Edgar Filing: EVOLVE SOFTWARE INC

As filed with the Securities and Exchange Commission on January 16, 2001
Registration No. 333-
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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

FORM S-8/S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
(Including Registration of shares for resale by means of a Form S-3 Prospectus)

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

EVOLVE SOFTWARE, INC.
(Exact name of Registrant as specified in its charter)

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

Delaware 94-3219745
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)

1400 65th Street, Suite 100
Emeryville, CA 94608
(510) 428-6000
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)

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

1995 Stock Option Plan
Restricted Stock Purchase Agreements
Non-Plan Stock Option Agreements
(Full title of the plan)

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

JOHN P. BANTLEMAN
Chief Executive Officer
Evolve Software, Inc.
1400 65th Street, Suite 100
Emeryville, CA 94608
(510) 428-6000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)

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

Copy to:

LARRY W. SONSINI, ESQ.
RAMSEY HANNA, ESQ.
Wilson Sonsini Goodrich & Rosati
Professional Corporation
650 Page Mill Road
Palo Alto, CA 94304
(650) 493-9300

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

CALCULATION OF REGISTRATION FEE

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

Proposed Maximum Proposed Maximum
Title of Each Class of Securities Amount to be Offering Price Aggregate Amount of
to be Registered Registered Per Share Offering Price Registration Fee
----------------------------------------------------------------------------------------------------------

Common Stock $0.001 per share par value:
Issued under the 1995 Stock Option 460,757
Plan.................................. shares(1) $4.695(4) $ 2,163,254 $ 541
----------------------------------------------------------------------------------------------------------
Common Stock $0.001 per share par value:
Issued under Restricted Stock Purchase 6,479,530
Agreements............................ shares(2) $4.695(4) $30,421,393 $7,606
----------------------------------------------------------------------------------------------------------
Non-Plan Stock Options
Common Stock $0.001 per share par value 215,000
Currently outstanding options......... shares(3) $4.695(4) $ 1,009,425 $ 252
----------------------------------------------------------------------------------------------------------
7,155,287
TOTAL.................................. shares $4.695(4) $33,594,072 $8,399
----------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------

(1) The 460,727 shares issued under the 1995 Stock Option Plan registered
pursuant to this Registration Statement are in addition to 2,929,367 shares
issuable under the 1995 Stock Option Plan registered pursuant to Evolve's
Registration Statement on Form S-8 filed on August 10, 2000 (SEC
Registration No. 333-43448).
(2) Represents certain shares held by stockholders who purchased the shares by
means of restricted stock purchase agreements entered into in connection
with employment agreements.
(3) Represents currently outstanding stock options issued to foreign-based
employees of Evolve in connection with the employment of such individuals.
(4) Estimated in accordance with Rule 457(c) solely for the purpose of
calculating the registration fee based upon the average of the high and low
prices of the Common Stock as reported on the Nasdaq National Market on
January 10, 2001.

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

PROSPECTUS

7,155,287 Shares

Evolve Software, Inc.

Common Stock

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

This prospectus relates to 7,155,287 shares of the common stock of Evolve
Software, Inc., acquired in connection with the employment of the selling
stockholders or issuable upon exercise of stock options held by employees.
These shares may be offered from time to time by selling stockholders
identified beginning on page 14 of this prospectus. It is anticipated that the
selling stockholders may offer shares for sale at prevailing prices in the
Nasdaq National Market on the date of sale or in negotiated transactions at
such prices as may be agreed upon, or in a combination of such methods of sale.
See "Plan of Distribution." We will receive no part of the proceeds from any
such sales of the shares. The selling stockholders will bear all sales
commissions and similar expenses. Any other expenses incurred by us in
connection with the registration and offering and not borne by the selling
stockholders will be borne by us. The shares were acquired by the selling
stockholders under our 1995 Stock Option Plan or restricted stock purchase
agreements, or will be acquired pursuant to options issued to foreign-based
employees outside of any stock plan.

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

Our common stock is listed on the Nasdaq National Market under the symbol
"EVLV." On January 10, 2001, the last reported sale price of our common stock
on the Nasdaq National Market was $4.69 per share.

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

See "Risk Factors" beginning on page 4 to read about certain risks that you
should consider before buying shares of our common stock.

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

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.

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

The date of this prospectus is January 16, 2001.

TABLE OF CONTENTS

Page
----

Special Note Regarding Forward-Looking Statements.......................... 2
Prospectus Summary......................................................... 3
The Offering............................................................... 3
Risk Factors............................................................... 4
Use of Proceeds............................................................ 12
Selling Stockholders....................................................... 13
Plan of Distribution....................................................... 18
Where You Can Find More Information........................................ 19
Information Incorporated by Reference...................................... 19
Legal Matters.............................................................. 20
Experts.................................................................... 20

You should rely only on the information contained in or incorporated by
reference in this prospectus. We have not authorized anyone to provide you with
information different from that contained in this prospectus. Certain selling
stockholders may offer to sell shares and may seek offers to buy shares only in
jurisdictions where offers and sales are permitted. The information contained
in or incorporated by reference in this prospectus is accurate only as of the
date of this prospectus, regardless of the time of delivery of this prospectus
or any sale of our common stock.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

Some of the statements within "Our Company," "Risk Factors," and elsewhere
in this prospectus constitute forward-looking statements. These statements
involve known and unknown risks, uncertainties, and other factors that may
cause our or our industry's actual results, levels of activity, performance or
achievements to be materially different from any future results, levels of
activity, performance or achievements expressed or implied by these forward-
looking statements. In some cases, you can identify forward-looking statements
by terminology such as "may," "will," "should," "expects," "plans,"
"anticipates," "believes," "estimates," "predicts," "potential," "continue" or
the negative of these terms or other comparable terminology. Although we
believe that the expectations reflected in the forward-looking statements are
reasonable, we cannot guarantee future results, levels of activity, performance
or achievements. Moreover, neither we nor any other person assumes
responsibility for the accuracy and completeness of these statements.

PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in this prospectus.
This summary is not complete and does not contain all of the information you
should consider before buying shares in this offering. You should read the
entire prospectus carefully.

Evolve Software, Inc. is a leading provider of Internet-based end-to-end
solutions for automating professional service organizations. Our ServiceSphere
software suite integrates and streamlines the core processes that are critical
to professional services organizations: managing project opportunities,
professional resources and service delivery. We license our Evolve
ServiceSphere solution directly to services organizations and provide related
implementation, integration, training, maintenance and hosting services. Our
Services.com online applications portal enables smaller professional services
providers to rapidly and cost-effectively access the benefits of our
ServiceSphere technology to manage their businesses. Our solution combines the
efficiency gains of automating business processes with the benefits of online
inter-company collaboration, creating an ePlatform for the professional
services industry.

We were incorporated in Delaware in February 1995. Our principal executive
offices are located at 1400 65th Street, Suite 100, Emeryville, CA 94608 and
our telephone number is (510) 428-6000. Our website is www.evolve.com. The
information on the website is not a part of this prospectus.

THE OFFERING

All of the shares that may be offered with this prospectus are held by
stockholders who acquired or will acquire ownership of the shares either
through the exercise of stock options granted them under our 1995 Stock Option
Plan, through private sales by means of restricted stock purchase agreements in
connection with the employment of such individuals, or pursuant to options
issued to foreign-based employees outside of any stock plan.

Common Stock that may be offered by the selling
stockholders.......................................... 7,155,287
Common Stock outstanding after this offering........... 38,668,366*
Use of proceeds........................................ No proceeds to Company

--------
* Because all but 215,000 of the shares that may be offered with this
prospectus are already outstanding, this number represents 215,000 more
shares than the number of shares outstanding as of January 12, 2001.

