Symantec 2007 Annual Report Download - page 22

If we are not successful in managing these risks and challenges, or if our new products, product upgrades, and
services are not technologically competitive or do not achieve market acceptance, our business and operating results
could be adversely affected.
Fluctuations in demand for our products and services are driven by many factors, and a decrease in
demand for our products could adversely affect our financial results.
We are subject to fluctuations in demand for our products and services due to a variety of factors, including
competition, product obsolescence, technological change, budget constraints of our actual and potential customers,
levels of broadband usage, awareness of security threats to IT systems, and other factors. While such factors may, in
some periods, increase product sales, fluctuations in demand can also negatively impact our product sales. As
attention to security threats fluctuates, the growth rates in sales of security products have been impacted,
particularly in our Consumer Products segment. If demand for our products declines, our revenues and gross
margin could be adversely affected.
We operate in a highly competitive environment, and our competitors may gain market share in the
markets for our products that could adversely affect our business and cause our revenues to decline.
We operate in intensely competitive markets that experience rapid technological developments, changes in
industry standards, changes in customer requirements, and frequent new product introductions and improvements.
If we are unable to anticipate or react to these competitive challenges or if existing or new competitors gain market
share in any of our markets, our competitive position could weaken and we could experience a drop in revenues that
could adversely affect our business and operating results. To compete successfully, we must maintain a successful
research and development effort to develop new products and services and enhance existing products and services,
effectively adapt to changes in the technology or product rights held by our competitors, appropriately respond to
competitive strategy, and effectively adapt to technological changes and changes in the ways that our information is
accessed, used, and stored within our enterprise and consumer markets. If we are unsuccessful in responding to our
competitors or to changing technological and customer demands, we could experience a negative effect on our
competitive position and our financial results.
Our traditional competitors include independent software vendors that offer software products that directly
compete with our product offerings. In addition to competing with these vendors directly for sales to end-users of
our products, we compete with them for the opportunity to have our products bundled with the product offerings of
our strategic partners such as computer hardware OEMs and ISPs. Our competitors could gain market share from us
if any of these strategic partners replace our products with the products of our competitors or if they more actively
promote our competitors’ products than our products. In addition, software vendors who have bundled our products
with theirs may choose to bundle their software with their own or other vendors’ software or may limit our access to
standard product interfaces and inhibit our ability to develop products for their platform.
We face growing competition from network equipment and computer hardware manufacturers and large
operating system providers. These firms are increasingly developing and incorporating into their products data
protection and storage and server management software that competes at some levels with our product offerings.
Our competitive position could be adversely affected to the extent that our customers perceive the functionality
incorporated into these products as replacing the need for our products. Microsoft has added remote access features
to its operating systems and has made announcements of actual and anticipated product features and new product
offerings that compete with a number of our product offerings. In addition, we believe that Microsoft has recently
made changes to its operating systems that make it more difficult for independent security vendors to provide
solutions for their customers. We could be adversely affected if customers, particularly consumers, perceive that
features incorporated into the Microsoft operating system reduce the need for our products or if they prefer to
purchase other Microsoft products that are bundled with its operating systems and compete with our products.
Another growing industry trend is the software-as-a-service (SaaS) business model, whereby software vendors
develop and host their applications for use by customers over the Internet. This allows enterprises to obtain the
benefits of commercially licensed, internally operated software without the associated complexity or high initial
set-up and operational costs. Advances in the SaaS business model could enable the growth of our competitors and
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