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RESPONSE LETTER

 I-MANY, INC.

 399 THORNALL STREET, 12th
FLOOR

 EDISON, NEW JERSEY 08837

 November 10, 2005

 United States Securities and Exchange Commission

Division of Corporation Finance

 450 Fifth Street

 Mail Stop 4561

 Washington, D.C. 20549-4561

 Attention: Mr. Stephen Krikorian

Re:
I-many, Inc.

 Form 10-K for the Fiscal Year
Ended December 31, 2004

 Form 10-Q for the Fiscal Quarter Ended March 31, 2005

 Form 10-Q for the Fiscal Quarter Ended June 30, 2005

 File No. 0-30883

 Dear Mr. Krikorian:

 Set
forth below are responses to the comments provided to I-many, Inc. (“the Company”) by the staff of the Commission (the “Staff”) in a letter dated September 16, 2005 (the “Letter”). The responses are keyed to the
numbering of the comments in the Letter.

 Form 10-K for Fiscal Year Ended December 31, 2004

 Consolidated Statements of Operations, page 31

COMMENT:
1. Explain why you do not separately present cost of revenues for your products and services on your consolidated statement of operations. We refer you to Rule 5-03(b)(2) of
Regulation S-X which requires cost of tangible goods sold and services to be stated separately.

RESPONSE:
As indicated in our discussion of Significant Accounting Policies, “substantially all of the amounts included in cost of revenues represent direct costs related to the
delivery of professional services, training and maintenance and customer support.” For the years ended December 31, 2002, 2003 and 2004 and for the six months ended June 30, 2005, cost of product revenues (in thousands and a
percentage of total cost of revenues) amounted to $476 (3.3% of total cost of revenues), $807 (5.2%), $832 (5.6%) and $88 (1.1%), respectively. Because cost of product revenues have been insignificant for all periods presented, Company
management has not deemed it necessary or beneficial to separately disclose cost of product revenues.

 United States Securities and Exchange Commission

 Attention: Mr. Stephen Krikorian

 November 10, 2005

  Page
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 Note (1) Operations and Significant Accounting Policies

 (c) Revenue Recognition

COMMENT:
2. We note that you recognize software license fees upon delivery of the software, in part, provided there are no significant post-delivery obligations. Explain all post-delivery
obligations that cause you to defer recognition of your software licenses fees. Further, provide your revenue recognition accounting policy for your arrangements that include post-delivery obligations. Specifically, explain how you determine that
the post-delivery obligations have been satisfied and the software license fees have been earned. For your multiple element arrangements that include post-delivery obligations, explain how the post-delivery obligations impact the revenue recognition
of the other elements in the arrangement.

RESPONSE:
In the years ended December 31, 2002, 2003 and 2004 and for the six months ended June 30, 2005, there have been three instances in which post-delivery obligations
have resulted in deferred recognition of software license fees. (i) In the third quarter of 2003, a license arrangement for several products, valued at $3.8 million, was deferred because the contract included a change of control warranty that
granted the customer its choice of a pro rata refund of license fees or full rights to a successor’s replacement product(s) at no charge in the event that a successor entity to I-many’s interests discontinued future sales of any of the
licensed products. In the first quarter of 2004, the license contract was amended to revise the change of control warranty so that the customer would be entitled only to source code of discontinued products in the event of discontinued product sales
by a successor entity. As consideration for this warranty change, the customer received consideration in the form of free professional services valued at $100,000. Upon the execution of this amendment, the remaining deferred license fee was
recognized into revenue. (ii) In the fourth quarter of 2004, a license arrangement for the Company’s flagship product (CARS), valued at $766,000, was deferred because of certain promised additional functionality that was scheduled to be
made available in our next version release of the product. This license revenue was subsequently recognized in the first quarter of 2005 during which time the new version release was delivered to the customer. (iii) In the first quarter of
2005, a license arrangement valued at $142,000 was deferred because of the promised delivery – if and when available – at no charge of unspecified future releases of the product on a new platform (“platform protection”). In
accordance with paragraphs 48 and 49 of SOP 97-2, the license fee is being treated as a subscription and is being recognized ratably over the period during which post-contract customer support (“PCS”) is expected to be provided (i.e., 36
months).

