operation, natural, condition}

{tax, income, asset}

{provision, law, control}

The effects of the recent global economic crisis may impact our business, operating results or financial condition. Fluctuations in our quarterly results could cause our stock price to experience significant fluctuations or declines. We have a history of losses, expect future losses and cannot assure you that we will achieve profitability on a consistent basis. Our OnDemand business depends substantially on customers renewing their agreements and purchasing additional products or users from us. Any decline in our customer renewals would harm our future operating results. Because we generally recognize revenue from the sale of our OnDemand solutions ratably over the term of the subscription period, a significant downturn in our OnDemand business may not be immediately reflected in our operating results. A decline in the price of, or demand for, our products or our related services offerings, would seriously harm our revenues and operating margins. Our products have a long sales cycle, which increases the cost of completing sales and renders completion of sales less predictable. Our performance depends on a new market: human capital management. We experience seasonality in our sales and expense, which could cause our quarterly operating results to fluctuate from quarter to quarter. Reductions in information technology spending could limit our ability to grow our business. Implementation of accounting regulations and related interpretations and policies, particularly those related to revenue recognition, could cause us to defer recognition of revenue or recognize lower revenue or to report lower earnings per share. Standards for compliance with Sarbanes-Oxley Section 404 are burdensome, and if we fail to comply in a timely manner, our business could be harmed and our stock price could decline. The loss of our senior executives and key personnel would likely cause our business to suffer. Intense competition in our target market could impair our ability to grow and achieve profitability on a consistent basis. We expect competition from a variety of companies. If we are unable to manage the complexity of conducting business globally, our international revenues may suffer. The enactment of legislation implementing changes in U.S. taxation of international business activities or the adoption of other tax reform policies could materially impact our financial position and results of operations. Currency exchange rate fluctuations could lower our revenue and net income. Future acquisitions may result in disruptions to our business if we fail to adequately integrate acquired businesses. We may incur impairments to goodwill or long-lived assets. Delays in releasing new products or enhanced versions of our existing products could adversely affect our competitive position. If we release products containing defects, we may need to halt further shipments, service levels may be reduced and our business and reputation would be harmed. We face risks related to claims third parties that we infringe their intellectual property rights and other litigation. Our products include third party technology, the loss of which could materially harm our business. Our use of open source technology could impose limitations on our ability to commercialize our products. We may not be able to adequately protect our proprietary technology, and our competitors may be able to offer similar products and services that would harm our competitive position. Our disaster recovery plan does not include redundant systems, and a disaster could severely damage our operations. We outsource the management and maintenance of our OnDemand business to third parties and will depend upon them to provide adequate management and maintenance services. If our security measures are breached and unauthorized access is obtained to client data, clients may curtail or stop their use of our OnDemand solutions, which would harm our business, operating results and financial condition. We depend in part on the success of our relationships with third-party resellers and integrators. Our stock price may fluctuate substantially. The anti-takeover provisions in our charter documents and our rights plan could delay or prevent a change in control.

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1070380--8/12/2009--SABA_SOFTWARE_INC