RISK FACTORS

You should consider carefully the following risks before you decide to buy
our common stock. If any of the following risks actually materializes, our
business, financial condition or results of operations would likely suffer. In
such case, the trading price of our common stock could fall, and you could lose
all or part of the money paid to buy our common stock.

Our business is difficult to evaluate because our operating history is limited.

It is difficult to evaluate our business and our prospects because our
revenue and income potential are unproven. We commenced recognizing sales
revenues in the first quarter of 1999. Because of our limited operating
history, there may not be an adequate basis for forecasts of future operating
results, and we have only limited insight into the trends that may emerge in
our business and affect our financial performance.

We have incurred losses since inception, and we may not be able to achieve
profitability.

We have incurred net losses and losses from operations since our inception
in 1995, and we may not be able to achieve profitability in the future. Since
inception, we have funded our business primarily from the sale of our stock and
by borrowing funds, not from cash generated by our business. We expect to
continue to incur significant sales and marketing, research and development,
and general and administrative expenses. As a result, we expect to experience
continued losses and negative cash flows from operations. If we do achieve
profitability, we may not be able to sustain or increase profitability on a
quarterly or annual basis in the future.

Our future operating results may not follow past trends due to many factors,
and any of these could cause our stock price to fall.

We believe that quarter-to-quarter comparisons of our operating results are
not a good indication of future performance. Although our operating results
have generally improved from quarter to quarter in the recent past, our future
operating results may not follow past trends. It is likely that in some future
quarters our operating results may be below the expectations of public market
analysts and investors due to factors beyond our control, and as a result, the
price of our common stock may fall.

Factors that may cause our future operating results to be below expectations
and cause our stock price to fall include:

. the lack of demand for and acceptance of our products, product
enhancements and services; for instance, as we expand our target customer
focus beyond the information technology sector and into overseas markets,
we may encounter increased resistance to adoption of our business process
automation solutions;

. unexpected changes in the development, introduction, timing and
competitive pricing of our products and services or those of our
competitors;

. any inability to expand our direct sales force and indirect marketing
channels both domestically and internationally;

. difficulties in recruiting and retaining key personnel in a highly
competitive recruiting environment;

. unforeseen reductions or reallocations of our customers' information
technology infrastructure budgets; or

. any delays or unforeseen costs incurred in integrating technologies and
businesses we may acquire.

We plan to significantly increase our operating expenses to expand our
administration, information technology infrastructure, consulting and training,
maintenance and technical support, research and development and sales and
marketing groups. Our operating expenses are based on our expectations of
future revenues and are relatively fixed in the short term. If revenues fall
below our expectations in any quarter and we are not able to quickly reduce our
spending in response, our operating results for that quarter would be lower
than expected and our stock price may fall.

We may lose existing customers or be unable to attract new customers if we do
not develop new products or enhance our existing products.

If we are not able to maintain and improve our product line and develop new
products, we may lose existing customers or be unable to attract new customers.
We may not be successful in developing and marketing product enhancements or
new products on a timely or cost-effective basis. These products, if developed,
may not achieve market acceptance. As an example, we have added service
delivery management functions to our ServiceSphere suite and we have built
enhanced delivery management functionality in part through integration of the
technology of InfoWide, Inc. However, we have only recently made these
enhancements generally available, and we cannot be certain that any of these
enhancements will meet the needs or expectations of our customers.

A limited number of our customers expect us to develop product enhancements
that may address their specific needs. For instance, we have shared with some
of our customers our internal product roadmap which includes descriptions of
new functional enhancements such as improved time and expense management for
future releases of our software. If we fail to deliver these enhancements on a
timely basis, we risk damaging our relationship with these customers. We have
experienced delays in the past in releasing new products and product
enhancements and may experience similar delays in the future. These delays or
problems in the installation or implementation of our new releases may cause
some of these customers to forego additional purchases of our products or to
purchase those of our competitors.

If the market for process automation solutions for professional services
organizations does not continue to grow, the growth of our business will not be
sustainable.

The future growth and success of our business is contingent on growing
acceptance of, and demand for, business process automation solutions for
professional services organizations. All of our historical revenues have been
attributable to the sale of automation solutions for professional services
organizations. This is a relatively new enterprise application solution
category, and it is uncertain whether major services organizations will choose
to adopt process automation systems. While we have devoted significant
resources to promoting market awareness of our products and the problems our
products address, we do not know whether these efforts will be sufficient to
support significant growth in the market for process automation products.
Accordingly, the market for our products may not continue to grow or, even if
the market does grow in the immediate term, that growth may not be sustainable.

If we fail to expand our relationships with third-party resellers and
integrators, our ability to grow revenues could be harmed.

In order to grow our business, we must establish, maintain and strengthen
relationships with third parties, such as information technology ("IT")
consultants and systems integrators as implementation partners and hardware and
software vendors as marketing partners. If these parties do not provide
sufficient, high-quality service or integrate and support our software
correctly, our revenues may be harmed. In addition, these parties may offer
products of other companies, including products that compete with our products.
Our contracts with third parties may not require these parties to devote
resources to promoting, selling and supporting our solutions. Therefore we may
have little control over these third parties. We cannot assure you that we can
generate and maintain relationships that offset the significant time and effort
that are necessary to develop these relationships, or that, even if we are able
to develop such relationships, these parties will perform adequately.

Our services revenues have a substantially lower margin than our software
license revenues, and an increase in services revenues relative to license
revenues could harm our gross margins.

A significant shift in our revenue mix away from license revenues to service
revenues would adversely affect our gross margins. Revenues derived from
services we provide have substantially lower gross margins than revenues we
derive from licensing our software. The relative contribution of services we
provide to our overall revenues is subject to significant variation based on
the structure and pricing of arrangements we enter

into with customers in the future, and the extent to which our partners provide
implementation, integration, training and maintenance services required by our
customers. An increase in the percentage of total revenues generated by the
services we provide could adversely affect our overall gross margins.

Difficulties with third-party services and technologies could disrupt our
business, and many of our communication systems do not have backup systems.

Many of our communications and hosting systems do not have backup systems
capable of mitigating the effect of service disruptions. Our success in
attracting and retaining customers for our ServiceSphere application service
provider ("ASP") offering and convincing them to increase their reliance on
this solution depends on our ability to offer customers reliable, secure and
continuous service. This requires that we provide continuous and error-free
access to our systems and network infrastructure. We rely on third parties to
provide key components of our networks and systems. For instance, we rely on
third-party Internet service providers to host applications for customers who
purchase our solutions on a subscription basis. We also rely on third-party
communications services providers for the high-speed connections that link our
Web servers and office systems to the Internet. Any Internet or communications
systems failure or interruption could result in disruption of our service or
loss or compromise of customer orders and data. These failures, especially if
they are prolonged or repeated, would make our services less attractive to
customers and tarnish our reputation.

Our markets are highly competitive and competition could harm our ability to
sell products and services and reduce our market share.

Competition could seriously harm our ability to sell additional software
solutions and subscriptions on prices and terms favorable to us. The markets
for our products are intensely competitive and subject to rapidly changing
technology. We currently compete against providers of automation solutions for
professional services organizations, such as Changepoint and Niku. In addition,
we may in the future face competition from providers of enterprise application
software or electronic marketplaces. Companies in each of these areas may
expand their technologies or acquire companies to support greater professional
services automation functionality and capabilities. In addition, "in-house"
information technology departments of potential customers have developed or may
develop systems that substitute for some of the functionality of our product
line.

