Symantec 2010 Annual Report Download - page 91

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If we fail to manage our sales and distribution channels effectively or if our partners choose not to
market and sell our products to their customers, our operating results could be adversely affected.
We sell our products to customers around the world through multi-tiered sales and distribution networks. Sales
through these different channels involve distinct risks, including the following:
Direct Sales. A significant portion of our revenues from enterprise products is derived from sales by our
direct sales force to end-users. Special risks associated with this sales channel include:
• Longer sales cycles associated with direct sales efforts
• Difficulty in hiring, retaining, and motivating our direct sales force
• Substantial amounts of training for sales representatives to become productive, including regular updates to
cover new and revised products
Indirect Sales Channels. A significant portion of our revenues is derived from sales through indirect
channels, including distributors that sell our products to end-users and other resellers. This channel involves a
number of risks, including:
• Our lack of control over the timing of delivery of our products to end-users
• Our resellers and distributors are not subject to minimum sales requirements or any obligation to market our
products to their customers
• Our reseller and distributor agreements are generally nonexclusive and may be terminated at any time
without cause
• Our resellers and distributors frequently market and distribute competing products and may, from time to
time, place greater emphasis on the sale of these products due to pricing, promotions, and other terms offered
by our competitors
• Recent consolidation of electronics retailers has increased their negotiating power with respect to hardware
and software providers
OEM Sales Channels. A significant portion of our revenues is derived from sales through our OEM partners
that incorporate our products into, or bundle our products with, their products. Our reliance on this sales channel
involves many risks, including:
• Our lack of control over the shipping dates or volume of systems shipped
• Our OEM partners are generally not subject to minimum sales requirements or any obligation to market our
products to their customers
• Our OEM partners may terminate or renegotiate their arrangements with us and new terms may be less
favorable due, among other things, to an increasingly competitive relationship with certain partners
• Sales through our OEM partners are subject to changes in general economic conditions, strategic direction,
competitive risks, and other issues that could result in a reduction of OEM sales
• The development work that we must generally undertake under our agreements with our OEM partners may
require us to invest significant resources and incur significant costs with little or no associated revenues
• The time and expense required for the sales and marketing organizations of our OEM partners to become
familiar with our products may make it more difficult to introduce those products to the market
• Our OEM partners may develop, market, and distribute their own products and market and distribute
products of our competitors, which could reduce our sales
• In many cases we must incur up-front costs to access the OEM channel, particularly in the consumer market,
and we may not recoup those up-front costs if customers do not ultimately activate and purchase our products
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