SecProbe.io

<DOCUMENT>
<TYPE>LETTER
<SEQUENCE>1
<FILENAME>filename1.txt
<TEXT>

Mail Stop 4-6

      October 8, 2004

Bobby Yazdani
CEO and Chairman
Saba Software, Inc.
2400 Bridge Parkway
Redwood Shores, California 94065-1166

	RE:	Saba Software, Inc.
		Amendment No. 1 to Form S-3
		Filed September 9, 2004
		File No. 333-118226

		Form 10-K for fiscal year ended May 31, 2004
		File No. 0-30221

Dear Mr. Yazdani:

      We have reviewed your filings and have the following
comments.
Where indicated, we think you should revise your documents in
response to these comments.  If you disagree, we will consider
your
explanation as to why our comment is inapplicable or a revision is
unnecessary.  Please be as detailed as necessary in your
explanation.
In some of our comments, we may ask you to provide us with
supplemental information so we may better understand your
disclosure.
After reviewing this information, we may or may not raise
additional
comments.

	Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects.  We welcome
any questions you may have about our comments or on any other
aspect
of our review.  Feel free to call us at the telephone numbers
listed
at the end of this letter.

Form S-3

Our Business, page 1
1. Please revise this section to include only information that
summarizes the key aspects of this offering and your business.
You
may move non-conforming information to elsewhere in your document.
See Item 503(a) of Regulation S-K.

2. We note your assertion that you are a "leading provider" of
human
capital development and management solutions.  Please revise to
disclose your basis for this assertion.  For example, is this
assertion based on how your revenues compare with the revenues
generated by each significant competitor in your industry, or on
the
number of customers, or your market share, etc?  We note similar
assertions on pages 1 and 11 of your Form 10-K.  Additionally,
please
revise your competition section on page 5 of your Form 10-K to
link
this assertion to your discussion of your industry position.  See
Item 101(c)(1)(x) of Regulation S-K.
3. Please balance your discussion of your leading industry
position
by also disclosing your general financial condition over the last
fiscal year including your history of net losses and negative cash
flow, as well as describing your substantial indebtedness.

Risk Factors, page 2
4. Your risk factor section is long and appears to consist of risk
factors that are not specific to your company or this offering.
In
this regard, do not present risks that could apply to any issuer
in
your industry.  Please review your risk factors to revise or
eliminate any risk factors as necessary in order to ensure
meaningful
disclosure that is specific to your company or this offering.

For example:

* "We are exposed to recent unfavorable economic conditions," page
4
* "If we lose key personnel or are unable to attract and retain
...,"
page 5
* "If we fail to maintain an effective system of internal controls
...," page 5
* "Our market is subject to rapid technological change ..." page 7
* "Sales of shares eligible for future sale could cause ...," Page
10
5. Additionally, in each risk factor, get to the risk as quickly
as
possible and provide only enough detail to place the risk in
context.
In some of your risk factors, the actual risk you are trying to
convey does not stand out from the numerous bullet points or the
extensive detail you provide.
   For example:

*  "Fluctuations of our results could cause our stock price ...,"
page 3
* "If we are unable to manage the complexity ...," page 6
6. To the extent useful and available, provide quantification to
explain and give context to amounts your describe as "significant"
or
"substantial."
   For example:

* In "Fluctuations of our results could cause ...," page 3, please
quantify by amount or percentage the past fluctuations in your
operating revenues, as well as the fluctuations in your overall
quarter-to-quarter operating results.
* In "A decline in the price of, or demand for, our main product
...," page 4, quantify by amount or percentage what is meant by
"substantial majority."
* In "Our stock price may fluctuate substantially," page 10,
quantify
by amount or percentage the fluctuation in stock price over a
quarterly or yearly basis.

Difficulties we may encounter managing our growth ..., page 5
7. Please briefly describe what is meant by your intention to grow
your business "significantly."  For example, how do you intend to
grow your business?  Are you planning to expand your sales force?
If
so, by how much (e.g., 20%, 50%, etc.)?  Are you planning growth
through acquisition?  A more detailed explanation of your planned
growth is appropriate for your MD&A and business sections as well.

Claims by third parties that we infringe on their intellectual
property ..., page 8
8. Please briefly disclose your history of litigation in this
area,
including the IP Learn settlement.