Some of our competitors' products may be more effective than our products at
performing particular functions or be more customized for particular customer
needs. Even if these functions are more limited than those provided by our
products, our competitors' software products could discourage potential
customers from purchasing our products. A software product that provides some
of the functions of our software solutions, but also performs other tasks may
be appealing to these vendors' customers because it would reduce the number of
different types of software necessary to effectively run their businesses.
Further, many of our competitors may be able to respond more quickly than we
can to changes in customer requirements.

Some of our competitors have longer operating histories, significantly
greater financial, technical, marketing or other resources, or greater name
recognition than we do. Our competitors may be able to respond more quickly
than we can to new or emerging technologies and changes in customer
requirements. Our competitors have made and may also continue to make strategic
acquisitions or establish cooperative relationships among themselves or with
other software vendors. They may also establish or strengthen cooperative
relationships with our current or future partners, limiting our ability to
promote our products through these partners and limiting the number of
consultants available to implement our software.

Our lengthy and unpredictable sales cycles for our products and resistance to
adoption of our software could cause our operating results to fall below
expectations.

Our operating results for future periods could be adversely affected because
of unpredictable increases in our sales cycles. Our products and services have
lengthy and unpredictable sales cycles varying from as little as three months
to as much as nine months, which could cause our operating results to be below
the expectations of analysts and investors. Since we are unable to control many
of the factors that will influence our customers'

buying decisions, it is difficult for us to forecast the timing and recognition
of revenues from sales of our solutions.

Customers in our target market often take an extended time evaluating our
products before purchasing them. Our products may have an even longer sales
cycle in international markets. During the evaluation period, a variety of
factors, including the introduction of new products or aggressive discounting
by competitors and changes in our customers' budgets and purchasing priorities,
may lead customers to not purchase or to scale down orders for our products.

As we target industry sectors and types of organizations beyond our core
market of IT services organizations, we may encounter increased resistance to
use of business process automation solutions, which may further increase the
length of our sales cycles, increase our marketing costs and reduce our
revenues. Because we are pioneering a new solution category, we often must
educate our prospective customers on the use and benefit of our solutions,
which may cause additional delays during the evaluation process. These
companies may be reluctant to abandon investments they have made in other
systems in favor of our solution. In addition, IT departments of potential
customers may resist purchasing our solutions for a variety of other reasons,
particularly the potential displacement of their historical role in creating
and running software and concerns that packaged software products are not
sufficiently customizable for their enterprises.

Our revenues depend on orders from our top customers, and if we fail to
complete one or more orders, our revenues will be reduced.

Historically, we have received a significant portion of our revenues from a
small number of customers. Our operating results may be harmed if we are not
able to complete one or more substantial product sales in any future period or
attract new customers.

We depend on the continued services of our executive officers, and the loss of
key personnel or any inability to attract and retain additional personnel could
affect our ability to successfully grow our business.

If we are unable to hire and retain a sufficient number of qualified
personnel, particularly in sales, marketing, research and development, service
and support, our ability to grow our business could be affected. Competition
for qualified personnel in high technology is intense, particularly in the San
Francisco Bay Area where our principal office is located. The loss of the
services of our key engineering, sales, service or marketing personnel would
harm our operations. For instance, loss of sales and customer service
representatives could harm our relationship with the customers they serve, loss
of engineers and development personnel could impede the development of product
releases and enhancements and decrease our competitiveness, and departure of
senior management personnel could result in a loss of confidence in our company
by customers, suppliers and partners. None of our key personnel is bound by an
employment agreement, and we do not maintain key person insurance on any of our
employees. Because we, like many other technology companies, rely on stock
options as a component of our employee compensation, if the market price of our
common stock decreases or increases substantially, some current or potential
employees may perceive our equity incentives as less attractive. In that case,
our ability to attract and retain employees may be adversely affected.

Our future success depends upon the continued service of our executive
officers, particularly John Bantleman, our President and Chief Executive
Officer, who is critical to determining our broad business strategy. None of
our executive officers is bound by an employment agreement for any specific
term. Our business could be harmed if we lost the services of one or more of
our executive officers or key employees, or if one or more of them decide to
join a competitor or otherwise compete directly or indirectly with us.

If our products do not stay compatible with widely used software programs, our
revenues may be adversely affected.

Our software products must work with widely used software programs. If these
software programs and operating environments do not remain widely used, or we
do not update our software to be compatible with newer versions of these
programs and systems, we may lose customers.

Our software only operates on both a computer server running the Microsoft
Windows NT or Sun Solaris operating system and a computer server running
database software from Microsoft or Oracle. In order to increase the
flexibility of our solution and expand our client base, we must be able to
successfully adapt it to work with other applications and operating systems.
For example, we are in the early stages of customer deployment on the Sun
Solaris operating system. Because this development effort is not complete, we
cannot be certain that we will avoid significant technical difficulties which
could delay or prevent completion of the development effort.

Our software connects to and uses data from a variety of our customers'
existing software systems, including systems from Oracle and SAP. If we fail to
enhance our software to connect to and use data from new systems of these
products, we may lose potential customers.

The cost and difficulties of implementing our products could significantly harm
our reputation with customers and harm our future sales.

If our customers encounter unforeseen difficulties or delays in deploying
our products and integrating them with their other systems, they may reverse
their decision to use our solutions, which would reduce our future revenues and
potentially damage our reputation. Factors which could delay or complicate the
process of deploying our solutions include:

. customers may need to modify significant elements of their existing IT
systems in order to effectively integrate them with our solutions;

. customers may need to purchase and deploy significant additional hardware
and software resources and may need to make significant investments in
consulting and training services; and

. customers may rely on third-party systems integrators to perform all or a
portion of the deployment and integration work, which reduces the control
we have over the implementation process and the quality of customer
service provided to the customer.

Our sales are concentrated in the IT services industry, and if our customers in
this industry decrease their infrastructure spending, or we fail to penetrate
other industries, our revenues may decline.

We expect to continue to direct our sales and marketing efforts primarily
toward companies in the IT services industry. Sales to customers in the IT
services industry accounted for substantially all of our revenues in fiscal
1999 and 2000. Given the high degree of competition and the rapidly changing
environment in this industry, there is no assurance that we will be able to
continue sales in this industry at current levels. Declines in the stock prices
of potential customers in the IT services sector may also limit the ability of
IT service providers to invest in their infrastructure. In addition, we intend
to market our products to professional services organizations in other
industries. Customers in these new industries are likely to have different
requirements and may require us to change our product design or features, sales
methods, support capabilities or pricing policies. If we fail to successfully
address the needs of these customers, we may experience decreased sales in
future periods.

If we lose key licenses, we may be required to develop or license alternatives
which may cause delays or reductions in sales or shipments.

We rely on software that we have licensed from third parties, including Poet
Software and Inprise/Borland, to perform key functions of our Evolve
ServiceSphere ePlatform, and we rely on these and other third parties to
support their products for our development and customer support efforts. These
companies could terminate our licenses if we breach our agreements with them,
or they could discontinue support of the products we license from them. This
could result in delays or reductions of sales or shipments of our ePlatform
until alternative software can be developed or licensed.

If our products contain significant defects or our services are not perceived
as high quality, we could lose potential customers or be subject to damages.

Our products are complex and may contain currently unknown errors, defects
or failures, particularly since new versions are frequently released. In the
past we have discovered software errors in some of our products after
introduction. We may not be able to detect and correct errors before releasing
our products commercially. If our commercial products contain errors, we may:

. need to expend significant resources to locate and correct the errors;

. be required to delay introduction of new products or commercial shipment
of products; or
. experience reduced sales and harm to our reputation from dissatisfied
customers.

Our customers also may encounter system configuration problems that require
us to spend additional consulting or support resources to resolve these
problems.

