Symantec 2012 Annual Report Download - page 95

Risks related to the provision of our SaaS offerings could impair our ability to deliver our services and
could expose us to liability, damage our brand and reputation or otherwise negatively impact our business.
We currently serve our SaaS-based customers from hosting facilities located across the globe. Damage to, or
failure of, any significant element of these hosting facilities could result in interruptions in our service, which
could harm our customers and expose us to liability. Interruptions or failures in our service delivery could cause
customers to terminate their subscriptions with us, could adversely affect our renewal rates, and could harm our
ability to attract new customers. Our business would also be harmed if our customers believe that our SaaS
offerings are unreliable. As we continue to offer more of our software products in a SaaS-based delivery model,
all of these risks could be exacerbated.
Our SaaS offerings also involve the storage and transmission of large amounts of our customers’ proprietary
information, including sensitive and personally identifiable information. Breaches of our security measures or the
accidental loss, inadvertent disclosure or unapproved dissemination of proprietary information or sensitive or
confidential data about us or our customers, including the potential loss or disclosure of such information or data
as a result of fraud or other forms of deception, could expose us, our customers or the individuals affected to a
risk of loss or misuse of this information, result in litigation and potential liability for us, damage our brand and
reputation or otherwise negatively impact our business. Despite our precautions and significant ongoing
investments to protect against such breaches, our security measures could be breached at any time and could
result in unauthorized third parties obtaining access to our, or our customers’ data. Any actual or perceived
security vulnerabilities in our SaaS offerings could reduce sales, and constrain consumer and business customer
adoption of our SaaS offering. In addition, the cost and operational consequences of implementing further
security measures could be significant.
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 direct sales 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 in selling our products and
services, including regular updates to cover new and revised products, and associated delays and
difficulties in recognizing the expected benefits of investments in new products and updates.
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 generally 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
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