 Other than transactions including
platform protection rights, the Company anticipates that few, if any, future transactions will include significant post-delivery obligations. The Company’s accounting policy for any such future transactions will be to evaluate the post-delivery
obligations, and the subsequent satisfaction of these obligations, on a case-by-case basis in accordance with the appropriate accounting guidance (e.g., SOP 97-2).

 United States Securities and Exchange Commission

 Attention: Mr. Stephen Krikorian

 November 10, 2005

  Page
 3

 In each of the above instances, the other service elements included in the arrangements (i.e., PCS
and professional services) were priced in accordance with the Company’s price lists. Because the Company had met the criteria necessary to account separately for these services (see response to Comment 3 below), the Company recognized revenue
as the services were performed.

COMMENT:
3. We note that your multiple-element arrangements contain an element for professional services. Please address the following as it relates to your professional services:

 (a) Tell us the specific services that you
characterize as professional services and how you consider paragraphs 63 through 71 of SOP 97-2 when determining your accounting policy for each type of professional service. In this regard, we note that you offer customization services and that you
have ‘large software implementations’ which suggest that your services may require significant production, modifications or customization of software. Also see paragraph 7 of SOP 97-2.

RESPONSE:
Professional services consist of technical consulting, business analysis, deployment and training services that are typically provided in conjunction with the licensing of
any of our “off-the-shelf” software products. The Company has met the criteria necessary to account separately for the service elements: (i) these services are not essential to functionality (i.e., they involve little if any
customization, and have been performed by other integrators and sometimes by customers themselves) and (ii) vendor-specific objective evidence (“VSOE”) has been established for the pricing of such services. Prior to the period covered
by the financial statements included in the Form 10-K (specifically during 2000 and 2001), the Company had entered into a small number of large consulting arrangements that consisted of significant customization work or build-from-scratch
functionality, and we accounted for these arrangements using the proportional performance method. However, since the beginning of 2002, essentially all professional services work has been provided in conjunction with the licensing of
“off-the-shelf” software products, and such projects have included little if any customization work. Our future disclosures of revenue accounting policies will be revised, as appropriate, to reflect the Company’s then-current revenue
model and operations.

COMMENT:
(b) If the service element does not qualify for separate element accounting, clarify whether you have accounted for the entire arrangement using contract accounting. Refer to
paragraphs 7 and 64 of SOP 97-2. If so, provide the disclosures required by SOP 81-1.

RESPONSE:
In the years ended December 31, 2002, 2003 and 2004 and for the six months ended June 30, 2005, there have been no instances in which the professional services element has
not qualified for separate accounting. See response to 3(a) above.

 United States Securities and Exchange Commission

 Attention: Mr. Stephen Krikorian

 November 10, 2005

  Page
 4

COMMENT:          •
(c) If you meet the criteria in paragraph 65 of SOP 97-2 and account for the services separately, clarify the pattern of performance you use to recognize the service revenue.
Refer to paragraph 66 of SOP 97-2.

RESPONSE:
Company management generates and updates a periodic price list for professional services which is the primary basis for determining the hourly rates at which all professional
services are offered and rendered to customers. Management believes this price list complies with the requirements of VSOE of fair values of such services in compliance with SOP 97-2. Also, the Company has a long track record of implementations for
many of its products and has demonstrated the ability to effectively budget time requirements, resulting in no losses having been realized during the period under review. Exceptions to the professional services price list are infrequent and and in
those instances, a portion of the license fee is “carved out” of license revenue for accounting purposes and allocated to services revenues to the full extent necessary to recoup any services pricing discount.

 For time and materials arrangements, the Company recognizes revenue as the
work is performed. Revenue recognized is equal to the hours worked multiplied by the contract (VSOE) rate. For fixed price arrangements, revenue is based on input measures, which are the hours worked versus the budgeted hours to complete the
project: revenue recognized in an individual period is accounted for using the proportional performance method. The Company monitors fixed fee arrangements to ensure that the unrecognized portion of the fixed fee is at least equal to the estimated
remaining hours multiplied by the relevant VSOE rates.

COMMENT:          •
(d) Further clarify your revenue recognition policy for your “fixed fee professional service contracts” and compare and contrast this policy to your service
arrangements that are not a fixed fee. Clarify whether the fixed fee professional service contracts are part of a multiple element arrangement or simply stand-alone services. If you are applying contract accounting to these fixed fee service
contracts, tell us how you considered footnote 1 to paragraph 11 of SOP 81-1.