Because our software products are used for critical operational and
decision-making processes by our customers, product defects may also give rise
to product liability claims. Although our license agreements with customers
typically contain provisions designed to limit our exposure, some courts may
not enforce all or part of these limitations. Although we have not experienced
any product liability claims to date, we may encounter these claims in the
future. Product liability claims, whether or not they have merit, could:

. divert the attention of our management and key personnel from our
business;

. be expensive to defend; and

. result in large damage awards.

We do not have product liability insurance, and even if we obtain product
liability insurance, it may not be adequate to cover all of the expenses
resulting from such a claim. In addition, if our customers do not find our
services to be of high quality, they may elect to use other training,
consulting and product integration firms rather than contract for our services.
If customers are dissatisfied with our services, we may lose revenues.

Our business may suffer if we are not able to protect our intellectual
property.

Our success is dependent on our ability to develop and protect our
proprietary technology and intellectual property rights. We seek to protect our
software, documentation and other written materials primarily through a
combination of patent, trade secret, trademark and copyright laws,
confidentiality procedures and contractual provisions. While we have attempted
to safeguard and maintain our proprietary rights, we do not know whether we
have been or will be completely successful in doing so. Further, our
competitors may independently develop or patent technologies that are
substantially equivalent or superior to ours.

We have two patent applications pending in the United States with respect to
the "Team Builder" functionality in our Resource Manager module, and the
enablement of dynamically configurable software systems by our ServiceSphere
software server. While the former application has not been issued, we have
received notice from the U.S. Patent Office that the latter application has
been allowed. However, there can be no assurance that either application would
survive a legal challenge to its validity or provide significant protection to
us. Despite our efforts to protect our proprietary rights, unauthorized parties
may attempt to copy aspects of our products or obtain and use information that
we regard as proprietary. Policing unauthorized use of our products is
difficult. While we are unable to determine the extent to which piracy of our
software products exists, software piracy can be expected to be a persistent
problem, particularly in foreign countries where the laws may not protect
proprietary rights as fully as in the United States. We can offer no assurance
that our means of protecting its proprietary rights will be adequate or that
our competitors will not reverse engineer or independently develop similar
technology.

If others claim that we are infringing their intellectual property, we could
incur significant expenses or be prevented from selling our products.

We cannot provide assurance that others will not claim that we are
infringing their intellectual property rights or that we do not in fact
infringe those intellectual property rights. We have not conducted a search for
existing intellectual property registrations, and we may be unaware of
intellectual property rights of others that may cover some of our technology.

Any litigation regarding intellectual property rights could be costly and
time-consuming and divert the attention of our management and key personnel
from our business operations. The complexity of the technology involved and the
uncertainty of intellectual property litigation increase these risks. Claims of
intellectual property infringement might also require us to enter into costly
royalty or license agreements.

We may not be able to obtain royalty or license agreements on terms
acceptable to us, or at all. We also may be subject to significant damages or
an injunction against use of our products. A successful claim of patent or
other intellectual property infringement against us would have an immediate
material adverse effect on our business and financial condition.

We have grown very quickly, and if we fail to manage our growth, our ability to
generate new revenues and achieve profitability would be harmed.

We have grown significantly since our inception and will need to grow
quickly in the future. Any failure to manage this growth could impede our
ability to increase revenues and achieve profitability. In order to manage
growth effectively, we must:

. hire, train and integrate new personnel;

. continue to augment our management information systems;

. manage our sales and services operations, which are in several locations;
and

. expand and improve our systems and facilities.

We intend to further expand operations internationally, but we may encounter a
number of problems in doing so which could limit our future growth.

We may not be able to successfully market, sell, deliver and support our
products and services internationally. Any failure to build and manage
effective international operations could limit the future growth of our
business. Expansion into international markets requires significant management
attention and financial resources to open additional international offices and
hire international sales and support personnel. Localizing our products is
difficult and may take longer than we anticipate due to difficulties in
translation and delays we may experience in recruiting and training
international staff. We currently have no experience in developing local
versions of our products, and limited experience in marketing, selling and
supporting our products and services overseas. Doing business internationally
involves greater expense and many additional risks, particularly:

. differences and unexpected changes in regulatory requirements, taxes,
trade laws, tariffs, intellectual property rights and labor regulations;

. changes in a specific country's or region's political or economic
conditions;

. greater difficulty in establishing, staffing and managing foreign
operations; and

. fluctuating exchange rates.

Security concerns, particularly related to the use of our software on the
Internet, may limit the effectiveness of and reduce the demand for our
products.

Despite our efforts to protect confidential and proprietary information of
our customers stored on Services.com or our ServiceSphere ASP offering via
virtual private networks and other security devices, there

is a risk that this information will be disclosed to unintended third-party
recipients. To the extent our ability to implement secure private networks on
our Services.com site or for our ServiceSphere ASP service is impaired by
technical problems, or by improper or incomplete procedural diligence by either
ourselves or our customers, sensitive information could be exposed to
inappropriate third parties such as competitors of our customers, which may in
turn expose us to liability and detrimentally impact our customers' confidence
in Services.com or our ASP service.

Services.com, the online applications portal business model, may not achieve
customer acceptance.

Our Services.com online applications portal was launched in March 2000.
However, we cannot be certain that current or future customers will choose to
use Services.com, and we do not anticipate that such fees, or lack thereof,
will have a material impact on our revenue.

Resistance to online use of personal information regarding employees and
consultants may hinder the effectiveness of and reduce demand for our products
and services.

Companies store information on the Services.com site, our ASP offering and
on online networks created by our customers, which may include personal
information of their employees, including employee backgrounds, skills, and
other details. These employees may object to online compilation, transmission
and storage of such information, or, despite our efforts to keep such personal
information secure, this information may be delivered unintentionally to
inappropriate third parties such as recruiters. Enterprise applications like
ServiceSphere have always run on secure company intranets. The information
contained in ServiceSphere databases will be exposed to the unpredictable
security of the Internet, which may create unforeseen liabilities for us.
ServiceSphere is currently targeted primarily to the North American market, but
to the extent that European companies and customers will have access to it
(given the global nature of the Internet), and to the extent that our services
are utilized by Europeans, legal action grounded in European privacy laws could
prevent Services.com and our ASP service from succeeding in the European
market.

Potential imposition of governmental regulation or taxation on electronic
commerce could limit our growth.

The adoption of new laws or the adaptation of existing laws to the Internet
may decrease the growth in the use of the Internet, which could in turn
decrease the demand for our solutions, increase our cost of doing business or
otherwise have a material adverse impact on our business. Few laws or
regulations currently directly apply to access to commerce on the Internet.
Federal, state, local and foreign governments are considering a number of
legislative and regulatory proposals relating to Internet commerce. As a
result, a number of laws or regulations may be adopted regarding Internet user
privacy, taxation, pricing, quality of products and services and intellectual
property ownership. How existing laws will be applied to the Internet in areas
such as property ownership, copyright, trademark, trade secret and defamation
is uncertain. The recent growth of Internet commerce has been attributed by
some to the lack of sales and value-added taxes on interstate sales of goods
and services over the Internet. Numerous state and local authorities have
expressed a desire to impose such taxes on sales to businesses in their
jurisdictions. The Internet Tax Freedom Act of 1998 prevents imposition of such
taxes through October 2001. If the federal moratorium on state and local taxes
on Internet sales is not renewed, or if it is terminated before its expiration,
sales of goods and services over the Internet could be subject to multiple
overlapping tax schemes, which could substantially hinder the growth of
Internet-based commerce, including use of our Services.com offering.

If we need additional financing to maintain and expand our business, financing
may not be available on favorable terms, if at all.

