Symantec 1999 Annual Report Download - page 23

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• Microsoft’s Visual J++, Inprise’s JBuilder Professional and IBM’s VisualAge for Java Standard, which
compete with our Symantec Visual Café (Standard Edition) product.
Price competition is sometimes intense with some products in the microcomputer business software market. We expect
price competition to continue to increase and become even more significant in the future, which may reduce our profit
margins.
We also face competition from a number of other products that offer levels of functionality different from those offered
by our products or that were designed for a somewhat different group of end users than those targeted by us. Operating
system vendors such as Microsoft have added features to new versions of their products that provide some of the same
functions traditionally offered in our products. Microsoft has incorporated advanced utilities in Windows 95 and
Windows 98 and we believe this trend will continue. While we plan to continue to improve our products with a view
toward providing enhanced functionality over that provided in current and future operating systems, these efforts may
be unsuccessful and any improved products may not be commercially accepted by users. We will also continue to
attempt to work with operating system vendors in an effort to make our products compatible with those operating
systems. At the same time, we intend to differentiate our utility products from features included in operating systems.
However, our efforts may be unsuccessful.
The demand for some of our products, including those currently under development, may decrease, if, among other
reasons:
• Microsoft includes additional product features in future releases of Windows;
• hardware vendors incorporate additional server-based network management and security tools into network
operating systems; or
• competitors license certain of their products to Microsoft or original equipment manufacturers for inclusion in
their operating systems or products.
In addition, we compete with other microcomputer software companies for access to retail distribution channels and for
the attention of customers at the retail level and in corporate accounts. We also compete with other software
companies to acquire products or companies and to publish software developed by third parties.
Many of our existing and potential competitors have greater financial, marketing and technological resources than we
do. We believe that competition in the industry will continue to intensify as most major software companies expand
their product lines into additional product categories.
Manufacturing .
Our product development organization produces a set of master CD-ROMs or diskettes and documentation for each
product that are then duplicated and packaged into products by the manufacturing organization. All of our domestic
manufacturing and order fulfillment is performed by an outside contractor under the supervision of our manufacturing
organization. Domestic purchasing of all raw materials is done by Symantec personnel in our Cupertino, California
facility. The manufacturing steps that are subcontracted to outside organizations include the duplication of diskettes
and replication of CD-ROMs, printing of documentation materials and assembly of the final packages. We perform
diskette duplication and assembly of the final package in our Dublin, Ireland manufacturing facility for most products
distributed outside of the United States and Canada. All of our international CD-ROM replication is performed by
outside contractors in Dublin, Ireland.
Intellectual Property .
We regard our software as proprietary. We attempt to protect our software technology by relying on a combination of
copyright, patent, trade secret and trademark laws, restrictions on disclosure and other methods. Litigation may be
necessary to enforce our intellectual property rights, to protect trade secrets or trademarks or to determine the validity
and scope of the proprietary rights of others. Furthermore, other parties have asserted and may, in the future, assert
infringement claims against us. See Note 16 of Notes to Consolidated Financial Statements of this Form 10-K. These
claims and any resultant litigation, may result in invalidation of our proprietary rights. Litigation, even litigation that is
not meritorious, could result in substantial costs and diversion of resources and management attention.
Employees .
As of March 31, 1999, we employed approximately 2,400 people, including 1,300 in sales, marketing and related staff
activities, 600 in product development and 500 in management, manufacturing, administration and finance. None of