Symantec 2000 Annual Report Download - page 21

reputation within the industry. This section should be read in con-
juction with the risk factors set forth in our previously filed Form
10K for the year ended March 31, 2000.
Competition in the consumer and small business market is
intense. Some of the companies that offer competing products to
our Consumer and Small Business offerings include Network
Associates, McAfee.com, PowerQuest, Network ICE, Computer
Associates, WebSense, Secure Computing, Panda, Norman and
Trend Micro. With the recent outbreaks of viruses and other Inter-
net-based security threats, several other companies have entered
the market and may become significant competitors in the future.
We compete against several companies in the virus and mobile
code protection market, which is where we sell our anti-virus
products. Some of the companies that we compete against in this
area are Network Associates, McAfee.com, Computer Associates,
Panda, Norman and Trend Micro. WebSense, N2H2,JSB Software,
Network Associates, Trend Micro and Secure Computing have prod-
ucts that compete directly with our e-mail and Internet content
scanning and filtering products. We compete against ISS Group,
AXENT Technologies and Network Associates in the network secu-
rity marketplace. Our e-Support products, pcAnywhere and Norton
Ghost Enterprise Edition, compete with Traveling Software, Stac
Software, Netopia and other programs.
Price competition is intense with most of our products. 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 offered in our
products. Microsoft has incorporated advanced utilities in Win-
dows 95, Windows 98 and Windows 2000, and we believe this trend
will continue. In addition, several other operating systems are
gaining market acceptance, such as Red Hat Linux, Solaris and
UNIX-based operating systems, and they may also incorporate
advanced utilities or other functionality offered in our products.
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 cooperate with operat-
ing system vendors to make our products compatible with those
operating systems, while at the same time, differentiating our
utility products from features included in these operating systems.
Our efforts in this regard 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 computer 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 may have greater
financial, marketing or 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 groups produce 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 manufactur-
ing and order fulfillment is performed by an outside contractor
under the supervision of our manufacturing organization. Domes-
tic 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 documenta-
tion 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 distrib-
uted outside of North America.
Intellectual Property We regard our software as proprietary. We
attempt to protect our software technology by relying on a com-
bination 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
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