We expect to incur net losses before amortization charges for the
foreseeable future. We may need additional funds to expand or meet all of our
operating needs. If we need additional financing, we cannot be certain that it
will be available on favorable terms, if at all. Further, if we issue
additional shares of our capital stock, stockholders will experience additional
dilution, which may be substantial. If we need funds and cannot raise them on
acceptable terms, we may not be able to continue our operations at the current
level or at all.

The sale of a substantial number of shares of common stock could cause the
market price of our common stock to decline.

Sales of a substantial number of shares of our common stock in the public
market, or the appearance that such shares are available for sale, could
adversely affect the market price for our common stock. As of January 12, 2001,
we had 38,453,366 shares of common stock outstanding. Of these shares,
substantially all of the 5,750,000 shares of common stock that we sold in our
initial public offering are freely tradable in the public market without
restriction unless held by our affiliates, in which case the shares are
tradable subject to certain volume limitations. The 6,940,287 outstanding
shares of common stock covered by this prospectus are, and the 215,000 shares
subject to stock options if such options are exercised before February 5, 2001
will be, subject to 180-day lock-up agreements entered into between the holders
of these shares and the representatives of the underwriters for our initial
public offering. These lock-up agreements provide that such holders may not
sell their shares until February 5, 2001. Upon expiration of these lock-up
agreements, any such shares that are fully vested will be freely tradable,
subject to the volume limitations contained in Rule 144(e) promulgated under
the Securities Act; of these shares, 3,433,546 are presently vested or on
February 5, 2001 will be vested.

The remaining 25,763,079 shares of common stock outstanding as of the date
of this prospectus are subject to similar lock-up agreements and, as a result
of being issued and sold by us in reliance on exemptions from the registration
requirements of the Securities Act, are limited by resale restrictions. Of
these 25,763,079 shares, eligibility for resale will be as follows:

. Upon expiration of the lock-up agreements on February 5, 2001, an
aggregate of 15,254,431 shares will be eligible for sale, in some cases
subject only to volume, manner of sale and notice requirements of Rule
144 under the Securities Act.

. An additional 3,506,741 shares will become eligible for sale (in
addition to the 215,000 shares, subject to options, being registered
herein, if such options are exercised), subject only to the manner of
sale requirements of Rule 144, as our right to repurchase these shares
lapses over time with the continued employment by Evolve of these
stockholders.

. On March 31, 2001, 2,001,907 shares issued to stockholders of InfoWide,
Inc., a company we acquired on March 31, 2000, will be eligible for
sale, subject only to volume, manner of sale and notice requirements of
Rule 144 under the Securities Act.

. On June 28, 2001, and July 13, 2001, respectively, aggregate amounts of
3,007,775 shares and 1,992,225 shares, acquired through the conversion
of preferred stock, will become eligible for sale, subject only to these
same Rule 144 requirements.

As of the date of this prospectus, we also have 3,174,413 shares subject to
outstanding options under our stock option plans (in addition to the 215,000
options issued outside of any plan), and 3,323,610 shares are available for
future issuance under these plans. We have registered the shares of common
stock subject to outstanding options and reserved for issuance under our stock
option plans and the 2,000,000 shares of common stock reserved for issuance
under our 2000 Employee Stock Purchase Plan. Accordingly, shares underlying
vested options will be eligible for resale in the public market beginning on
February 5, 2001.

In addition, 9,167 shares of our common stock issuable upon exercise of
warrants will become eligible for sale on various dates upon expiration or
release of the lock-up agreements. After this offering and expiration or
release of the lock-up agreements, holders of 21,249,160 shares of the common
stock and the holders of warrants to purchase approximately 5,000 shares of
common stock may require us to register their shares for resale under the
federal securities laws.

USE OF PROCEEDS

Evolve will not receive any of the proceeds from the sale of the shares of
common stock pursuant to this prospectus. All proceeds from the sale of the
shares will be for the account of the selling stockholders, as described below.
See "Selling Stockholders" and "Plan of Distribution" described below.

SELLING STOCKHOLDERS

The selling stockholders acquired ownership of all the shares listed below
either through the exercise of stock options granted them under our 1995 Stock
Option Plan, through private sales by means of restricted stock purchase
agreements entered into as part of such stockholders' employment with us, or
pursuant to options issued to foreign-based employees outside of any stock
plan. In accordance with Item 507 of Regulation S-K, the following table shows
in each case as of January 16, 2001 the name of each selling stockholder and
how many shares the selling stockholder may offer for resale under this
prospectus. In each case, all shares being registered herein by each
stockholder comprise all shares held by such stockholder, except as to those
shares beneficially owned by certain stockholders as described in the table on
page 17 herein. Evolve may amend or supplement this prospectus from time to
time in the future to update or change this list of selling stockholders and
shares which may be resold.

Of the 7,155,287 shares listed below, 3,721,741 are subject to our right of
repurchase, which right lapses over time with the continued employment by
Evolve of these stockholders.

Shares that may be
Name Status # offered for resale RSPA*
---- -------- ------------------ -----

Albert Lucas and Jane S. Lucas, Trustees of
the Lucas Family Revocable Trust............ 4 67,361 B
Aneesha Gupta Irrevocable Trust.............. 2 4,444 B
Bantleman, Betty............................. 5 1,667 D
Bantleman, John.............................. 2,3 132,500 D
Bantleman, John.............................. 2,3 1,100,000 B
Bantleman, Peter............................. 5 5,000 D
Bantleman, Simon............................. 5 833 D
Bartholomew, Glenn........................... 1 15,000 C
Benziger, Maureen Duffy...................... 5 200 A
Bernard, Maurice & Nicole.................... 5 125 B
Boas, Christopher............................ 1 16,667
Bolles, Gary A............................... 4 36,111 A
Bozzini, James............................... 2 750,000 B
Cardwell, Graham............................. 1 15,000 C
Casey, Lien.................................. 1 1,667
Chun, Lily................................... 1 5,833
Chung, Angel................................. 1 667
Cox, John.................................... 1 833
Crosby, Dan.................................. 2 175,000 C
Cunningham, Mary Frances..................... 5 200 A
Dannert, David............................... 1 833
Darrow, Ruth A............................... 1 9,667
Davis, Mark L................................ 2 333,333 B
Dearnley, Sharon............................. 1 3,125
DeLeon, J. Russell........................... 1 31,250 A
DeLeon, J. Russell........................... 1 200,084 B
Dighe, Rajesh................................ 1 4,167
Ding, Jie.................................... 1 3,333
Donlan, Peter K.............................. 1 3,333
Douglas Sloan Sinclair and Keith David Taylor
as Trustees of the Craig Douglas Sinclair
Trust dated May 12, 2000.................... 2 1,667 B
Douglas Sloan Sinclair and Keith David Taylor
as Trustees of the Jeffrey Stuart Sinclair
Trust dated May 12, 2000.................... 2 1,667 B

Shares that may be
Name Status # offered for resale RSPA*
---- -------- ------------------ -----