RESPONSE:
 Customers generally have the option of entering into a fixed fee professional service contract as an alternative to the standard time and materials
arrangement. In either case, the professional service rates are based on the Company’s VSOE price list and the Company’s estimate of time required to complete. But in the case of a fixed fee contract, the total fixed fee is calculated by
multiplying the applicable VSOE rates by the estimated number of hours to complete the project – further increased by a small factor to compensate for the added risk assumed by I-many in agreeing to a fixed fee arrangement. Since the Company
does not typically customize software products for customers, the Company has

 United States Securities and Exchange Commission

 Attention: Mr. Stephen Krikorian

 November 10, 2005

  Page
 5

the ability to closely estimate the time required to complete its services. The method of determining periodic revenue for fixed fee arrangements is
described in the previous response, as compared to the method for time-and-materials arrangements under which “billable” hours are multiplied by the relevant VSOE rate to derive recognizable revenue. Fixed fee arrangements require
additional monitoring to ensure that the unrecognized portion of the fixed fee is at least equal to the estimated remaining hours multiplied by the relevant VSOE rates.

 Fixed fee professional service contracts can either be part of a multiple element arrangement (i.e., executed in
conjunction with a new license contract) or stand-alone. The Company’s pricing and accounting approach in each case has been similar, as evidenced by the numerous instances of each type of arrangement – multiple element and stand-alone
– that were entered into with customers during the fiscal accounting periods in question.

 The Company did not apply SOP 81-1 to its accounting for fixed fee professional service contracts because as spelled out in footnote 1 to paragraph 11 of
SOP 81-1, “this statement is not intended to apply to ‘service transactions’. . .”

COMMENT:
(e) Tell us more about the arrangements that result in the unbilled receivables referred to on page 38. Tell us how you have considered the collectibility criteria and/or the
fixed or determinable criteria within paragraph 8 of SOP 97-2 when recognizing revenue. Tell us when they typically become billable and address the extent to which you have successfully billed and collected these amounts subsequent to the balance
sheet date.

RESPONSE:
Unbilled receivables are comprised of (i) time and material professional service amounts recognized in the current accounting period (month) but not yet invoiced to
customers (i.e., in-process billings) and (ii) service revenues recognized on fixed fee arrangements in advance of customer billing. The latter situation can arise if the invoicing to a customer is based on milestone attainment, which often
– but not always – results in billing in arrears of the work’s completion. Because of the Company’s track record of implementations and ability to closely estimate the time required to complete its services, the Company generally
recognizes revenue using the proportional performance method even if the milestone billings lag behind the revenue recognition. The Company evaluates the credit-worthiness of all customers before entering into any arrangement, fixed-fee or
otherwise, using past payment history or third-party (D&B) credit reports. All amounts included in unbilled receivables are fixed or determinable since such amounts are (i) based on VSOE hourly rates multiplied by verifiable hours worked
and (ii) in compliance with service contracts.

 Unbilled receivable amounts are evaluated for collectibility/realizability on a regular basis as part of Company management’s ongoing status review of all in process professional service arrangements. These amounts typically become
billable within a three-month period, although longer lag times have been experienced with longer-duration service arrangements. The Company experienced very few write-offs in the period covered by the financial statements in connection with
unbilled receivables, and only one such write-off exceeded $60,000.

 United States Securities and Exchange Commission

 Attention: Mr. Stephen Krikorian

 November 10, 2005

  Page
 6

COMMENT:
4. We note from your disclosure on page 6 that you offer a hosted version of your software license, which is supported by third party providers. Explain whether the application of
EITF 00-3 to your hosting arrangements requires you to recognize hosting revenue pursuant to SOP 97-2 or SAB Topic 13. Specifically tell us whether or not your customers have contractual right to take possession of the software at any time during
the hosting period without significant penalty and whether it is feasible for the customer to either run the software on its own hardware or contract with another party unrelated to the vendor to host the software. Further, tell us your
consideration for disclosing your revenue recognition accounting policy for hosting services. In your response provide your hosting revenues recognized for all periods presented.