Citrix 2014 Annual Report Download - page 25

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Our products could contain errors that could delay the release of new products or that may not be detected until after our
products are shipped.
Despite significant testing by us and by current and potential customers, our products, especially new products or releases
or acquired products, could contain errors. In some cases, these errors may not be discovered until after commercial shipments
have been made. Errors in our products could delay the development or release of new products and could adversely affect
market acceptance of our products. Additionally, our products depend on third-party products, which could contain defects and
could reduce the performance of our products or render them useless. Because our products are often used in mission-critical
applications, errors in our products or the products of third parties upon which our products rely could give rise to warranty or
other claims by our customers, which may have a material adverse effect on our business, financial condition and results of
operations.
We may experience outages, data loss and service disruptions of our Mobility Apps products and Delivery Networking
products, which could significantly and adversely affect our financial condition and operating results.
The increasing user traffic and complexity of our Mobility Apps products, specifically those using Voice over Internet
protocol and high-definition video conferencing features, and Delivery Networking products demands more computing power.
We have spent and expect to continue to spend substantial amounts of time and cost to adequately resource our Mobility Apps
products and Delivery Networking products and to maintain and upgrade our technology and network infrastructure to handle
the increased traffic of our collaboration and data products. Maintaining and expanding the capacity and geographic footprint of
our infrastructure is expensive and complex. Inefficiencies or operational failures, including temporary service outages and
temporary or permanent loss of customer data, could diminish the perceived quality and reliability of our services, and result in
liability claims by customers and other third parties, damage to our reputation and loss of current and potential customers, any
of which could materially and adversely affect our financial condition and results of operations.
Certain of the offerings from our Enterprise and Service Provider division have sales cycles which are long and/or
unpredictable which could cause significant variability and unpredictability in our revenue and operating results for any
particular period.
Generally, a substantial portion of our large and medium-sized customers implement our Workspace Services solutions
on a departmental or enterprise-wide basis. We have a long sales cycle for these departmental or enterprise-wide sales because:
• our sales force generally needs to explain and demonstrate the benefits of a large-scale deployment of our product
to potential and existing customers prior to sale;
• our service personnel typically spend a significant amount of time assisting potential customers in their testing and
evaluation of our products and services;
• our customers are typically large and medium size organizations that carefully research their technology needs and
the many potential projects prior to making capital expenditures for software infrastructure; and
• before making a purchase, our potential customers usually must get approvals from various levels of decision
makers within their organizations, and this process can be lengthy.
Our long sales cycle for these products makes it difficult to predict when these sales will occur, and we may not be able
to sustain these sales on a predictable basis. In addition, the long sales cycle for these products makes it difficult to predict the
quarter in which sales will occur. Delays in sales could cause significant variability in our revenue and operating results for any
particular period, and large projects with significant IT components may fail to meet our customers’ business requirements or
be canceled before delivery, which likewise could adversely affect our revenue and operating results for any particular period.
Similarly, our ByteMobile Smart Capacity solutions have a long and unpredictable sales cycle, and the timing of the
related revenue is difficult to predict. Because sales of our ByteMobile Smart Capacity solutions are focused on the
telecommunications market, we are subject to lengthy internal budgeting, approval and competitive evaluation processes that
such customers generally require.
Overall the timing of our revenue is difficult to predict. Our quarterly sales have historically reflected an uneven pattern
in which a disproportionate percentage of a quarter’s total sales occur in the last month, weeks and days of each quarter. In
addition, our business is subject to seasonal fluctuations and such fluctuations are generally most significant in our fourth fiscal
quarter, which we believe is due to the impact on revenue from the availability (or lack thereof) in our customers’ fiscal year
budgets and an increase in expenses resulting from amounts paid pursuant to our sales compensation plans as performance
milestones are often triggered in the fourth quarter. We believe that these seasonal factors are common within our industry. In