Douglas Sloan Sinclair and Keith David
Taylor as Trustees of the Keith John
Sinclair Trust dated May 12, 2000.......... 2 1,667 B
Drake, Diane................................ 1 3,333
Drazan, Jeffrey M........................... 3 83,333 B
Drazan, Jeffrey M........................... 3 41,667
Dunn, Caroline.............................. 5 1,667 A
England, Patricia A......................... 1 4,167
Ferrie, Christian........................... 5 1,150 B
Ferrie, George & Christine.................. 5 750 B
Ferrie, Laurence............................ 5 1,150 B
Finney, Blaire A............................ 1 12,096
Judith Fox.................................. 5 200
Fritch, Cynthia............................. 5 833 A
Fritch, Kristen............................. 5 167 A
Fuca, Joe................................... 2 125,000
Gehring, Susie.............................. 1 4,167
Glassey, C. Roger........................... 4 31,250 A
Govinda, Ramamurthy......................... 1 1,167
Gupta Family Trust.......................... 2 282,778 B
Hamilton, Judith............................ 3 83,333 B
Hare, Jonathan.............................. 4 1,300,000 A
Hatton, Ernest Will......................... 1 233
Heikkinen, Kurt............................. 2 291,667 B
Higbee, Lisa................................ 1 1,750
Ho, Jiun.................................... 5 200 A
Hubert, Claude & Chantal.................... 5 500 B
Inglis, Joshua.............................. 1 1,042
Jackson, Laura.............................. 1 250
Jones, Jessica.............................. 5 167 A
Joshi, Shri................................. 1 2,500
JRO Consulting.............................. 3 333,333 B
Kallas, Rula................................ 1 833
Karina Gupta Irrevocable Trust.............. 2 4,444 B
Keel, Robert................................ 4 3,125
Kerr, Carl.................................. 5 167 A
Kerr, Laurissa.............................. 5 167 A
Kerr, Tania................................. 5 833 A
Koopman, Isabel & John...................... 5 600 B
Kooshmanian, Frederic....................... 5 600 B
Korsager, Charlotte......................... 1 1,250
Lewis, Jeffrey J............................ 1 667
Liu, Robin R................................ 1 208
Looney, Sloan D............................. 1 6,042
Maranyan, Zemfira........................... 1 1,333
Marc Ferrie and Virginie Ferrie, as Trustees
of the Marc And Virginie Ferrie Trust
Agreement, Dated as of 5/4/2000............ 2 454,722 B
Marc Ferrie and Virginie Ferrie, as Trustees
of the Marc And Virginie Ferrie Trust
Agreement, Dated as of 5/4/2000............ 2 31,945 B
Margolis, Jay............................... 1 5,333
Marino, Tom................................. 3 867
Martinez, Corinne Y......................... 4 104,167 A

Shares that may be
Name Status # offered for resale RSPA*
---- -------- ------------------ -----

McClure, Frank.............................. 5 500 B
McClure, Jeff............................... 2 50,667 B
McClure, John & Jean........................ 5 1,000 B
McClure, Lonny.............................. 5 500 B
McLaughlin, David J......................... 4 26,666 A
Merritt, Cheryl............................. 5 1,667 A
Merritt, Lauren............................. 5 167 A
Merritt, Richard............................ 5 167 A
Merritt, Sascha............................. 5 167 A
Mirjan, Hasan............................... 1 433
Moon, Hannah Y.............................. 1 833
Morgante, Guy T............................. 4 25,000 B
Morris, Chase............................... 5 167 A
Morris, Doyle............................... 5 833 A
Morris, Doyle Jr............................ 5 833 A
Morris, Jordyn.............................. 5 167 A
Morris, Michael............................. 5 833 A
Morris, Randall............................. 5 833 A
Morris, Rebecka............................. 5 167 A
Moulton, Dennis............................. 4 7,533 A
Murati, Charles J........................... 1 1,225
Muth, Richard A............................. 1 11,777
Noyes, Thomas J............................. 1 62,500 A
Noyes, Thomas J............................. 1 15,000
Nunes, Donna & Rich......................... 5 1,000 B
Nunes, Greg................................. 5 500 B
Paugh, Robert............................... 1 1,500
Plummer, James.............................. 1 10,000 C
Rochester, Paul............................. 3 83,333
Rountree, Gregory........................... 1 1,667
Sacco, John................................. 1 8,333
Salomon Smith Barney as SEP IRA Custodian
FBO Jane Lucas Acct........................ 5 9,167 B
Saville, Richard J.......................... 4 65,972 A
Scherba, Tonya E............................ 1 7,083
Seashols, Michael........................... 4 100,000 E
Sinclair, Douglas S......................... 4 411,667 B
Smit, Jason S............................... 1 4,167
Sonjfari, Khadija........................... 5 125 B
Stoll, Peter................................ 1 6,667
Strain, Curtis E............................ 1 2,917
Tahvildary, Andrew.......................... 1 16,667
Tepermeyster, Natalie....................... 1 250
The Bert And Jane Lucas Children's
Irrevocable Trust.......................... 4 7,500 B
Torreano, Robert............................ 1 2,917
Venkateswaran, Balaj........................ 1 8,333
Warner, Chris J............................. 1 1,250
Wen, Eric................................... 1 1,250
Winograd, Steve............................. 1 3,000
Wisnovsky, Peter............................ 1 9,167
Wong, Debra S............................... 1 3,333
Wylder, Marilyn............................. 1 500

Shares that may be
Name Status # offered for resale RSPA*
---- -------- ------------------ -----

Yoffie, David................................. 4 25,000 A
Zhang, Qin.................................... 1 2,000

--------
# Status column codes indicate the following:

(1) As of the date of this prospectus, the selling stockholder is employed
by the Company as an employee or a non-executive officer.
(2) As of the date of this prospectus, the selling stockholder is employed
by the Company as an executive officer.
(3) As of the date of this prospectus, the selling stockholder serves as a
director of the Company. JRO Consulting, Inc., is owned by John R.
Oltman, the Chairman of our Board of Directors.
(3) The selling stockholder is or was a consultant to the Company.
(4) The selling stockholder was previously employed by the Company.
(5) The selling stockholder received shares by means of a gift.

*RSPA column codes indicate the following:

(A) Purchased using Restricted Stock Purchase Agreement in the form
attached as Exhibit 4.2 (or received as a gift from such a purchaser).
(B) Purchased using Restricted Stock Purchase Agreement in the form
attached as Exhibit 4.3 (or received as a gift from such a purchaser).
(C) Options underlying these shares were issued under the Non-Plan Stock
Option Agreement in the form attached as Exhibit 4.4.
(D) Purchased using Restricted Stock Purchase Agreement dated January 1998,
attached as Exhibit 4.5 (or received as a gift from such a purchaser).
(E) Purchased using Restricted Stock Purchase Agreement dated September
1997, attached as Exhibit 4.6.

We have calculated the number of shares each selling stockholder
"beneficially owns" in accordance with Rule 13d-3 under the Exchange Act.
Beneficial ownership as defined in Rule 13d-3 does not necessarily indicate
beneficial ownership for any other purpose. Under Rule 13d-3, a person
beneficially owns all shares to which he or she has either sole or shared
voting power or sole or shared investment power, as well as all shares which
they have the right to acquire within 60 days of the calculation date by
exercising any stock option or other right. Since the paragraph above the
foregoing list speaks of January 16, 2001, beneficial ownership therefore
includes all shares which the selling stockholder has the right to acquire
within 60 days after January 16, 2001 (i.e., on or before March 17, 2001). As
of the date of this prospectus, six of the above stockholders beneficially own
more than 1% of our outstanding common stock, as detailed in the table below.

Shares Beneficially Percentage of Total
Owned Assuming Sale Shares Outstanding
Shares Beneficially Percent of of All Shares Assuming Sale of
Owned as of Total Shares Included In This All Shares Included
Name of Beneficial Owner January 16, 2001 (#) Outstanding (%) Offering (#) In This Offering (%)
------------------------ ------------------- --------------- ------------------- --------------------

John P. Bantleman ...... 1,232,500(1) 3.20% 0 --
James J. Bozzini ....... 750,000(2) 1.95% 0 --
Marc C. Ferrie ......... 536,667(3) 1.40% 50,000 (7)
Jonathan Hare .......... 1,333,333(4) 3.47% 33,333 (7)
John R. Oltman ......... 398,810(5) 1.04% 65,477 (7)
Douglas S. Sinclair..... 416,668(6) 1.08% 0 --

--------
(1) Represents shares subject to a lapsing repurchase right in favor of the
Company, which has lapsed as to 536,874 shares as of January 16, 2001.
(2) Represents shares subject to a lapsing repurchase right in favor of the
Company, which has lapsed as to 218,750 shares as of January 16, 2001.
(3) Represents shares subject to lapsing repurchase right in favor of the
Company, which has lapsed as to 200,207 shares as of January 16, 2001.
These shares are held by two trusts of which Mr. Ferrie and members of his
family are trustees and beneficiaries.