If we release products containing defects ..., page 8
9. Disclose whether you have experienced any material difficulty
in
the past with undetected errors or performance problems.

We may not be able to secure necessary funding ..., page 9
10. Please revise to address the risks associated with failing to
satisfy the Nasdaq requirements under a separate risk factor
caption.
In this regard, disclose whether you met this requirement for the
three months ending August 31, 2004.

Disclosure Regarding Forward-Looking Statements, page 12
11. Additionally, please eliminate statements that limit the
amount
of reliance investors may make on the disclosure provided in your
prospectus.  In this regard, we note in your second paragraph the
statement that investors "should not place undue reliance on any
forward-looking statements."

Selling Security Holders, page 13
12. Item 7 of Form S-3 requires disclosure of material
relationships
between the selling security holders and the registrant within the
past three years.  A description of how these selling stockholders
acquired their shares, and the material terms of the securities
they
acquired constitutes a material relationship that must be
described
within your Form S-3.  Therefore, please revise your selling
stockholder section to include this information.  See Item 507 of
Regulation S-K.
13. Please disclose unequivocally, if true, that Messrs. Samber
and
Leniham exercise the sole/shared voting and dispositive powers
with
respect to the shares to be resold.  See interpretation 4S of the
Regulation S-K portion of the March 1999 Supplement to our
publicly
available CF Telephone Interpretation Manual.
14. Disclose whether either of the selling security holders is an
affiliate of a broker-dealers.  If such broker-dealer affiliation
exists, disclose whether the selling security holder acquired
their
shares in the ordinary course of business and whether at the time
of
the acquisition it had any plans or proposals, directly or with
any
other person ,to distribute the shares.  Additionally, explain the
nature of the affiliation.
15. If applicable, please update your selling security holder
table
so that the information is current at the time of your amended
filing.

Plan of Distribution, page 14
16. We note that the selling shareholders may engage in short
sales.
Please advise whether the selling shareholders have any currently
open short positions, and if so, the amount.  In this regard,
please
confirm that you are aware of CF Telephone Interpretation A.65.
17. Regarding your disclosure on page 15 where you state that you
will file a "prospectus supplement" if you are notified that any
of
the selling shareholders entered into a material arrangement with
broker-dealers for the sale or purchase of shares, please revise
to
clarify that, consistent with you undertaking in Item
512(a)(1)(iii)
of Regulations S-K, you will file a post-effective amendment to
reflect this change, rather than a prospectus supplement.

Exhibit 5.1
18. We note your legal opinion is limited to the "General
Corporation
Law of the State of Delaware."  As you may know, Section VIII A.14
of
the CF Current Issues Outline restricts such limitation unless
your
legal counsel can confirm in writing that it understands that any
such limitation includes the statutory provisions and also all
applicable provisions of the Delaware Constitution and reported
judicial decisions interpreting these laws.  Please either revise
your legal opinion as necessary or provide the required written
confirmation.

Form 10-K for fiscal year ended May 31, 2004

General
19. To the extent that comments on the Form S-3 are applicable to
your periodic reports, revise as appropriate. In addition, to the
extent that comments on the Form 10-K are applicable to other
periodic reports or your disclosure in the prospectus, revise as
appropriate.

Our Customers, page 3
20. Please provide us with copies of all materials that support
your
claim that your customers represent 22% of the Fortune Global 100
and
20% of the FTSE 100.
21. Additionally, regarding your statement that your customers are
"leaders in their regions," disclose your basis for stating that
two
of your customers represent "two of the top five companies in
Europe," that three of your customers represent "the top three
companies in Germany," and that one of your customers "is the
largest
company in Brazil."  For example, is this assertion based on the
respective company`s revenues, market capitalization, market
share,
etc?  Are these companies the largest in all industries or a
specific
industry?

Alliances, page 4
22. Please advise us whether any of the "strategic alliance
agreements" and "alliance agreements" referenced in this section
are
material to your operations or contain terms in the agreements
that
are material to an investors understanding of your business.  If
any
material agreement exists, please disclose in this section.  For
example, have you relied heavily on any of your strategic
alliances
in the past or expect such reliance in the future?  Do any of the
terms of your agreements hinder your ability to recruit or hire
certain personnel?

Research and Development, page 5
23. We note that a significant percentage of your operational
expenses are attributable to your research and development
activities.  Consistent with the requirements of Item
101(c)(1)(xi),
disclose the amount spent during each of the last three fiscal
years
on research and development activities.

