Symantec 2001 Annual Report Download - page 31

The trend toward consolidation in the software industry could
impede our ability to compete effectively. Consolidation is underway
among companies in the software industry as firms seek to offer more
extensive suites of software products and broader arrays of software
solutions. Changes resulting from this consolidation may negatively
impact our competitive condition. In addition, to the extent that we
seek to expand our product lines and skills and capacity through
acquisitions, the trend toward consolidation may result in our encoun-
tering competition, and paying higher prices, for acquired businesses.
We must attract and retain personnel while competition for person-
nel in our industry is intense. Competition in recruiting personnel in
the software industry is intense. We believe that our future success
will depend in part on our ability to recruit and retain highly skilled
management, marketing and technical personnel. To accomplish this,
we believe that we must provide personnel with a competitive com-
pensation package, including stock options, which require ongoing
stockholder approval. Such approval may not be forthcoming and, as a
result, we may be impaired in our efforts to attract necessary personnel.
Our intellectual property and proprietary rights may not be ade-
quately protected from all unauthorized uses. We regard our
software and underlying technology as proprietary. We seek to protect
our proprietary rights through a combination of confidentiality agree-
ments and copyright, patent, trademark and trade secret laws. Third
parties may copy aspects of our products or otherwise obtain and use
our proprietary information without authorization or develop similar
technology independently. All of our products are protected by copy-
right laws, and we have a number of patents and patent applications
pending. We may not achieve the desired protection from, and third
parties may design around, our patents. In addition, existing copyright
laws afford limited practical protection. Furthermore, the laws of some
foreign countries do not offer the same level of protection of our
proprietary rights as the laws of the United States, and we may be
subject to unauthorized use of our products. Any legal action that we
may bring to protect proprietary information could be expensive and
may distract management from day-to-day operations.
Our products are complex and are operated in a wide variety of com-
puter configurations, which could result in errors or product failures.
Because we offer very complex products, undetected errors, failures or
bugs may occur when they are first introduced or when new versions
are released. Our products often are installed and used in large-scale
computing environments with different operating systems, system
management software and equipment and networking configurations,
which may cause errors or failures in our products or may expose
undetected errors, failures or bugs in our products. In the past, we have
discovered software errors, failures and bugs in certain of our product
offerings after their introduction and have experienced delays or lost
revenues during the period required to correct these errors. Our cus-
tomers’computer environments are often characterized by a wide
variety of standard and non-standard configurations that make
pre-release testing for programming or compatibility errors very
difficult and time-consuming. Despite testing by us and by others,
errors, failures or bugs may not be found in new products or releases
after commencement of commercial shipments. Errors, failures or
bugs in products released by us could result in negative publicity,
product returns, loss of or delay in market acceptance of our products
or claims by customers or others. Alleviating such problems could
require significant expenditures of our capital and resources and
could cause interruptions, delays or cessation of our product licensing,
which would adversely affect results of operations.
Most of our license agreements with customers contain provisions
designed to limit our exposure to potential product liability claims.
It is possible, however, that these provisions may not prove effective in
limiting our liability.
Increased utilization and costs of our technical support services may
adversely affect our financial results. Like many companies in the
software industry, technical support costs comprise a significant
portion of our operating costs and expenses. Over the short term,
we may be unable to respond to fluctuations in customer demand for
support services. We also may be unable to modify the format of our
support services to compete with changes in support services provided
by competitors. Further, customer demand for these services could
cause increases in the costs of providing such services and adversely
affect our operating results.
symantec 2001__29