Symantec 2008 Annual Report Download - page 96

and 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. If demand for our products declines, our
revenues and gross margin could be adversely affected. For example, if the challenging economic conditions in the
United States or other key markets continue or deteriorate further, we may experience slower or negative revenue
growth and our business and operating results might suffer.
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 revenue 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 strategies, 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.
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
could affect the success of our traditional software licensing models. We have recently released our own SaaS
offerings. However, it is uncertain whether our SaaS strategy will prove successful or whether we will be able to
successfully incorporate our SaaS offering into our current licensing models. Our inability to successfully develop
and market SaaS product offerings could cause us to lose business to competitors.
Many of our competitors have greater financial, technical, sales, marketing, or other resources than we do and
consequently may have the ability to influence customers to purchase their products instead of ours. We also face
competition from many smaller companies that specialize in particular segments of the markets in which we
compete.
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