Symantec 2010 Annual Report Download - page 89

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
general economic conditions, competition, product obsolescence, technological change, shifts in buying patterns,
financial difficulties and budget constraints of our current 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 because of general economic conditions or for other reasons, our revenues and gross margin could be
adversely affected.
If we are unable to develop new and enhanced products and services that achieve widespread market
acceptance, or if we are unable to continually improve the performance, features, and reliability of our
existing products and services or adapt our business model to keep pace with industry trends, our business
and operating results could be adversely affected.
Our future success depends on our ability to respond to the rapidly changing needs of our customers by
developing or introducing new products, product upgrades, and services on a timely basis. We have in the past
incurred, and will continue to incur, significant research and development expenses as we strive to remain
competitive. New product development and introduction involves a significant commitment of time and resources
and is subject to a number of risks and challenges including:
• Managing the length of the development cycle for new products and product enhancements, which has
frequently been longer than we originally expected
• Adapting to emerging and evolving industry standards and to technological developments by our compet-
itors and customers
• Extending the operation of our products and services to new and evolving platforms, operating systems and
hardware products, such as netbooks
• Entering into new or unproven markets with which we have limited experience
• Managing new product and service strategies, including integrating our various security and storage
technologies, management solutions, customer service, and support into unified enterprise security and
storage solutions
• Incorporating acquired products and technologies
• Addressing trade compliance issues affecting our ability to ship new or acquired products
• Developing or expanding efficient sales channels
• Obtaining sufficient licenses to technology and technical access from operating system software vendors on
reasonable terms to enable the development and deployment of interoperable products, including source
code licenses for certain products with deep technical integration into operating systems
In addition, if we cannot adapt our business models to keep pace with industry trends, our revenue could be
negatively impacted. In connection with our enterprise software offerings, we license our applications on a variety
of bases, such as per server, per processor, or based on performance criteria such as per amount of data processed or
stored. If enterprises continue to migrate towards solutions, such as virtualization, which allow enterprises to run
multiple applications and operating systems on a single server and thereby reduce the number of servers they are
required to own and operate, we may experience lower license revenues unless we are able to successfully change
our enterprise licensing model or sell additional software to take into account the impact of these new solutions.
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.
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