(4) Mr. Hare may disclaim beneficial ownership of up to 33,333 of these shares
that he does not own directly.
(5) These shares are held by JRO Consulting, Inc. Mr. Oltman, the President of
JRO Consulting, Inc., is the beneficial owner of these shares. The total
includes 41,667 options issued but not exercised pursuant to an early
exercise option agreement. Of these options, 6,076 are fully vested and the
underlying shares would not be subject to a right of repurchase by the
Company if they were exercised.
(6) Represents shares subject to a lapsing repurchase right in favor of the
Company, which has lapsed as to 62,708 shares as of January 16, 2001.
(7) Constitutes under 1.0% of total shares outstanding assuming sale of all
shares included in this offering.

PLAN OF DISTRIBUTION

We have been advised by the selling stockholders that they may sell all or a
portion of the shares offered hereby from time to time in the Nasdaq National
Market and that sales will be made at prices prevailing in the Nasdaq National
Market at the times of such sales. The selling stockholders may also make
private sales directly or through a broker or brokers, who may act as agent or
as principal. Further, the selling stockholders may choose to dispose of the
shares offered hereby by gift to a third party or as a donation to a charitable
or other non-profit entity. In connection with any sales, the selling
stockholders and any brokers participating in such sales may be deemed to be
underwriters within the meaning of the Securities Act of 1933, as amended (the
"Securities Act").

Any broker-dealer participating in such transactions as agent may receive
commissions from the selling stockholders (and, if such broker acts as agent
for the purchaser of such shares, from such purchaser). Usual and customary
brokerage fees will be paid by the selling stockholders. Broker-dealers may
agree with the selling stockholders to sell a specified number of shares at a
stipulated price per share, and, to the extent such a broker-dealer is unable
to do so acting as agent for the selling stockholders, to purchase as principal
any unsold shares at the price required to fulfill the broker-dealer commitment
to the selling stockholders. Broker-dealers who acquire shares as principal may
thereafter resell such shares from time to time in transactions (which may
involve crosses and block transactions and which may involve sales to and
through other broker-dealers, including transactions of the nature described
above) in the over-the-counter market, in negotiated transactions or otherwise
at market prices prevailing at the time of sale or at negotiated prices, and in
connection with such resales may pay to or receive from the purchasers of such
shares commissions computed as described above.

We have advised the selling stockholders that Regulation M promulgated under
the Exchange Act may apply to sales in the market and has informed them of the
possible need for delivery of copies of this prospectus. The selling
stockholders may indemnify any broker-dealer that participates in transactions
involving the sale of the shares against certain liabilities, including
liabilities arising under the Securities Act. Any commissions paid or any
discounts or concessions allowed to any such broker-dealers, and, if any such
broker-dealers purchase shares as principal, any profits received on the resale
of such shares, may be deemed to be underwriting discounts and commissions
under the Securities Act.

Upon our being notified by the selling stockholders that any material
arrangement has been entered into with a broker-dealer for the sale of shares
through a cross or block trade, a supplemental prospectus will be filed under
Rule 424(c) under the Securities Act, setting forth the name of the
participating broker-dealer(s), the number of shares involved, the price at
which such shares were sold by the selling stockholders, the commissions paid
or discounts or concessions allowed by the selling stockholders to such broker-
dealer(s), and where applicable, that such broker-dealer(s) did not conduct any
investigation to verify the information set out in this prospectus.

There can be no assurance that the selling stockholders will sell any or all
of the shares of common stock offered hereunder.

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the Securities and Exchange Commission, a registration
statement on Form S-8/S-3, of which this prospectus is a part, under the
Securities Act with respect to the shares of common stock offered hereby. The
prospectus does not contain all of the information included in the registration
statement. Statements contained in this prospectus concerning the provisions of
any document are not necessarily complete. You should refer to the copies of
these documents filed as exhibits to the registration statement or otherwise
filed by us with the SEC for a more complete understanding of the matter
involved. Each statement concerning these documents is qualified in its
entirety by such reference.

We are also subject to the informational requirements of the Securities
Exchange Act of 1934. In accordance with the Exchange Act we file reports,
proxy statements and other information with the SEC. The registration
statement, including the attached exhibits and schedules, may be inspected and
copied at the public reference facilities maintained by the SEC, Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the
SEC's regional offices at 500 West Madison Street, Suite 1400, Chicago, IL
60661 and Seven World Trade Center, 13th Floor, New York, NY 10048. Please call
the SEC at 1-800-SEC-0330 for further information about the public reference
rooms. The SEC maintains a Web site that contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the SEC. Copies of the registration statement and the
reports, proxy and information statements and other information that we file
with the SEC may be obtained from the SEC's Internet address at
http://www.sec.gov.

INFORMATION INCORPORATED BY REFERENCE

The following documents and information previously filed with the Securities
and Exchange Commission by us are hereby incorporated by reference in this
registration statement:

(1) Our registration statement on Form S-1 (Registration No. 333-32796)
under the Securities Act of 1933, as amended, in the form declared
effective on August 9, 2000 including the prospectus dated August 9,
2000 as filed by us pursuant to Rule 424(b) on August 8, 2000.

(2) Our Quarterly Report on Form 10-Q for the fiscal quarter ended
September 30, 2000, filed pursuant to Section 13 of the Exchange Act.

(3) The description of our common stock contained in our registration
statement on Form 8-A filed July 26, 2000 pursuant to Section 12(g) of
the Exchange Act and declared effective August 9, 2000.

All reports and other documents subsequently filed by us pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the date of this
prospectus and prior to the filing of a post-effective amendment which
indicates that all securities registered have been sold or which de-registers
all securities then remaining unsold, shall be deemed to be incorporated by
reference in this registration statement and to be part hereof from the date of
filing of such documents. You may request a copy of these filings, at no cost,
by writing: Director of Investor Relations, Evolve Software, Inc., at 1400 65th
Street, Suite 100, Emeryville, CA 94608, or by calling the Director of Investor
Relations at (510) 428-6000.

LEGAL MATTERS

The validity of the Shares of Common Stock offered hereby will be passed
upon for Evolve by Wilson Sonsini Goodrich & Rosati, Professional Corporation,
Palo Alto, California. As of the date of this Registration Statement, an
investment partnership composed of certain current and former members of and
persons associated with Wilson Sonsini Goodrich & Rosati, Professional
Corporation, in addition to certain current and former individual members of
Wilson Sonsini Goodrich & Rosati, Professional Corporation, beneficially own an
aggregate of 24,762 shares of Evolve Software, Inc. Common Stock.

EXPERTS

The financial statements incorporated in this Prospectus by reference to the
Registration Statement on Form S-1 (File No. 333-75296) of Evolve Software,
Inc. have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.

The financial statements of InfoWide, Inc. as of December 31, 1999 and 1998,
and for the year ended December 31, 1999, for the period from April 15, 1998
(inception) to December 31, 1998, and for the period from April 15, 1998
(inception) to December 31, 1999, incorporated in this Prospectus by reference
from the Registration Statement on Form S-1 (File No. 333-75296) of Evolve
Software, Inc. have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their report incorporated by reference herein, and have
been so incorporated in reliance on the report of such firm given upon their
authority as experts in accounting and auditing.