Proprietary Rights, page 6
24. Please clarify whether you currently possess any material
patents, licenses, etc., as well as clarify their importance,
duration and effect.  In this regard, we note from your MD&A, page
11, the emphasis you place on the license revenue that Saba
Enterprise Learning generates.  See Item 101(c)(1)(iv) of
Regulation
S-K.

Item 3.  Legal Proceedings, page 8
25. Please provide the basis for your belief that the November
2001
complaint filed in the Southern District of New York and the March
12, 2004 complaint filed by Docent, Inc. are without merit.

Item 7. Management`s Discussion and Analysis, page 11

Overview, page 11
26. An informative overview informs readers how the company earns
revenues and income and generates cash, as well as provides
insight
into short and long term material opportunities, challenges and
risks
on which the company`s executives are most focused.  Please
consider
adding disclosure that discusses any short and long term material
opportunities, challenges and risks that concern management, as
well
as the actions management is taking to address them.  For example,
expand your discussion of how Saba earns its revenues by
distinguishing between revenues from licenses and services, and
discuss the decreasing importance of license revenues.  Similarly,
more specifically discuss how management intends to focus on
"aggressively managing costs to achieve positive cash flow from
operations ...."  Additionally, based on the decline in North
American employees and increase in employees outside of North
America, discuss whether management is pursuing a plan to decrease
costs by moving additional operations outside of North America.
See
Section III.A of SEC Release 33-8350.
27. Your MD&A provides discussion and analysis of past financial
condition and operating analysis, however, there does not appear
to
be much emphasis on your prospective financial condition and
operating performance.  Please consider revising your MD&A,
including
your overview section, to discuss prospective matters, such as
subscription trends.  Please focus in you revised discussion on
any
material trends and uncertainties.  In this regard, we note your
general discussion of the decrease in worldwide demand; however,
please expand this discussion to explain how you anticipate this
will
impact Saba.  For example, it is unclear how the benefit you
received
from the "high level of renewals" last year will impact your
operations in the current year.  Additionally, we note from the
last
risk factor on page 2 of your Form S-3 that you expect to incur
losses for the foreseeable future and will need to generate
"significantly higher revenue" in order to achieve profitability.
Please further explain this statement in this section.  See
Section
III.B.3 of SEC Release 33-8350.
28. Please discuss in this section your 2004 restructuring
activities
and their impact on your business.  Specifically, discuss the
period(s) over which your employee reductions occurred and the
rationale behind these reductions.
29. Additionally, tell us what your expectation is of additional
restructuring charges or adjustments.  Tell us what consideration
you
gave to MD&A of such charges and adjustments.
30. As mentioned in the risk factor on page 4 of your Form S-3,
please include within your business section a discussion of your
sales cycle.

Revenue Models, page 11
31. In light of the fact that service revenues accounted for 71%
of
fiscal 2004 revenues and 63% of fiscal 2003 revenues, please
clarify
your statement that "we generate the majority of our revenues from
the sale of perpetual software licenses, primarily Saba Enterprise
learning, along with annual support services ...,"

Results of Operations, page 13
32. Regarding your disclosure that one customer that accounted for
12% of your revenues in fiscal 2003, please advise us of the
reasons
for this change.  For example, is this no longer a customer of
Saba,
or did the amount generated by this customer decrease?  Please
consider the materiality of this change to an investor`s
understanding your business.
33. We note your disclosure that you attribute the decline in your
consulting revenue in fiscal year 2004 to an increase in the
number
of implementations performed by third-party integrators.  You also
indicate that your international customers are more likely to use
third party integrators, and there was an increase in this mix of
customers during this period.  Do you expect that the mix of
international customers will continue to increase?  In this
regard,
will any such increases result in continuing declines in your
consulting revenue?
34. We note that between 2004 and 2003 you experienced lower
"consultant utilization rates" and "lower realized average hourly
billing rates" for your consultants.  We note that you indicate
such
declines led to the increase in cost of services as a percentage
of
services revenue for such period.  Please revise to clarify the
percentage of such increase that is the result of a reduction in
volume of services sold versus a reduction in prices charged for
such
services.
35. In this section, you sometimes refer to two or more factors
that
contributed to material changes over the reported periods.  Some
examples of these factors include the following:

* The decrease in service revenues affected