EVOLVE SOFTWARE, INC.

7,155,287 Shares

Common Stock

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

PROSPECTUS

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

January 16, 2001

PART II

INFORMATION REQUIRED IN REGISTRATION STATEMENT

Item 3. Incorporation of Documents By Reference.

The following documents and information previously filed with the Securities
and Exchange Commission by us are hereby incorporated by reference in this
registration statement:

(2) Our Quarterly Report on Form 10-Q for the fiscal quarter ended
September 30, 2000, filed pursuant to Section 13 of the Exchange Act.

(3) The description of our common stock contained in our registration
statement on Form 8-A filed July 26, 2000 pursuant to Section 12(g) of
the Exchange Act and declared effective August 9, 2000.

Item 4. Description of Securities.

Not Applicable.

Item 5. Interests of Named Experts and Counsel.

The validity of the shares of Common Stock offered hereby has been passed
upon for Evolve Software, Inc. by Wilson Sonsini Goodrich & Rosati,
Professional Corporation, Palo Alto, California. As of the date of this
Registration Statement, an investment partnership composed of certain current
and former members of and persons associated with Wilson Sonsini Goodrich &
Rosati, Professional Corporation, in addition to certain current and former
individual members of Wilson Sonsini Goodrich & Rosati, Professional
Corporation, beneficially own an aggregate of 24,762 shares of Evolve Software,
Inc. Common Stock.

Item 6. Indemnification of Directors and Officers.

Section 145 of the Delaware General Corporation Law permits a corporation to
include in its charter documents, and in agreements between the corporation and
its directors and officers, provisions expanding the scope of indemnification
beyond that specifically provided by the current law.

Article NINTH of our Amended and Restated Certificate of Incorporation
provides for the indemnification of directors to the fullest extent permissible
under Delaware law.

Article VI of our Amended and Restated Bylaws provides for the
indemnification of officers, directors and third parties acting on behalf of us
if such person acted in good faith and in a manner reasonably believed to be in
and not opposed to our best interest, and, with respect to any criminal action
or proceeding, the indemnified party had no reason to believe his or her
conduct was unlawful.

II-1

We have entered into indemnification agreements with our directors and
executive officers, in addition to indemnification provided for in our Amended
and Restated Bylaws, and intend to enter into indemnification agreements with
any new directors and executive officers in the future. The indemnification
agreements may require us, among other things, to indemnify our directors and
officers against certain liability that may arise by reason of their status or
service as directors and officers (other than liabilities arising from willful
misconduct of a culpable nature), to advance their expenses incurred as a
result of any proceeding against them as to which they could be indemnified,
and to obtain directors' and officers' insurance, if available on reasonable
terms.

Item 7. Exemption From Registration Claimed.

The issuance of the shares being offered by the Form S-3 resale prospectus
contained in this Registration Statement were deemed to be exempt from
registration under the Securities Act in reliance on Section 4(2) of the
Securities Act and/or Regulation D promulgated thereunder. The recipients of
securities in each such transaction represented their intention to acquire the
securities for investment only and not with a view to or for sale in connection
with any distribution thereof and appropriate legends were affixed to the share
certificates and instruments issued in such transactions. All recipients had
adequate access, through their relationship with the Registrant, to information
about the Registrant.

Item 8. Exhibits.

Exhibit
Number Description
------- -----------

4.1* 1995 Stock Option Plan and form of agreement used thereunder

Form of Restricted Stock Purchase Agreement in use through January 31,
4.2 1999

Form of Restricted Stock Purchase Agreement in use beginning February
4.3 1, 1999

4.4 Form of Non-Plan Stock Option Agreement

Restricted Stock Purchase Agreement for John P. Bantleman dated
4.5 January 1998

Restricted Stock Purchase Agreement for Michael Seashols dated
4.6 September 1997

5.1 Opinion of counsel as to legality of securities being registered

23.1 Consent of PricewaterhouseCoopers LLP, Independent Accountants

23.2 Consent of Deloitte & Touche LLP, Independent Auditors

23.3 Consent of Counsel (contained in Exhibit 5.1)

24.1 Power of Attorney (contained on page II-5)

--------
* Incorporated by reference to Exhibit 10.5 filed with our registration
statement on Form S-1 (No. 333-32796).

Item 9. Undertakings.

(a) The undersigned Registrant hereby undertakes:

(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:

(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;

(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement; and

II-2

(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement.

Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply
if the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the Registrant
pursuant to Section 13 or Section 15(d) of the Exchange Act of 1934 that
are incorporated by reference in this Registration Statement.

(2) That, for the purpose of determining any liability under the
Securities Act of 1933, as amended, each such post-effective amendment
shall be deemed to be a new Registration Statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.

(3) To remove from registration by means of a post-effective amendment
any of the securities being registered, which remain unsold at the
termination of the offering.

(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in the Registration Statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.

(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.

II-3

SIGNATURES

Pursuant to the requirements of the Securities Act, the Registrant certifies
that it has reasonable grounds to believe that it meets all of the requirements
for filing on Form S-8/S-3 and has duly caused this Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Emeryville, State of California, on this 12th day of January, 2001.

Evolve Software, Inc.

/s/ John P. Bantleman
_____________________________________
John P. Bantleman
President and Chief Executive
Officer

II-4

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints John P. Bantleman and Douglas S. Sinclair,
jointly and severally, his or her attorneys-in-fact, each with the power of
substitution, for him or her in any and all capacities, to sign any amendments
to this Registration Statement on Form S-8/S-3, and to file the same, with
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
each of said attorneys-in-fact, or his substitute or substitutes, may do or
cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the date indicated.

Signature Title Date
--------- ----- ----

/s/ John P. Bantleman President, Chief Executive January 12, 2001
____________________________________ Officer and Director
John P. Bantleman (Principal Executive
Officer)

/s/ Douglas S. Sinclair Chief Financial Officer January 12, 2001
____________________________________ (Principal Financial
Douglas S. Sinclair Officer)

/s/ Kenneth J. Bozzini Director of Finance, January 12, 2001
____________________________________ Corporate Controller (Chief
Kenneth J. Bozzini Accounting Officer)

/s/ Jeffrey M. Drazan Director January 12, 2001
____________________________________
Jeffrey M. Drazan

Director
____________________________________
Judith H. Hamilton

/s/ John R. Oltman Director January 12, 2001
____________________________________
John R. Oltman

/s/ Paul Rochester Director January 12, 2001
____________________________________
Paul Rochester

II-5

EVOLVE SOFTWARE, INC.

REGISTRATION STATEMENT ON FORM S-8/S-3

INDEX TO EXHIBITS

Exhibit
Number Description
------- -----------

4.1* 1995 Stock Option Plan and form of agreement used thereunder

4.2 Form of Restricted Stock Purchase Agreement in use through January 31,
1999

4.3 Form of Restricted Stock Purchase Agreement in use beginning February
1, 1999

4.4 Form of Non-Plan Stock Option Agreement

4.5 Restricted Stock Purchase Agreement for John P. Bantleman dated
January 1998

4.6 Restricted Stock Purchase Agreement for Michael Seashols dated
September 1997

5.1 Opinion of counsel as to legality of securities being registered

23.1 Consent of PricewaterhouseCoopers LLP, Independent Accountants

23.2 Consent of Deloitte & Touche LLP, Independent Auditors

23.3 Consent of Counsel (contained in Exhibit 5.1)

24.1 Power of Attorney (contained on page II-5)

--------
*Incorporated by reference to Exhibit 10.5 filed with our registration
statement on Form S-1 (No. 333-32796).